For those who haven’t seen it, the Wizarding World of Harry Potter is quite the tribute to J.K. Rowling’s mega-popular series of books and movies. While the village of Hogsmeade is nice, the centerpiece attraction is the Hogwarts castle itself. While waiting for the main ride, muggles wind their way through various corridors and are treated to brief cameos from the actors in the Potter movies.

Other nice touches include artifacts from the books and the pictures of the various headmasters and prominent past teachers whose moving portraits talk and argue with one another. I also enjoyed the Daily Prophet, complete with its own embedded movie. (Mobilized is always a sucker for a newspaper.)

Mobilized felt it was her duty to ride each of the rides several times, as well as indulge in a bit of butterbeer and some sweets from Honeydukes. I did manage to show a little restraint and stopped short of buying a wand. (That may also have had something to do with the fact that the line to get into Olivander’s stretched for more than an hour)

But, while Harry Potter-land was probably the highlight of the visit, some of the coolest technology was in other parts of Islands of Adventure and the neighboring Universal Studios Orlando.

Particularly noteworthy was the use of fingerprinting as a means of authentication. Multi-day pass users had to place their finger on a scanner and use that to show that it was the same person attempting to enter the park each day.

And that wasn’t the only way in which Universal made use of biometrics. The lockers near the Harry Potter rides and elsewhere at the park used fingerprints to lock and unlock lockers.

Creepy or convenient? A little bit of both, I’d say.

The other nifty bit of technology was tied to a roller coaster at Universal Studios, the park next to Islands of Adventure. The Rock-It ride offers riders their choice of soundtrack as they scream and yell through drops, twists and turns. Mobilized went with Evanescence.

Even more intriguing (and probably profitable for Universal) was the option at the end of the ride not just to purchase a still photo, but also a DVD featuring a music video that incorporated live video of the ride, 3-D renderings and the selected song as the soundtrack.

Fork over $40 or so and you get a picture and the video, which is able to isolate a particular rider. The video also does a great job of using computer images and generic footage to augment the relatively few seconds of video it has of each rider.

Netflix (NFLX) wouldn’t release details about the pact, and hasn’t put out a press release announcing it, as it had with earlier deals with Time Warner’s (TWX) Warner Bros, GE’s (GE) Universal and News Corp.’s (NWS) 20th Century Fox.

But spokesman Steve Swasey confirmed that Netflix and Sony have reached another “28-day” arrangement, similar to the ones Netflix has reached with the other three studios.

Swasey wouldn’t release other details, but we can guess that the deal follows the pattern established with the precedent Netflix set in its January deal with Warner: Netflix agrees not to rent Sony’s (SNE) movies for the first 28 days after they go on sale. In return, it will pay the studio a reduced fee when it does rent the discs, and will get more movies to offer via its growing Web streaming service.

This seems like a win-win for the both sides: The studios get to wring every last penny out of their DVD business, and Netflix gets to build up the business it really cares about–delivering movies to your home via the Web.

But analyst Rich Greenfield, who wrote about the Sony deal in a note published Tuesday (registration required), says these deals have only been good for Netflix: Its costs have gone down, and its subscriber base has increased, but the studios have continued to see their DVD sales slip. “Clear victory for Netflix,” he writes.

His logic:

“* The studios have essentially played right into Netflix Founder and CEO Reed Hasting’s plan to reduce DVD costs to fund his company’s aggressive digital media rights acquisition plan.
* Netflix is rapidly bringing down its physical [cost of goods sold] by reaching delayed release window deals with studios and using fresher digital content to shift consumer behavior to streaming, reducing the number of DVDs utilized per customer per month (lowering its mailing costs).
* We suspect the Netflix window needed to be substantially longer than 28 days to justify the price reduction the studios have given Netflix – meaning a six month window might have impacted Netflix subscriber trends, whereas 28 days simply has not. Unfortunately studios were more focused on bolstering sell-through, which is largely complete within the first month of a DVD’s release, rather than damaging the long-term prospects of Netflix.
* Netflix continues to aggressively purchase digital movie rights having recently acquired rights to Relativity Media content and EPIX content, with Starz content increasingly important for Netflix to renew (at far higher costs) when their current agreement ends in 12 months.

Redbox, the Coinstar (CSTR) unit which operates more than 15,000 DVD rental kiosks around the country, today announced that it has filed suit against 20th Century Fox over new proposed distribution terms which would prevent Redbox from renting the studio’s DVDs to consumers until at least 30 days after they are released to the public.

As I noted in my May 18 column in Barron’s, Redbox has a similar suit pending against Universal Studios. The issue: Redbox rents movies for $1 a day. The price is so low that the studios fear that consumer will be incented to stop buying DVDs, thus wrecking a lucrative component of studio revenues.

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Yesterday, Time Warner (TWX) CEO Jeffrey Bewkes said that Warner Bros. plans to experiment with VOD releases day-and-date with DVD later this year. And now this morning, Apple (AAPL) announced that a number of major and independent movie studios have agreed to make their films available on iTunes day-and-date with DVD–$9.99 for library title purchases and $14.99 for new release purchases. Among the studios participating in the deal: 20th Century Fox (NWS), Walt Disney Studios (DIS), Warner Bros., Paramount Pictures (VIA), Universal Studios Home Entertainment (GE), Sony Pictures Entertainment (SNE), Lionsgate (LGF), Image Entertainment (DISK) and First Look Studios (FRST.PK).

An impressive lineup and one that clearly heralds a shift in the movie industry’s view of digital distribution. A shift in iTunes movie purchases as well–upward. The removal of Hollywood’s typical 30-day lead time on DVD releases will no doubt boost new-release sales on iTunes, assuming customers don’t mind paying $14.99 for films that lack the extra features and picture quality of their DVD counterparts. It will boost movie studio revenues as well. With no manufacturing and reproduction costs to speak of, margins from day-and-date download releases are presumably quite high.

So much for that hard-fought DVD format war …

And not for much longer, says Ted Sarandos, Netflix’s chief content officer. “The prolonged period of competition between two formats has prevented clear communication to the consumer regarding the richness of the high-def experience versus standard definition,” Sarandos said. “We’re now at the point where the industry can pursue the migration to a single format, bring clarity to the consumer and accelerate the adoption of high-def.”

And not for much longer, says Ted Sarandos, Netflix’s chief content officer. “The prolonged period of competition between two formats has prevented clear communication to the consumer regarding the richness of the high-def experience versus standard definition,” Sarandos said. “We’re now at the point where the industry can pursue the migration to a single format, bring clarity to the consumer and accelerate the adoption of high-def.”

Though Paramount Pictures has denied reports that it plans to abandon the next-generation DVD format, news of an escape clause in its HD DVD contract allowing it to release films on Blu-ray has the industry wondering aloud about the format’s continued viability.

And for good reason. Earlier this week Universal’s HD DVD-exclusive contract ended. And last Friday, on the eve of the Consumer Electronics Show, Warner Bros. stunned the industry by announcing plans to end support of the format entirely in June. “[That] maybe the pivotal event that resolves the format war,” said Thomas Coughlin of Coughlin Associates. “It certainly changes the rules and the playing field. I think everyone is trying to reassess what this means–including the HD DVD guys. [If Blu-ray does come out on top] it would be poetic justice after the Betamax vs. VHS war. That time, Sony lost.”

But is it truly the format’s death knell? Ovum analyst Carl Gressum says no. “There is a lot of speculation whether this is the end of HD DVD,” he said. “It is not, but we are getting dangerously close to a ‘chapter 11’ for the group. If the other supporting studios now decide to drop HD DVD, the situation will turn dire, and HD DVD could become more of a replacement to DVD on the PC client than as a movie-distribution playback format.”

UPDATE: Universal Pictures flatly denies it’s abandoning the HD DVD format. Said Ken Graffeo, executive vice president of HD strategic marketing for Universal Studios Home Entertainment, “Contrary to unsubstantiated rumors from unnamed sources, Universal’s current plan is to continue to support the HD DVD format.”

From top to bottom, Blockbuster is deliberately and willfully infringing on our patented methods. Netflix invented a 100 percent better mousetrap that Blockbuster copied.
- Netflix spokesperson Steve Swasey, April 5, 2006

Apparently, Blockbuster isn’t as hopelessly tethered to its VHS rental-business past as you might think. Yesterday, the video-rental retailer acquired studio-owned movie download service Movielink and with it a potentially significant foothold in the video-on-demand market. Terms of the deal were not disclosed, but early this year when rumors of an acquisition first began to circulate, analysts had estimated that Blockbuster might pay as much as $50 million.

Founded in 2002, Movielink is backed by Paramount Pictures, Sony Pictures, Metro-Goldwyn-Mayer, Universal Studios and Warner Bros. Studios. But while its impressive catalog makes it one of the Web’s largest digital-movie libraries, the service hasn’t caught on because of its strict digital-rights management software and prices (roughly the same as a typical DVD). Still, it’s likely a good acquisition for Blockbuster, whose market value has declined to just over $800 million from $8.4 billion, largely because of its failure to buy Netflix when it had the chance.

Blockbuster chair and CEO Jim Keyes called the deal the next “logical” step in the company’s transformation. Presumably, that means the next phase in Blockbuster’s re-creation of the Netflix business model, which the video-rental chain has been diligently following for the past few years. Netflix, of course, is spending some $40 million this year on its own VOD service, which is already up and running.