Apple, Hollywood Studios Agree to Movie Viewing via iCloud on iPad, Macs, iPhones, Other i-devices

Technology is just like the weather; the news is sunny in some places and cloudy in others.

Apple's announcement of a deal with movie studios suggests that a new front has opened in the war for content - and consumer attention. That Apple felt compelled to announce the deal before all the details had been worked out and before it had signed all the major studios underscores how hard-fought this battle will be.

The stakes are enormous because experience has shown that most consumers have neither the patience nor the budgets to frequently shift formats or platforms. So whoever strikes first may capture the ensuing revenues for a long time.

Microsoft, Google, Amazon, Netflix and, arguably the phone and cable companies will all be hurt in various ways if the deal holds. Those that have not done so already will hasten the launch of their own services. Tactics will vary, but the strategic battle is to capture as many opportunities as possible to share content over varied but allied series of platforms. And in that contest, Apple appears to have the big guns. JL

Jessica Vascellaro, Erica Orden and Sam Schechner report in the Wall Street Journal:

Apple Inc. and Hollywood are proving how complicated it is to build alliances in the digital-media business.

Last week Apple said five major movie studios had agreed to allow consumers to buy their films on one Apple device, such as an iPad, and watch them on another, such as a Mac. But clinching those deals required both sides to work through hurdles that included at least one licensing arrangement one of the studios already had in place
Apple is offering the option of viewing movies on a range of its devices as part of its online iCloud service, under agreements with Lions Gate Entertainment Corp., Sony Corp.'s Sony Pictures, Walt Disney Co., Viacom Inc.'s Paramount Pictures and Time Warner Inc.'s Warner Bros. The company has yet to reach similar accords with two other big studios.

ICloud allows users to sync media, such as TV shows and photos, across Apple devices.

Apple is offering film viewers a wider range of options to address their complaints about restrictions on how they can watch iTunes movies and to encourage people to buy multiple Apple devices compatible with iCloud.

The move could provide a boost for the new iPad, which has a higher-resolution screen that Apple hopes will be popular for watching video.

Apple executive Eddy Cue showed off the range of options at Wednesday's launch event for the device, at which Apple also announced a new version of its Apple TV set-top box. He said they would allow users to watch movies they had bought "at any time with no additional cost."

While record labels and television studios agreed to participate in iCloud when Apple launched it late last year, movie studios, weren't part of the picture until now. Apple had wanted to get all the major studios on board before launching its movie service but decided to proceed with the deals it had, said a person familiar with the matter.

Meanwhile, the studios have been promoting UltraViolet, a rival service that lets consumers watch purchased digital movies across a range of devices.

One major roadblock for Apple has been Time Warner's pay-TV channel HBO. Comcast Corp.'s Universal Pictures and News Corp .'s Twentieth Century Fox license their movies to the channel, in deals that bar them from letting their movies work with iCloud.

The deals specify that HBO has exclusive rights to beam movies to consumers during certain "windows" after each film comes out. The first such window usually comes about six months after a movie is released on DVD, and lasts about a year. During that interval, movies generally disappear from competing online stores and video-on-demand menus.

Those terms prevented Universal and Fox from participating in iCloud, because if a user who had previously purchased a movie at Apple's iTunes store sought to watch it on another device during HBO's exclusive window, sending the movie to that device would potentially violate HBO's exclusive rights.

HBO isn't planning to give up its exclusive windows, for which it pays hundreds of millions of dollars a year, and which allow it to beam movies to its online service HBO Go as well as to its traditional TV channels. But HBO is relaxing terms to let users of iCloud and other services send movies they already own to other devices during those windows, an HBO spokesman said.

HBO agreed to loosen its arrangement with Warner Bros., which is working with iCloud, and also is in talks with Universal and Fox to do the same, the spokesman added.

Fox expects to resolve the issue as soon as within weeks, said a person familiar with the situation. Another person familiar with the matter said Universal is near a resolution. (The Wall Street Journal, like Fox, is owned by News Corp.)

The issue highlights how behind-the-scenes conflicts between the digital and traditional media worlds affect consumers, often without their knowledge. For years, online retailers have offered some newer movies for sale or rental, only to have those offers disappear again within a few months.

For instance, the Universal film "Bridesmaids," which came out in 2011, was for a time available for sale through iTunes. But it is now in its HBO window and is no longer for sale through the U.S. iTunes store.

New technologies, like iCloud, are making these conflicts more obvious, pressuring traditional media businesses to rewrite their agreements. Movie studios want consumers to buy more digital-movie downloads as DVD sales shrink and digital rental and subscription services, from which studios earn less, gain traction.

With iTunes commanding the majority of the digital-movie download market, the studios have made a bid to control their own fates by developing a competing cloud service called UltraViolet. Launched in recent months, the service allows consumers to watch online or mobile versions of the movies they buy on DVD or Blu-ray.

Movie studios have tried to get Apple to participate in the UltraViolet effort, according to people familiar with the matter, but so far haven't succeeded.

The maneuvering adds to the tensions between media companies and Apple, which has continually tried to push new business models that media companies worry will reduce their earning power.

In recent months, for example, Apple has floated the idea to at least one media company that it grant Apple a license to its live and on-demand TV channels in exchange solely for a cut of ad revenue, something one media executive described as a "non-starter."

Broader battles loom as Apple, along with technology rivals including Microsoft Corp. and Google Inc., develop new software or devices that provide alternatives to traditional television service, a lucrative business for media companies