Here is a quick episode recap…On the last installment I was lamenting the fact that my carefully catalogued film library was facing the same fate as those cassette tapes that are stashed away in a dusty box at the back of my garage. The DVD was being made obsolete by new technology that allowed for denser data storage on a disk of the same size. Blu-Ray and HD-DVD developed by Sony and Toshiba respectively were locked in a fight to the death over standards in which the loser would perish or at best be marginalized like Beta whose superior technology could not compete with the popularity of VHS. I was sitting on the fence out of stubborn loyalty to my 'antique' DVD collection and because I was waiting to see which of the two combatants would emerge victorious. But that was only half the story, literally because those new high definition disks are not the only formats battling for a share of the home movie market. Lightening fast bandwidth and the need for instant gratification with the least amount of physical exertion has spawned a new contender, downloadable movies.

While there has been talk of movies via the net ever since we evolved from the dark ages of dialup, there were always several hurdles to surmount. One factor was that despite all the time we spend staring at our computer monitors we still have an innate aversion to watching movies on our computers. For one thing unless it is a laptop you are stuck in an uncomfortable chair hunched over your keyboard and even if you can move it around an LED laptop screen is a poor substitute for the color and image depth that is standard on any TV worth its salt. Then there was the problem of getting Hollywood on board with online distribution because DVD sales gave them 80 cents on every dollar and they were not about to jeopardize this lucrative revenue stream. Also although studios flirted with the idea, they remained wary of letting out their valuable content without sufficient measures being made to safeguard it from piracy which had become rampant. Some services that offered short clips like YouTube played a game of cat and mouse with the studios and networks by officially condemning copyright infringement but largely turning a blind eye to user violations, leading to producers like Viacom bringing legal action against them. The result in a nutshell, everyone is suspicious of everyone; it is not a pretty picture it does nothing to solve the problem of making downloadable movies a reality.

In 2004 Santa Clara based Vudu Inc. got to work. A little over two years and 42 patent applications later it emerged with its answer. The Holy Grail is a hard cover sized 7x2x2 inch black set top box wired to your Ethernet connection that enables you to download movies directly onto your TV sans the computer or the cable box as middle man. The movies are encoded in MPEG-4 (H.264) which is then up scaled to pseudo-hi def (1080i or 1080p) meaning you get almost DVD quality and Vudu is currently in talks with studios to offer movies in true high definition. Meanwhile they have managed to pen deals with 7 of the majors; Disney, Twentieth Century Fox, Warner, Paramount, Lionsgate, New Line and Universal in addition to 15 independents and internationals giving them a library of 5 000 movies to work with. That is quite the accomplishment considering that getting these suits to agree on any one thing is usually next to impossible. The tight security and DRM protection built into the box was definitely a selling point and the fact that movies never actually go through a computer keeps the system relatively hacker free. As of today only Sony Pictures remains unconvinced.

I'll say one thing; those Vudu guys are definitely not short on either talent or experience. Co- founder and Chairman Alain Rossman, a graduate of the École Polytechnique, had a hand in developing Apple's Macintosh back in the 80's and later went on to found several tech startups including OpenWave Systems which established the WAP browsing standard for cell phones. Other members of the Vudu clan trace their pedigree to such groundbreaking companies like TiVo, WebTV and OpenTV. So it is no surprise that they devised a pretty ingenious answer for the problem of how to get a movie into that little black box as quickly as possible and deal with future bandwidth demands as the user base grows. Their solution is basically a silent peer-to-peer service. Your Vudu box fetches chunks of a movie from other boxes that are online and have already downloaded it, in essence passing the movies back and forth without the user being actively involved. This saves the company from having to spend money buying its own servers and bandwidth. Purchased movies start immediately because the first 30 seconds of every movie available on the service is already stored on the 250 gigabyte hard drive and when the company believes a certain title will popular it seeds the box with longer slices of the movie.

The service is demanding in that it requires a high bandwidth speed of at least two megabits per second for instant downloads but you can only download one movie at a time which takes 40-50 minutes, about the same time it would take me to hop into the car and go to and from the nearest blockbuster. Movies that you purchase never expire, but rentals must be watched within 30 days and expire 24 hours after you hit play. The box itself costs $399 which is a tad steep considering that this is in addition to the price of the movies, which can either be rented for $2 to $4 or purchased outright for $15 to $20. Vudu's selection of 5 000 movies may be higher than Time Warner's 'On Demand' but still it can't hold a candle to the 85 000 titles available from movies-by-mail leader, Netflix. The company says it is planning to increase its selection to 10 000 but despite its much publicized Hollywood wheeling and dealing it seems to have an awful lot of low budget B movies in its selection that serve as filler. It gets thumbs up for its video and audio quality, slick onscreen interface, intuitive remote and kudos for being easy to setup but it looses points for its lack of built-in Wi-Fi and the stingy 24 hour time limit on rentals that won't win it any fans.

Though it may sound like everyone will be rushing out to get one of these, Vudu does have a number of roadblocks on its way to success. For one thing it is not the only option and faces competition from companies like Microsoft whose Xbox 360 lets users download movies and TV shows or TiVo HD which enables you to order movies from Amazon Unbox. There are whispers that Netflix is contemplating its own entry into the arena and of course we can't forget Apple TV. When Apple decided to get into Hollywood, its iTunes service was already a success having ridden the tsunami of the iPod to claim about two thirds of the US market for authorized song downloads. It introduced downloadable TV shows in October 2005 starting with offerings from Disney's ABC and in September 2007 unveiled full length movie downloads with 75 titles from Disney owned studios. The sale of Pixar had made Steve Jobs the biggest Disney shareholder and given him obvious leverage. Apple introduced the $299 AppleTV as a one stop media center for photos, music, videos, and of course TV shows and movies from iTunes which previously could only be viewed on your computer or iPod. Though iTunes currently offers a meager selection of only 500 movies from Paramount, Disney and MGM, it is still the most successful movie downloading effort on the market to date. Movies are first purchased and downloaded via iTunes then streamed wirelessly to the AppleTV. It is a lengthy, messy operation and though their 'near-DVD' video is good it does not compare to Vudu's HD. Currently movies are available from iTunes for purchase only ($14.99 for newest titles) but the ether is humming with talk of a rental service being launched soon.

A more physical challenge that Vudu needs to overcome is that when you already have to contend with a cable box, a PlayStation and a DVD player stacked next to your TV, having yet another gadget, even a slick looking black box, makes for a pretty crowded shelf. The Vudu remote uses radio frequency not infrared so this means you could theoretically stash the box away in some drawer out of sight but since it needs to be connected to both your Ethernet outlet and the TV, your options are limited. Another problem with all online-movie formats is that titles occasionally disappear from the rental selection when they are contractually licensed to premium cable services such as Showtime or HBO. So as a result while some movies are listed as available for both rental and purchase others only have a purchase option. This is due to 'distribution windows' the hierarchy of channels through which a movie goes which dictates when and where you see it. It starts on the big screen and moves to airlines and hotels, then DVD, trickling down to pay-per-view, premium cable and lastly regular TV. Services like Vudu fall somewhere among the last three. Though the boxes' 250GB hard drive is capable of storing more than 100 hours of purchased movies it is still just a fraction of my traditional DVD collection. And if like me you love all that behind the scenes stuff and are partial to movies of the 2 disk variety that are packed to the gills with special features, caveat emptor, Vudu is sorely lacking in this department. There are no deleted scenes, commentary, subtitle options or any of that good stuff.

But the biggest challenge will be consumers themselves. So far there is some resistance to the idea of paying to download movies online especially if there is no considerable savings involved, despite the obvious convenience, increased selection and almost instant gratification. Last year, consumers spent only $120.9 million downloading major studio content, mainly from TV shows and this year that total is expected to reach $281.6 million, growing but nowhere near the $16.4 billion pulled in by DVDs last year. Vudu is forging ahead bravely ignoring the corpses of companies that tried and failed to get users to adopt downloaded video as a home movie option. Their optimism seems to be shared by the money men responsible for finding and nurturing the 'next big thing'. Vudu Inc. has managed to wrangle $21 million in venture capital from Greylock Partners and Benchmark Capital so I guess they must be on to something. It may take some getting used to because it is not tactile like having a physical disk but I managed to give up CDs for digital downloads and mp3 players so this shouldn't be too painful provided they get more of a selection for me to play with. Yes I can't lend out the download I purchased to my neighbor as I do with my DVDs however this also means that I never have to worry about who took what or how to ask them to return the movie either.