Sightsound Aims To Establish System For Downloading Films

WASHINGTON, D.C.-Touting the company as "HBO meets Blockbuster on the Internet," Scott Sander, president of Sightsound.com, weaves a compelling case for the distribution of movies over the Internet.
At a time when download business models don't even exist, Sightsound is willing to wait. The company, Sander says, has no interest in selling hard-copy VHS or DVD titles.
"We don't want to go back to the future," he tells Billboard. "When you go to our site for a movie and you want to buy it, you're going to end up at a retailer. You should have the ability to buy a VHS or DVD from one kind of retailer or download it through Sightsound."
The Mount Lebanon, Pa.-based company initially set its sights on music and in 1995 sold its first complete album as well as singles at a time when most record companies were just beginning to realize the Internet existed. After a frosty reception from the major labels, and given the rapid progression of technology, Sightsound turned its attention to the motion picture industry, with a patented proprietary system to securely deliver full-length movies to paying customers.
"We do not view other Internet companies as our competition. We view piracy as our competition," Sander says. "The Internet wants the content, and the medium will take the movies if they are not offered for sale. We've learned that clearly with music."
Sander and his partner Arthur Hair say they've learned some other lessons from the music industry. "Labels today are using the Internet primarily for promotion because they squandered the opportunity to use it for download sales," he says. "Now everyone just steals music. They've damaged the opportunity to sell so severely by allowing a sense that music is free on the Net."
Now Sander and Hair are banking on the assumption that the film industry will not make the same mistake. "There's a big, big difference between music and movies," Sander says. "For starters, the average cost of producing a movie last year was $52.7 million, and the physical cost of producing a CD for a band might be as low as a couple grand. If someone steals a $50 million asset, it's a whole different story."
Filmmakers got a jolt of Internet reality this summer when a handful of the season's biggest hits made their way around the Net courtesy of illegal distribution. "We saw "Cruel Intentions,' "Blair Witch,' "American Pie,' "Phantom Menace' all showing up on the Internet as pirated files. That was the wake-up call," Sander says.
The major film studios, however, don't share Sander's sense of urgency. Currently all of the 80 titles Sightsound offers-ranging from sports programming to classic films to other niche product-come from independent producers. Currently Sightsound offers 80 titles that customers can rent for one or five days at $2.95-$3.49 or purchase for prices ranging from $4.95-$19.95.
Last spring, heavy-hitting indie Artisan Entertainment agreed to let Sightsound sell its film "Pi" using a pay-per-view model at the same time the film was available for pay-per-view on cable. Artisan also invested an undisclosed amount of capital in Sightsound.
While Sightsound patiently waits for Hollywood to give its technology the thumbs up, it is busy perfecting a scalable system that will be able to handle the content when the floodgates open and the studios loosen their grip on digital delivery.