Microsoft is building its Xbox Live online gaming and entertainment service into its upcoming Windows 8 operating system.

Mike Delman, vice president of global marketing for Microsoft's interactive entertainment unit, told the Seattle Times at E3 2011, that Xbox Live will become the central application through which consumers will buy media -- games, movies and music -- across a variety of devices.

What is surely not a coincidence, Microsoft also said during its E3 keynote that Xbox Live on the Xbox 360 is getting a new look -- one that incorporates the company's "live tile" design seen on Windows Phone 7 handsets and which it has said will be central to the look of Windows 8.

Xbox Live currently only runs on the Xbox 360 home console and Microsoft's Windows Phone 7 devices.

"Live has been successful on the Windows Phone," Delman said in the Seattle Times report. "Live will be built into the PC. It will be the service where you get your entertainment. We were talking about it -- you will not just see consoles and handhelds at this show next year, this show's going to morph into other devices."

Delman also said that the way Xbox Live will work across devices -- whether consoles, phones, or Windows 8 PCs and tablets -- will be similar in approach to some of its competitors for entertainment sales online.

"There will be a lot of similarities in design and service philosophy," he said in the report. "Whether it's us or Apple or anybody else, people want to be able to navigate through multiple devices in a certain ecosystem very seamlessly so we're committed to that."

But while Apple has a central entertainment storefront in iTunes, which sells iOS apps, movies, music and games, Microsoft's offering are spread across various online marketplaces, but that too will change, Delman said.

"Xbox Live will be the pervasive media service across devices," he said in the report, later adding that Microsoft has "a ton of assets" and that "unifying the assets will be good for us and good for consumers."

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-- Nathan Olivarez-Giles

Twitter.com/nateog

Photo: Microsoft demonstrates new user interface for its Xbox Live service during the Electronic Entertainment Expo in Los Angeles. Credit: Ricardo DeAratanha / Los Angeles Times

The major Hollywood studios persuaded the Federal Communications Commission last year to allow them to offer movies through pay-TV services several weeks earlier, before they're released on disc. They didn't start testing the service until mid-April, however, and have made it available only through DirecTV.

On Tuesday, San Diego-based Verimatrix announced a watermarking technology that studios could use to help combat piracy on streamed movies, potentially encouraging them to offer more early-release films. The watermarks won't make the offer more appealing to consumers or the studios' other distribution partners, though, and those hurdles are at least as big for the early releases as the technological limitations.

Culver City-based Sony Pictures Entertainment Inc., the television and movie studio for the Japanese electronics giant, confirmed late Friday that it been hacked and was working with the FBI to identify the attacker.

In a statement, the studio's chairman Michael Lynton and co-chairman Amy Pascal said that a "cyber-crime wave that has affected Sony companies and a number of government agencies, businesses and individuals in recent months has hit Sony Pictures as well."

"[Thursday] afternoon a group of criminal hackers known as 'LulzSec' claimed to have breached some of our websites," the statement said. "We have confirmed that a breach has occurred and have taken action to protect against further intrusion."

The studio said it had hired "a respected team of outside experts is conducting a forensic analysis of the attack." In addition, it said it had contacted the FBI and was "working with them to assist in the identification and apprehension of those responsible for this crime."

"We deeply regret and apologize for any inconvenience caused to consumers by this cyber-crime," the statement said.

On Friday, LulzSec, a hacker group which has claimed responsibility for hacking PBS' and Sony's websites recently, posted personal data from Sony Pictures servers.

The group posted the data to the website Pastebin and the Associated Press reported that it had verified it with people whose information -- including user names, passwords, addresses and phone numbers -- was leaked and indeed from Sony.

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--Peter Pae

Photo: Sony Corp. has been under attack by a group that hacked into the electronic giant's television and movie studio business. Credit: Kim Kyung-Hoon/Reuters

Apple's upcoming iCloud service is looking to push users into the cloud -- or at least their iTunes music collection anyway -- and it will be doing it for free.

Well, at no charge to consumers to start.

But, later on, Apple is planning to charge iCloud users a fee of about $25 a year to upload their music collection to the tech giant's servers so they can stream the music through a Web browser, or to whatever iPod Touch/iPhone/iPad or Mac they like, reports The Times' Alex Pham over on our sister blog Company Town.

And while sources familiar with the negotiations between Apple and major record labels surrounding the iCloud service have said music listeners won't have to fork over cash for cloud at first, funds will be changing hands between the companies involved to pull all this off.

Apple completed its negotiations with the four largest record labels on Thursday for iCloud, and is set to have contracts in place with music publishers by Friday, Pham reported.

From Company Town:

The agreements, finalized this week, call for Apple to share 70% of any revenue from iCloud's music service with record labels, as well as 12% with music publishers holding the songwriting rights. Apple is expected to keep the remaining 18%, said people knowledgeable with the terms.

Music companies that have signed on to iCloud include Warner Music Group, EMI Music Group, Universal Music Group and Sony Music Entertainment. Representatives from the four companies could not be immediately reached for comment.

Though the service is initially focused on allowing consumers to store their music on Apple's servers, the Cupertino, Calif., technology company ultimately envisions the service to be used for movies, TV shows and other digital content sold through iTunes, said a person knowledgeable of the company's plans.

If Apple has, or gets movie and TV studios on board, that might pit iCloud as a challenger to services such as Netflix or Hulu, and put in competition with cloud-based music streaming services from Amazon and Google, which beat Apple to the market, but haven't done so with the cooperation of major record labels.

Apple's Chief Executive Steve Jobs will be unveiling the details of iCloud, iOS 5 and Mac OS X Lion, on Monday at the company's Worldwide Developers Conference in San Francisco.

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-- Nathan Olivarez-Giles

Twitter.com/nateog

Photo: Apple CEO Steve Jobs gives a wave at the conclusion of the launch of the iPad 2 on stage during an Apple event in San Francisco on March 2. Credit: Beck Diefenbach / Reuters

Warner Bros. is in advanced talksto buy the social networking and movie ratings website Flixster.

Ben Fritz, a Times reporter covering the movie industry, has found out that the Time Warner-owned studio could pay close to $90 million in cash for Flixster.

Film fans can rate movies on Flixster, as well as offer their take on movies using various social networking tools and also through popular smartphone apps.

From Fritz's report on The Times' Company Town blog:

Should the purchase close, it would give Warner Bros. access to an audience of more than 20 million registered users as it seeks new ways to promote and distribute its movies online. Warner recently became the first studio to start renting movies through the social network Facebook. On Monday the studio added five films, including two "Harry Potter" sequels, "Inception," "Life as We Know It" and "Yogi Bear," to its initial Facebook offering, "The Dark Knight."

Because Flixster's primary business is a database of billions of movie ratings, its potential ownership by Hollywood's largest studio could cause a conflict in the eyes of consumers. A person close to Warner said that separating that side of the business from any other initiatives the studio pursues on Flixster would be critical following an acquisition.

Flixster also owns one of its biggest competitors, Rotten Tomatoes, which it received last year when it bought the movie ratings site in a move that resulted in it giving up 20% of its shares to News Corp., which owns the studio 20th Century Fox, the Wall Street Journal and MySpace, Fritz reported.

To read Fritz's full report on the talks between Warner Bros. and Flixster, head over to Company Town.

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-- Nathan Olivarez-Giles

twitter.com/nateog

Facebook is now officially in the increasingly competitive market for watching movies online.

On Tuesday, Warner Bros. offered up its hugely popular film "The Dark Knight" for rent on Facebook.

So far, that's the only movie that can be streamed over the Internet and watched within Facebook, but Warner Bros. has said that more of its films will soon be available too, as reported by Ben Fritz on the Times' Company Town blog.

From Fritz's report:

Facebook fans who "liked" director Christopher Nolan's "The Dark Knight" can now pay $3 to rent the superhero film through the movie's page on the site. Warner Bros. said that over the coming months it would make additional titles available for rental or purchase.

The new offering, which Warner described as a test, is part of an ongoing effort by Hollywood studios to offer their movies in more ways online to boost the still-nascent digital-distribution business. Increasing online rentals and sales is critical for the entertainment industry as revenue from DVDs continues to fall.

Warner Bros. seems to be among the more active movie studios looking to the Web and different platforms to distribute its films. Last month Warner Bros. launched iOS apps for "The Dark Knight" and "Inception" -- two blockbuster films directed by Christopher Nolan. From within the apps themselves, users can buy (and download) or rent (and stream) either movie.

In order to watch "The Dark Knight " on Facebook, users have to first have "liked" the movie's Facebook page, and then allow a "watch app" for the film to install itself into their Facebook account -- granting Warner Bros. access to each user's name, profile picture, gender, networks, user ID, list of friends and "any other information I've shared with everyone," which for many will include e-mail address and just about anything posted on their respective Facebook profile pages.

Facebook users then have to pay for the right to watch the film using 30 Facebook Credits (equal to $3). Once paid for, by credit card or PayPal or via cellphone, the film can be viewed on Facebook as many times as a user would like during a 48-hour period.

After 48 hours, the right to view the film expires. Watching it on Facebook again costs another 30 Facebook Credits.

Facebook, which is the most popular social networking website in the world and the most popular photo-sharing site too, is launching a threat to the current heavyweights in movie and TV streaming: Netflix, Apple, Amazon and Hulu (owned by NBC, Fox and ABC).

Netflix is currently the most popular streaming video service, with a subscription-based option that allows users to watch movies and TV shows over the Internet for $7.99 a month.

Amazon is looking to take on Netflix as well, and last month it added streaming video to its Amazon Prime subscription offering, which runs $79 a year and also offers free two-day shipping on items purchased from Amazon.com.

Apple is a major player in the still-emerging market of video over the Internet, with streaming rentals and downloadable purchases for TV shows and movies through its iTunes store. Other players include Best Buy's Cinema Now and Blockbuster on Demand.

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-- Nathan Olivarez-Giles

twitter.com/nateog

Amazon.com has officially jumped into the fray of subscription video-streaming services, charging into competition with Netflix and Hulu Plus, among others.

However, the Seattle-based retail giant is taking a different route than Netflix and Hulu. Whereas both of those services charge a monthly fee of $7.99, Amazon has added its streaming video to its Amazon Prime membership.

Until Tuesday, Amazon Prime was a $79-a-year offer that gave subscribers free two-day shipping as its main enticement. Now, U.S. Amazon Prime members can download about 5,000 movies and TV shows at no added cost. Amazon Prime's instant video can be watched via the Web browsers on computers, smart phones and tablets, as well as certain Blu-ray players and some set-top boxes such as the Roku.

Los Angeles Times reporter Ben Fritz covered the story this morning on the Company Town blog, writing:

Amazon has signed up two major studios, Sony Pictures and Warner Bros. -- to provide older movies from their libraries -- along with 13 independent providers including the BBC, PBS, Magnolia Pictures, IFC and National Geographic.

The eclectic mix of content immediately available includes the movies "Hairspray," "The Human Centipede" and "Stripes" and the TV shows "Mister Rogers' Neighborhood," "Bonanza" and "Farscape."

That's only a fraction of the content available to subscribers of Netflix, which has deals with every major film studio and a number of TV producers. Moreover, though most of Amazon Prime's content is more than a decade old, Netflix has much fresher titles, including movies less than a year old, thanks to deals with pay cable networks Starz and Epix.

Amazon, however, is in talks with every Hollywood studio and is said by people familiar with the matter to be seeking to grow its content selection with more and newer content.

Amazon has been planning its entry into the subscription-based streaming video market since last summer, Fritz said, noting that Netflix has more than 20 million subscribers with about two-thirds of them using the company's streaming option.

To read the rest of Fritz's report, head over to Company Town for Amazon launches Netflix-like streaming service with content from Warner Bros., Sony and independents.

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-- Nathan Olivarez-Giles

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Image: A screen shot of a listing for the movie "Bullitt," available for streaming to Amazon Prime members. Credit: Amazon.com

Warner Bros. is looking to sidestep Apple's iTunes, which doesn't offer its movies through the content service in 23 countries, by turning its films into apps for the iPhone and iPad.

On Wednesday, the studio released "app editions" to the Apple App Store of its award-winning Christopher Nolan-directed films "The Dark Knight" and "Inception," as reported by The Times' Ben Fritz on the Company Town blog.

Users of devices running Apple's iOS -- the iPad, iPhone or iPod Touch -- can download the movie apps for free and watch the first five minutes of the movie; games, trivia and other extras are packed in as well. To watch the full movie, users will have to pay -- $9.99 for "The Dark Knight" and $11.99 for "Inception" in the U.S.

Fritz reported on the deal Tuesday night, writing:

It's the first time that movies have been available to download on Apple's popular mobile devices outside of its iTunes Stores.

The new initiative by Warner is significant because it allows the studio to offer movies in a number of markets without waiting for Apple to launch a full digital movie store. Of the 35 countries where it will be available, 23 don't have iTunes movie downloads, including such fast-growing theatrical markets as China and Russia, along with a number of European countries including Greece, Hungary, Portugal and the Czech Republic.

"We think this is an innovative way to build a global footprint on devices that are optimized for video viewing," said Thomas Gewecke, president of digital distribution for Warner Bros.

Overseas prices range from as little as $7.99 for "The Dark Knight" in some European countries to $23.99 for "Inception" in New Zealand. In China and Russia, "Inception" costs $18.99.

Read the rest of Fritz's report on Warner Bros.' movie apps over on Company Town.

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-- Nathan Olivarez-Giles

twitter.com/nateog

Image: Screenshots of the app editions of "Inception" and "The Dark Knight." Credit: Warner Bros./Apple

A movie shot entirely on an Apple iPhone 4 is on its way to theaters in South Korea.

Award-winning filmmaker Park Chan-wook has shot a 30-minute film, called "Night Fishing," using only an iPhone 4. The movie is about a man who goes fishing at night and finds a female shaman, according to Reuters.

"Night Fishing" was shot using up to 10 iPhones filming simultaneously from different angles. About $130,000 was spent making the movie.

In an interview with Reuters, Park said of the process: "There are many limits. ... However instead of complaining, it should be approached in a unique style that is intended for the movie. Then it can have better results than any other movies."

Park also said he hoped the movie would be a catalyst for young filmmakers to see smart phones as an artistic tool.

"Night Fishing" is set to open in nine South Korean theaters in late January.

Park is best known for his "Vengeance Trilogy" of films, which include "Sympathy for Mr. Vengeance," "Oldboy" and "Lady Vengeance."

"Oldboy" is a cult classic, and director Steven Spielberg and actor Will Smith were said to be mulling over a possible remake of the film. Park also is working on an English-language film.

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-- Nathan Olivarez-Giles and Tim French

twitter.com/nateog

The ability to rip CDs helped transform music consumption (and, some would argue, hasten the demise of CD sales) by making songs more portable and accessible. That revolution hasn't come to DVDs -- it takes more technical savvy to convert a movie disc into an easily playable file, and it's illegal in the U.S. to make software or devices to help people do that. Every year at the Consumer Electronics Show, at least one device maker demonstrates a new way to get around that hurdle (this year's entry: Moovida), but stiff opposition from the studios (and their lawyers) has stopped most of those products from reaching the masses.

At this year's show, though, studio executives opened the door to retailers converting their customers' DVD collections into movie files stored online. Such conversion services are a likely part of Ultraviolet, the online video distribution initiative by a consortium of studios, tech companies, retailers and service providers. The first UV products and services are expected to hit the market later this year.

The catch is that the files stored online would be confined to Ultraviolet's walled garden, playable only on devices compatible with UV's standards. So it's not clear at this point what compatibility problems might emerge. But with companies expected to develop UV-compliant applications and players for a wide variety of computers, mobile devices and set-top boxes, the disc-to-cloud conversion is likely to appeal to at least some movie collectors.

It's those consumers -- the ones willing to spend the extra dollars to buy a movie instead of just renting it -- who are critical to the success of UV. The consortium's platform is designed to promote movie sales by eliminating many of the off-putting restrictions that the studios impose on downloadable movies without abandoning the limits on copying and sharing that Hollywood demands.

UV-certified downloads can be shared between UV-certified devices and streamed to Internet-connected PCs, TVs and mobile devices running software that meets UV's specifications. And UV-branded Blu-ray discs and DVDs will come with "a copy in the cloud" that can be streamed, downloaded or burned to a disc, said Thomas Gewecke, president of digital distribution for Warner Bros.

But what about all the discs people already own? Several UV backers said they expected to see retailers offer consumer the chance to convert existing discs into UV files stored online. But "we don't know what form yet that's going to take," said John D. Calkins, executive vice president of global digital and commercial innovation for Sony Pictures Home Entertainment. "Nobody's figured out ... how you go at that opportunity."

Among the unknowns are what price, if any, consumers might be willing to pay for such a service and what compensation, if any, the studios would demand for the right to make a copy in the cloud. Nor is it clear how hard it would be to verify that the DVDs being converted were ones that had been bought. Ultimately, the lower the bar that studios and retailers set for converting DVDs, the more likely they'll be to draw movie collectors into the UV fold.

The prospect of converting DVDs opens up all sorts of new opportunities for retailers -- for example, the ability to sell UV-compliant digital storage units pre-loaded with the customer's entire movie collection. So retailers can be expected to push to make DVD conversion a reality. Whether consumers respond to the offer remains to be seen.

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-- Jon Healey

Healey writes editorials for the Los Angeles Times' Opinion Manufacturing Division.