All Things Digital

Since John Paczkowski is still out of range, Beth Callaghan will post Digital Daily today.

Reuters/Hollywood Reporter reports that Microsoft execs have been talking to talent agencies all over Hollywood with the intention of building an exclusive body of original content for the company’s Zune player. Not just standard sitcom fare, either–Zune’s recent update of firmware for the device provides better social functionality, and Microsoft (MSFT) sees this as a move toward the kind of communal functionality pioneered by the XBox multiplayer experience.

Richard Winn, director of entertainment development for Zune, says, “What we would be looking to do with any form of original content is the added component that Zune could provide that iTunes or any competing service couldn’t.”

Great, but will that make a difference, with the Zune market share hovering at 4 percent (compared to Apple at 71 percent)? Probably not. This is the same programming/marketing team, after all, that came up with the idea of launching a Joy Division version of the Zune. Really–Zune users are already lonely; no need to make them sad.

Well, it’s also the team that does the impossible–defying all rumors of extinction and plugging away on a platform no one uses. Maybe while the Zune team is making the rounds, they’ll find out who represents U2.

John Locke (played by Terry O’Quinn) and his Apple II in ABC’s “Lost”

“Because they’re the super-small-market share guy, they get all these statements about them.” Microsoft (MSFT) Chairman Bill Gates said that about Apple back in 2005. And while it’s essentially still true, it’s less so than it has been in years past. In separate reports today, research houses Gartner (IT) and IDC (IDC) both note that Apple has climbed to third place in the desktop market in the U.S. Gartner figures Apple’s share of state-side PC shipments for the second quarter of 2008 to be 8.5 percent, up from 6.4 percent in the quarter a year earlier. IDC pegs it at 7.8 percent for the second quarter this year, up from 6.2 percent in last year’s second quarter. And that puts the company in third place in the domestic PC market–ahead of Acer, if you believe Gartner. And in fourth place behind Acer if you believe IDC.

Not that it matters all that much. Because regardless of whose metrics you prefer, Apple (AAPL) still lags far behind the two PC sales leaders. Dell (DELL) is still the No. 1 seller of PCs in the U.S., with 32 percent of the market according to IDC. HP is No. 2, with 25 percent. And in terms of worldwide sales, Apple hasn’t even cracked the Top 5. Yet.

It’s definitely No. 1 in Hollywood though, as critic Roger Ebert noted a few years back. “Macs turn up in the movies all the time–not so much because of product placement, but because so many movie people use them and like them,” Ebert wrote. “A historian of the future, counting all the on-screen computers between 1983 and today, would likely conclude that Macs represented 90 percent of the computer market.”

Lest there be any doubt that DVR functionality was purposefully left out of Apple TV, consider this patent recently unearthed by AppleInsider. Filed in October of 2006, the patent describes not just a version of Apple TV capable of browsing and recording live TV programming, but a touch-based remote that could be preloaded with upcoming TV listings to facilitate it. From the patent:

For example, program data for upcoming programs, e.g., for the next month, can be downloaded and stored on the remote control device. Thereafter, a user of the remote control device can search programs that are to be broadcast and determine which programs to record. The recording settings can be programmed onto the remote control device, and then be provided to the video device when a data communication is established between the remote control device and the video device.”

Pretty slick, eh? Lots of additional possibilities here as well. One could easily imagine the iPod Touch and iPhone serving as the remote the patent describes. And if this next-generation Apple TV is capable of recording TV programming, why not make it the gateway through which such programming is delivered? How nice would it be to subscribe to HBO–and HBO alone–via iTunes? How nice would it be to subscribe to a season of “Weeds”? Or to a commercial-free season of “The Office” and skip everything else NBC has to offer? How nice would it be if the latest unwatched episode of “Weeds” on your Apple TV was automatically synced to your iPhone for later viewing? How nice would it be if new films opened on iTunes the same day they opened in theaters?

Pipe dream? Perhaps. Certainly, these scenarios would require Apple (AAPL) to ink some fantastical new licensing deals with Hollywood. And the two aren’t exactly seeing eye-to-eye all the time these days. Still, you never know. Stranger things have happened.

With the Apple TV Take Two, we think we have it right this time. I think we have a great product.”

–Apple Chief Operating Officer Tim Cook, Jan. 23

Promises, promises, promises … When Apple (AAPL) debuted iTunes Movie Rentals this past January, the company pledged to offer “over 1,000 titles by the end of February, including over 100 titles in stunning high-definition video with 5.1 Dolby Digital surround sound.” Well, today’s March 4 and, as best I can tell, Apple hasn’t kept its promise. Browse iTunes this morning with the software’s “Power Search,” and you’ll find just 411 films for rent–91 of them available in high definition. That’s 589 short of the promised 1,000–a discrepancy of nearly 60%.

Seems Apple may not have Apple TV quite right yet after all–the Hollywood licensing part of it, anyway.

UPDATE: At the Apple shareholder meeting yesterday, CEO Steve Jobs confirmed the discrepancy, saying the company’s goal of 1,000 rental titles on iTunes was short by around 600.

Odd to think that a 64-minute foray into excrement and emesis might be a defining moment in Hollywood’s transition to digital distribution. But it could.

Paramount Pictures plans to debut “Jackass 2.5,” the third installment of the “Jackass” movies, online, skipping the multiplexes entirely. “2.5” will launch Dec. 19 on Blockbuster’s new online property, Movielink, where it will be streamed free for two weeks. Then, beginning Dec. 26, it will be released on DVD, through video-on-demand and in Apple’s iTunes Store. An interesting experiment, and one that could pave the way for first-run broadband movies.

But will it succeed? Paramount certainly seems to think so. After all, the film is sort of a long-form version of the rough-edged, occasionally tasteless DIY content that predominates online. Said Tom Lesinski, president of Paramount Pictures Digital Entertainment, “When you think about what people generally consume online it’s fairly low-end user-generated content, yet there are hundreds of millions of people online watching video every day.”

Or as another executive candidly told the New York Times: “There’s more vomiting, nudity and defecation. The stuff that consumers really want.”

Mediated contract negotiations between the Writers Guild of America and Hollywood producers broke off last night setting the stage for a writers’ strike that could leave sitcoms without scripts, late-night shows without topical monologues and television viewers with an even more limited choice of broadcast dross than they have now (”America’s Next Top Model,” “Dancing With the Stars” and “Farmer Wants a Wife” on the CW! How will I ever decide?)

Seems writers and producers still can’t agree on pay schedules for content distributed on the Internet and via other digital media. Or rather, the Alliance of Motion Picture & Television Producers is a bit too attached to the lousy DVD deal it convinced the writers to agree to 20 years ago, which gives writers, directors and actors a combined 20 cents for each DVD sale–30 cents less than the sum given to manufacturers of DVD packaging material.

“The companies refused to continue to bargain unless we agree that the hated DVD formula be extended to Internet downloads,” the guild said in a statement. “[W]e presented the AMPTP with a comprehensive package of proposals that included movement on DVDs, new media, and jurisdictional issues. We also took nine proposals off the table. The companies returned six hours later and said they would not respond to our package until we capitulated to their Internet demand. After three and a half months of bargaining, the AMPTP still has not responded to a single one of our important proposals.”

Too bad for the writers then. Because AMPTP president Nick Counter says increasing the DVD formula (a huge money-maker for the studios) is a nonstarter. “We want to make a deal,” he told WGA negotiators. “We think doing so is in your best interests, in your members’ best interests, in the best interests of our companies and in the best interests of the industry. But, as I said, no further movement is possible to close the gap between us so long as your DVD proposal remains on the table.”

Way to extend that desiccated olive branch, Nick. As John Scott Lewinski notes over at Wired, the producers offering to settle if the Guild drops all that is like the Galactic Empire telling Luke Skywalker, “OK, we’ll surrender … but only if we get to keep the Death Star.”