This summer, the Paramount film Star Trek Into Darkness managed an impressive thing for a major blockbuster released in 2013 — not only was it critically popular for the most part, but it actually managed to make some money at the box office, as well.

But the site Trekcore.com last week ran an extraordinarily thorough review of the upcoming Blu-ray release of Star Trek Into Darkness — one that rated the Blu-ray transfer quality at five stars, but the special features at 0.5 stars.

Why such a dramatic difference in the ratings? Because, as Trekcore lays out:

There’s no denying that the high definition presentation of this film looks absolutely beautiful — but this is the most confusing, exploitative release ever to bear the Star Trek name.

The primary issue is that of “retailer exclusives” — different versions of the film being packaged with different sets of special features, depending on where you buy the film once it’s available September 10th on Blu-ray.

This means getting an entirely different set of behind-the-scenes featurettes if you buy the film from Target versus Best Buy, and that’s only within the United States — other international releases feature additional features and visual options (including a German edition which may include IMAX-formatted footage).

Plus, the only way to acquire any version of the film that includes an audio commentary is to either buy the film on iTunes or use the accompanying digital download code on the Apple service.

That gets you access to the “visual commentary track” — which is not tied to the original download, but is instead a five GB download of the film described by TrekCore as follows:

The iTunes commentary is more than just an audio track — it’s an entirely separate encoding of the film, with on-screen picture-in-picture annotations and behind-the-scenes footage. There’s no additional scenes in this version of the film, but because the commentators often pause and rewind footage to highlight specific elements of production, the thing runs nearly thirty minutes longer than the standard film.

And while director J.J. Abrams and cast members have mentioned the existence of at least two deleted scenes, the only sign TrekCore could find of those scenes being available on Blu-ray was an upcoming Australian release — a release that may also be tied to another retailer exclusive in that country.

One of those two known deleted scenes, just for the record, is a shower scene featuring fangirl icon/breakout star Benedict Cumberbatch, which Abrams teased earlier this year on Conan. That seems like something that would sell a few box sets.

Amazon rankings, at time of writing, did have pre-orders for Into Darkness at #17 in the Movies & TV category, and the film is also at #4 on the iTunes best-sellers chart. But according to TorrentFreak, a torrent of Into Darkness is already the second-most downloaded movie of last week.

Special features don’t seem to have popped up on BitTorrent yet, but that’s not hard to imagine changing in the next few weeks. Because that’s going to be the only real way to get a complete set — Paramount has no track record for creating “complete” editions of its past Blu-ray releases.

So what does this ultimately mean for the film’s release? It’s not necessarily something the casual viewer will notice — the casual viewer will probably be content with the iTunes edition, or waiting for it to be available on VOD or other streaming options.

But that’s because the casual viewer probably isn’t interested in spending $102.98 without shipping costs (according to math done by a TrekCore commenter) to get the majority of the special features.

And that’s undoubtedly math that Paramount is counting on — has, in fact, counted on in the past.

But trying to keep an entire industry alive on the backs of devoted fans craving limited edition features isn’t the most solid business model. It’s a solution that speaks of short-term thinking, at a time when the rise of HD-quality video coincides with ever-shrinking data caps.

The physical media world has enough problems — why alienate the consumers who are still shelling out cash?

For now, HitBliss is available only on the web and on desktops, not on mobile devices — though the company plans to expand to other platforms soon. Among the available content at launch are new movies like Argo, Magic Mike and The Bourne Legacy and new episodes of shows like Real Housewives and The Walking Dead.

Users are served a “playlist” of ads that are delivered to them based on information that they include in a profile. When they watch the ads, they earn virtual cash that can eventually be redeemed for content. Users can specify how much information they’re willing to make available to advertisers; the more information they share, the faster they earn.

Other companies have dabbled with virtual currency in exchange for video. Yidio, for instance, gives users points for completing various tasks, and the points can then be redeemed for Amazon Video on Demand credits. HitBliss is different, however, in that both earning and viewing are done through the same platform.

As HitBliss users watch ads — which they can do at any time, not just right before they want to watch a movie or TV show — cash accumulates in their accounts, and they can redeem it when they wish. HitBliss charges $3.99 for a new movie rental, $1.99 for an older movie rental and $1.99 per TV episode. (Movie rentals last 24 hours, while users will own the TV episodes.) In general, about 8 to 10 minutes of ad viewing (roughly four ads) can be redeemed for one new movie.

The system includes a lot of checks to make sure that users are actually watching ads. “Advertisers are only paying when users are paying attention,” HitBliss cofounder and CMO Sharon Peyer told me. If a user plays an ad and then navigates away or mutes the sound, the ad pauses. An “attention assurance meter” — with a patent pending — occasionally requires users to click it to ensure that they’re paying attention; if they are not, “it gets very angry,” Peyer said, referring to a smily-face icon that turns to a frown the longer it is ignored, before ultimately resetting the ad and requiring the user to watch it again. Over time, users earn “trust points” that decrease the frequency of prompts to make sure they’re paying attention.

Peyer said the platform’s store will eventually expand to include other types of digital content, like apps and virtual goods. HitBliss is based in Lexington, Mass., and is backed by Andy Marcuvitz’s Alpond Capital. Peyer and her husband, CEO Andrew Prihodko, founded the company in mid-2008 after selling a video- and picture-sharing site called Pixamo.

The Nexus 7, on sale in Japan via the Google Play website today, will sell for 19,800 yen (about $254) in Japan. Buyers also get a 2,000-yen credit to the Google Play store. Reuters reports:

Japan has rapidly embraced the smartphone, with devices running Google’s Android operating system tripling in the past year, according to Google. Google said that Japan now ranks third in terms of downloaded applications from its Play store.

Reuters also says that in addition to rental movies, Google will sell movies from Sony and Paramount to customers in Japan.

In addition to Japan, Google ebooks are now available in the U.S., Canada, Australia, Germany, Spain, Italy, France and, as of earlier this month, South Korea. Kobo, owned by Japanese e-commerce giant Rakuten, launched in Japan in July. Amazon is expected to launch the Kindle e-reader in Japan in October.

The deal puts some of Paramount’s recent theatrical hits on YOU’s cable-based pay-per-view and subscription video-on-demand services in China, including Transformers: Dark of the Moon and Mission: Impossible – Ghost Protocol.

The company has previously made content licensing deals with Warner Bros., Disney, Lionsgate, Miramax, Magnolia Pictures and Gravitas Ventures, among other suppliers.

Also read: Chinese VOD operator YOU on Demand debuts on the Nasdaq

Founded by Shane McMahon, son of World Wrestling Entertainment chairman and CEO Vince McMahon, YOU on Demand became the first company to secure licenses from the Chinese government to operate national PPV and VOD services. The company, previously known as China Broadband before ditching the internet side of its distribution model, went public in June 2011 and began trading on the Nasdaq in late May of this year.

Also read: Chinese theatrical market booms, but real action might be in VOD

However, since debuting on the Nasdaq at around $5.50 a share May 29, the company’s stock price has dropped, to about $4.30 on Wednesday.

The company claims distribution to five million subscribers in China currently and is aiming for eleven million by the end of 2012.

In papers filed in New York federal court, Paramount (NYSE: VIA) Pictures accuses the estate of author Mario Puzo of tarnishing the godfather brand by publishing a series of mediocre sequels.

According to Paramount, it owns all rights to the Godfather franchise based on a 1969 agreement with Puzo. After Puzo died in 1999, the studio granted his heirs and Random House the right to publish an additional book which appeared in 2004 as The Godfather Returns.

Now, the studio is upset that the Puzo estate published another sequel, The Godfather’s Revenge, without permission and that it plans on putting out yet another Godfather work in the near future. Says Paramount:

Far from properly honoring the legacy of the Godfather, the unauthorized The Godfather’s Revenge tarnished it, and in the process, also misled consumers in connection with advertising, marketing, and promotion material related to the first and second sequel novels.

Paramount is claiming copyright and trademark damages, and is asking the court to grant it a temporary restraining order to prevent the new book from appearing.

Godfather complaint

The moves reflect the changing financial environment for movies and TV at a time of dwindling DVD sales, distribution of content through more platforms, and increased value for digital licensing as Netflix (NSDQ: NFLX), Amazon (NSDQ: AMZN) and others look for streaming content. Or as Paramount Chairman Brad Grey explained in the internal memo (posted below), it’s “an effort to be forward thinking about our business at a time when the global entertainment market is evolving.” That includes cutting the costs of doing that business.

Among a host of changes, Amy Powell, EVP-Interactive Entertainment, adds creation of content for digital and online games, while LeeAnne Stables, EVP-Worldwide Marketing Partnerships, takes on licensing of traditional video games. Both will report to Megan Colligan, who is being promoted to president, Domestic Marketing & Distribution.

The picture with this article is of Lesinski with David Caruso at CES in 2008, a snapshot of a moment when you could see that the industry was shifting — a little faster than some wanted, a lot slower than the innovators had in mind — to a time when online video would be more than popular user-gen snippets and pirated movies. One small sign of that: TV star Caruso, avidly engaged in a technological business venture, asked me to introduce him to the digital exec, who had been in the job as president for four days.

——————————–
Memo from Brad Grey:

I am writing to let you know about a number of organizational changes and promotions that we are making at the studio. We are strategically realigning several of our divisions in an effort to be forward thinking about our business at a time when the global entertainment market is evolving.

Our hope is that these moves will allow us to best build upon the successes our studio has enjoyed in recent years as well as enable us to fully capitalize on future growth opportunities.

Today we are announcing the creation of a new division called Home Media Distribution, a single organization based here on the lot, that will oversee our home entertainment, digital licensing and television licensing activities worldwide. Dennis Maguire is being promoted to President, Worldwide Home Media Distribution, and will report to Vice Chairman Rob Moore. In addition, in light of international’s growing significance to our studio, we are centralizing global theatrical management oversight in Los Angeles so as to be closer to the strategic decision making for this part of our business. Marketing and sales functions currently performed locally in territories worldwide will remain unchanged.

We are also making a number of other key promotions and staff changes as part of this realignment.

– Josh Greenstein has been named Chief Marketing Officer for the studio, overseeing all marketing efforts through all distribution channels for the studio worldwide.

– Megan Colligan is also expanding her role and has been promoted to President, Domestic Marketing & Distribution. She will now oversee all domestic theatrical distribution and marketing for the studio. Josh and Megan will continue to report to Rob; and Megan will also report to Josh on marketing.

– Jim Tharp, President, Domestic Theatrical Distribution, will retire as of June 2012 and will assist Rob in the transition to the new team.

– Don Harris, who has served as Executive Vice President of Sales, is being promoted to President, Domestic Theatrical Distribution, and will assume Jim’s day-to-day responsibilities reporting to Megan.

– Hal Richardson will take on the role of President, Home Media Distribution, reporting to Dennis.

– Paramount Digital Entertainment (PDE) will now be folded into other divisions of the studio. Amy Powell, Executive Vice President, Interactive Entertainment, will add the creation of content for digital and online games to her current responsibilities. LeeAnne Stables, Executive Vice President, Worldwide Marketing Partnerships, will assume responsibility for licensing of traditional video games. Both Amy and LeeAnne will continue to report to Megan. Tom Lesinksi, President of PDE, will be departing the studio.

As you can see from what I have outlined above, we have worked to truly align our business for the future. Our hope is that this new configuration will allow us to be more flexible and to best capitalize on all opportunities across the breadth of the studio.

Creating this new integrated structure is only possible because of the wealth of talent we have at Paramount. Josh, Megan, Don, Dennis and Hal are widely and deservedly recognized as leaders and innovators and we are fortunate to have them on our team. I want to thank them for their great work and congratulate them on their new positions. Rob, Frederick and I are looking forward to working closely with them and their teams on finalizing and implementing our new organizational structures over the next several weeks.

Jim’s retirement next summer marks the end of an era. I want to personally thank him for his many years of service, his numerous accomplishments, and for being a real friend to all of us at Paramount Pictures. He has truly set the gold standard for excellence in the distribution field and we are grateful for his active and ongoing guidance in the transition to our new team.

We also appreciate Tom’s many contributions to Paramount’s success. He was instrumental in helping us break new ground in the digital arena and we wish him great success in the future.

I want to thank our executive team led by Rob, COO Frederick Huntsberry and Motion Picture Group President Adam Goodman. Rob was especially central in the creation of this new structure.

I want to close by saying thank you to all of you for your great work at this studio. I am very proud and grateful for what you do for Paramount each and every day.

Brad

– Foxconn: More details emerging on the explosion we first wrote about on Friday. Read the update here.

– iPhone 5: The latest rumor is that the next iPhone will feature curved rather than flat glass. DigiTimes reports that cover glass makers are reluctant to invest in the specialized equipment to make these devices, but that Apple (NSDQ: AAPL) has itself has purchased 200-300 machines for these glass makers to use. If true, Apple will not be the first to try out a curved screen on a handset: Sony (NYSE: SNE) Ericsson’s Xperia Arc, launched earlier this year, features a curved glass face.

– Rooted Android: Looks like another penalty is emerging for breaking out of jail… Turns out that Android handset users who have “rooted” their devices (jailbreaking in iOS parlance) will not be able to watch movies from Google’s new Android Market movie rental service. This, says Android support, is because of “requirements related to copyright protection.” The blog Android Central notes that it’s likely the Android rooting community will find a workaround for this restriction.

– WP7 movie apps: Meanwhile, those who use Windows Phone 7 are also getting an injection of films, but in the form of apps. Paramount Pictures has put 10 films, including Mean Girls, True Grit and Zoolander, into the WP7 Marketplace, with each of them running as a single paid app. Paramount started this scheme back in December, and lets users of the apps share clips, play trivia games and access other related information.

– Fuse Powered: The mobile gaming startup Fuse Powered has received $2 million in seed funding from the BlackBerry Partners Fund, with NFQ Ventures also participating. For the moment, Fuse concentrates not on RIM-supposed operating systems, but iOS, used in the iPhone and iPad (via MBB).

It’s not surprising that Paramount is on that short list of holdouts. Its parent company is Viacom (NYSE: VIA), which has continued waging a high-profile copyright battle against YouTube in the courts. Executives at Fox and Paramount have said they want Google to do a better job of clearing pirate sites out of their search results, and apparently they want to put the brakes on YouTube renting out their content until they see better progress.

In fact, Paramount executive Frederick Huntsberry just testified to Congress about how easy it is these days to find pirate movie sites through a simple Google search.

The three big studios that have signed on to YouTube’s rental deal are Warner Bros. (NYSE: TWX), Sony (NYSE: SNE), and Universal. In addition to holdouts Fox and Paramount, a third major studio, Disney (NYSE: DIS), also hasn’t struck a deal with YouTube yet, but the reasons for that are less clear, according to TheWrap.

Congress first started considering the idea of allowing federal law enforcement to block websites in September, when Sen. Patrick Leahy introduced the controversial COICA bill in the last Congress. Now the House of Representatives is considering a similar proposal, although no bill has yet been introduced.

That debate is taking place against a backdrop in which the government has already begun getting more aggressive with piracy. Since the middle of last year, immigration and customs officials have seized more than 100 domain names of websites they claim were flouting copyright and trademark laws.

Highlights from the hearing included:

Hollywood spokesman describes a “shadow economy” of illicit content. Frederick Huntsberry, the chief operating officer of Paramount Pictures, described how just four or five clicks from a simple Google search consumers are likely to come into contact with websites that stream content from Paramount and others without permission. Huntsberry said the big problem is the flourishing “cyberlocker” sites, which are encouraging users to upload movies and other content by offering rewards. Huntsberry estimated that one site alone, MegaUpload, earns annual profit between $40 million and $300 million.

Congress needs to pass a law to “level the playing field” between legitimate providers and pirate sites, said Huntsberry. “We have reached the limits of self-help,” he said, noting that Paramount sent over 40 million “infringement notices” last year, but it didn’t dent piracy much. (It isn’t clear exactly what Huntsberry meant by an “infringement notice,” since later in the hearing he said Paramount sent 1.5 million copyright takedown notices.) Piracy is stealing American jobs and tax revenue, he added.

Sympathy for the cause but frustration at lack of detail. At least one Congressman was clearly sympathetic to Huntsberry’s overall cause but annoyed by the lack of detail in the proposal. Huntsberry and other witnesses should have brought a specific proposal to the table telling Congress what it should do, said Rep. John Conyers (D-Michigan). “I’m disappointed in all the witnesses,” Conyers said.

“We need the ability for [law enforcement] officers to go after rogue websites,” said Huntsberry. “It is today impossible to even discover who the owners are of these sites, or where they’re served.”

Another witness, analyst Daniel Castro of The Information Technology & Innovation Foundation, gave Conyers some of the specifics he was looking for: Congress should simply create blacklist of sites, then force ISPs to block them and tell search engines to remove them from lists of search results. “The federal government should work with industry to create a master list of all these sites,” said Castro. “You could require service providers and financial networks to stop doing business with these sites.”

Ready to tweak search results? In his presentation, Huntsberry showed how simple searches for normal search terms-like “stream” or “watch movies online” — still brought up many websites the entertainment industry considers “rogue” sites. That clearly had an impact on the panel, and a few different members, including Rep. Tom Reed (R-N.Y.) and Rep. Sandy Adams (R-Fla.), asked about the possibility of giving search prioritization to “authorized” media options like Netflix (NSDQ: NFLX). For example, typing a search for “stream movies” in Google makes the top link a site called Solar Movies, which Huntsberry singled out as a site full of links to pirated content, including just-released films like Paramount’s The Adjustment Bureau.

Most of the panel seemed to support the idea of cracking down on ‘rogue’ websites, but a few had criticisms. Rep. Zoe Lofgren (D-San Jose) again emerged as one of the few Congressional opponents of a simplified system for taking down websites accused of piracy. Earlier this month, Lofgren criticizedthe government’s seizures of websites; today, Lofgren expressed concern that a website-takedown law wouldn’t leave room for fair use or other legitimate uses of copyright material. And she also implied she was concerned about legislators ordering around search engines and ISPs. “If we move into designing technology by the U.S. government, that, too, will move offshore,” she said.

Rep. Mel Watt (D-N.C.) had some concerns about what kind of due process should be involved with removing a website. Both Huntsberry and Castro said that it wasn’t important to let the accused address a judge before their websites were taken; allowing them to come back a day or two after the seizure took place is good enough, they said. Watt was clearly uncomfortable with that proposal. “If you look at physical goods, they are seized without court review,” noted Castro. “I wasn’t too hot on that process, either,” responded Watt. Even if the goods are unlawful, the accused should have an opportunity to make their case before their property is taken, Watt said.

Acting Regitrar of Copyright Maria Pallante testified that shutting down a website “dedicated to infringement” would not violate the First Amendment. But “even the worst of the worst should receive notice,” she said, and relief provided to copyright owners should be “narrowly tailored.” Pallante didn’t take a position on whether the government should tweak search results, saying only that it’s “a harder question.”

As paidContent reported first, Google hired Malik Ducard, senior VP of digital distribution at Paramount, for an unspecified role in “content business development.”

What little known about what Carloss is doing is that he is joining the content acquisition team headed by another executive brought in for his Hollywood resume, Netflix’s Robert Kyncl. Which begs another question: What has Kyncl been doing?

What’s strange about the way Google has been staffing up with entertainment types since Kyncl came aboard in September 2010 is that there’s no clear sense of what Google or YouTube is up to. While the likeliest scenario would be bringing in premium content, there’s been precious little added in recent months, though no shortage of speculation on everything from deals with Miramax to MGM.

A more recent rumor has Google attempting to strike deals with celebrities to create content on their own self-branded YouTube pages, as first reported by Vulture. That’s a very different proposition than just licensing existing content, and unlikely to have anything to do with Carloss given his area of expertise.

There’s lots of activity but little coherence on the content side of Google, but sooner or later it’s bound to all come together.