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You've got to give Hollywood credit: It's trying really hard to get hip to this newfangled Internet thing. After years of development, five of the seven major studios have unveiled Movielink.com, one of a few authorized video-on-demand sites and the one with the largest selection. Is it cool? Or, like slang-using parents, just trying to be?

Since legitimately downloadable movies are such a new idea, much of Movielink's coverage had to be devoted to how-it-works details. Let's get it over with: Downloaded files cost $1.99 to $4.99, expire 24 hours after viewing begins, can remain unwatched on a hard drive for 30 days, will only play on the computer that downloaded them, will be released to Movielink about six weeks after the films' DVD and video releases, and can be paused, fast forwarded, and rewound. Movielink employs various security technologies to protect it, not a bad idea because, as one observer put it, "every script kiddie in the world is likely to take a run at it."

Movielink's press generally ran from neutral to guardedly positive, but collect all the individual criticisms of the service and it's clear that there might be some issues. First, don't bother without broadband, and even then it might be faster to visit Blockbuster than to download 500 MB. You'll also need a Windows PC, and RealPlayer or Windows Media Player. Unless you feel like hooking your computer to your TV, you'll be enjoying "Ocean's Eleven" from your desk chair. There's no great savings over renting a flick or buying it on pay-per-view. Movielink says it's courting college students, but won't they keep pirating flicks from Kazaa the same week they debut in theaters? Finally, the service is only available in the U.S. Considering that Americans already have easy access to undubbed, region unencoded Hollywood movies, the rest of the world might be a much better target market than broke students.

Pundits agreed that there's not much of a business plan here, but maybe there isn't supposed to be. "Spokesmen for Movielink and several of its Hollywood sponsors said they view the first few years as a time for experimentation and discovery, not profit," wrote the L.A. Times' Jon Healey. Hollywood wants to prove it's more willing to cooperate with the 21st century than the music industry was, though it's fair to wonder whether it's too late. Legit files won't be mislabeled or virus-infected, said Movielink, but didn't the music industry use that argument to try and beat down unauthorized MP3s, too? "The site, and the tens of millions of dollars that have been spent on it, are pure PR," said Slate. Well, you can't fault Hollywood for trying to be cool. We just hope people don't lose their jobs if Movielink goes the way of laserdisc. - Jen Muehlbauer

Movie Studios Begin Renting Films on the Internet (AP)
http://tinyurl.com/2mdj

Online Movie Service Launches (L.A. Times)
http://tinyurl.com/2mdk

Major movie studios offer films online (San Francisco Chronicle)
http://tinyurl.com/2mdh

Studios aim to squash movie piracy (USA Today)
http://tinyurl.com/2mdi

Hollywood: Hooray for Broadband!
http://www.atnewyork.com/news/article.php/1498091

Movie Studios Provide Link for Internet Downloading
http://www.nytimes.com/2002/11/11/technology/11MOVI.html

Hollywood Studios Launches Paid Service for Online Movies
http://online.wsj.com/article/0,,SB1036963204998126188,00.html
(Paid subscription required.)

Movielink will be another Internet flop
http://slate.msn.com/?id=2073743

How do we make sense of this picture? Michael Capellas agreed to sell his company, Compaq, to HP and spent a year fighting to get the deal approved. Then he walks after six months (of an expected 18-month transition) and is said to be in line for the top job at WorldCom, a scandal-ridden, bankrupt company in a depressed industry in which he has no experience. HP's CEO will not replace him, but will have a bunch more operational executives reporting to her.

Nervous investors dropped HP's stock 11% on Monday, apparently seizing on the obvious explanation -- that Capellas's departure means that HP's path may not be strewn with rose petals. Early stories quoted Capellas and Fiorina doing their best to spin the story of a smooth transition running ahead of schedule, with power now appropriately concentrated in Fiorina, backed by a managerial "deep bench" (as the Wall Street Journal and CNET quoted her).

Analysts quoted in the press seemed skeptical but unwilling to slam HP too hard. The San Jose Mercury News ran opposing quotes from industry watchers: "Not replacing him (Capellas) and having everyone report to Carly strikes me as a negative" vs. "The integration is anchored in 500,000 hours of work, not one person's head." The harshest comment Unspun found was this, quoted in the Journal: "We liked those two (Capellas and Fiorina) where they were, so without him, we'd have to take another look at the company." Thanks for the insight.

The Merc and theStreet.com drilled in on the competitive challenges facing HP, particularly from Dell, which recently closed a printer deal with Lexmark aimed straight at HP. But theStreet.com's analysts expected HP's quarterly numbers, due out next week, to come in on target. The New York Times quoted a stock-watcher's succinct comment: "Ultimately, good numbers conquer all."

HP confirmed the news of Capellas's impending departure after the Journal ran a piece Monday claiming that the HP president was the top candidate to replace departing WorldCom CEO John W. Sidgmore. Today the Times' Seth Schiesel took a close look at Capellas' suitability for the top job at the company one analyst (quoted in the Merc) characterized as "the Vietnam of corporate governance."

The Merc's Scott Herhold took the old-fashioned route to understanding Capellas's possible motive for leaving HP: money. A number of outlets reported that Capellas is walking out with $14.4 million in hand. Herhold plumbed the last SEC filing Compaq made as an independent company and concluded: "Capellas wasn't getting a bonus for staying. He was getting a bonus for leaving." Herhold concluded, "Don't pay attention to what executives say in a merger -- pay attention to how they fashion their paychecks." - Keith Dawson

H-P President Capellas Resigns, Confirms WorldCom Candidacy
http://online.wsj.com/article/0,,SB1037026206675861028,00.html
(Paid subscription required)

HP: Sailing without a second in command
http://news.com.com/2100-1001-965343.html

Capellas' HP exit raises concerns
http://www.bayarea.com/mld/mercurynews/business/4499773.htm

Capellas' Departure Just Another Brick in H-P's Wall
http://www.thestreet.com/_tsclsii/tech/kcswanson/10053638.html

Top Hewlett Executive Resigns, Raising Doubts on Compaq
http://www.nytimes.com/2002/11/11/business/11CND-COMP.html

H-P's Capellas Leads List To Be CEO of WorldCom
http://online.wsj.com/article/0,,SB1036983737783218268,00.html
(Paid subscription required)

A WorldCom Candidate, but No Telecom Resume
http://www.nytimes.com/2002/11/12/technology/12TELE.html

The fine print forecast Capellas' departure
http://www.bayarea.com/mld/mercurynews/business/4499786.htm

H-P's Capellas to Leave, Stock Drops (Reuters)
http://www.siliconvalley.com/mld/siliconvalley/4494035.htm

Michael Capellas' Next Move
http://www.forbes.com/2002/11/11/cx_ld_1111hp.html

Iraq Fears Weigh on Wall Street
http://www.washingtonpost.com/wp-dyn/articles/A33759-2000Jun21.html

IM Users: Your Boss Is Watching
http://www.wired.com/news/business/0,1367,56290,00.html

3 to turn themselves in amid $3M cyber-scam probe
http://nydailynews.com/front/story/34538p-32663c.html

Copyedited by Jim Duffy (jimduffy86@yahoo.com).

Editor and publisher: Jimmy Guterman (guterman@vineyard.com).

Media Unspun is produced by The Vineyard Group Inc.
Copyright 2002 Media Unspun, Inc., and The Vineyard Group, Inc.
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