The Academy Awards were on TV last night, and the many retrospective montages showing 80 years of film made me want to write something about why few of those movies are available legally online today. Remember all those promises back in the late 1990s about how the Internet would soon allow people to watch any movie they want from anywhere at any time? We’re still a long way from that goal. Here’s why legal online movie distribution has been so difficult to achieve.

The first hurdle has been getting the rights to distribute movie content online. The Hollywood writers’ strike forced this issue into the public eye; the main obstacle to a deal was the proportion of revenue that the writers are entitled receive for digital distribution of movies and TV shows. Now that the writer’s strike has ended, the issue seems to be resolved — at least for new movies produced in the U.S. — but the studios may still have to negotiate rights for older movies produced in an era when contracts did not anticipate online distribution. And don’t forget the studios will also need to procure similar rights from actors, musicians, directors, and other rights holders, if they don’t already have them. The process is long and cumbersome, sometimes requiring case-by-case negotiations with each artist involved in each movie.

The second hurdle is getting the content across the Internet. Broadband speeds in the U.S. and Europe are just starting to reach the point where a standard definition movie can be easily downloaded in one sitting. HD will take longer, although abc.com and others are proving that reliable real-time HD streaming is possible across a 2 Mbit downlink. In Japan, where a recent push to deploy 100Mbit fiber optic connections to most homes has been extremely successful, HD movies should download in a matter of minutes, and (Japan-only) services such as gigalink.com seem to be taking off. Yet people there mainly seem to watch Internet video (and live TV) on their broadband-speed mobile phones, and NTT (the telecom giant responsible for the fiber deployment) has yet to launch its video-on-demand service.

The third hurdle — more important for full length movie viewing than for TV shows — is getting the content from the Internet to the living room television. In the U.S., the major players seem to be Netflix, Apple, Xbox, and Amazon. None of these seems to be a great solution yet. Netflix offers a thousand or so titles, but they aren’t in HD and you have to figure out your own way of getting the movies to your TV and streaming doesn’t work on the MacOS. Apple has only just released a new version of its Apple TV, which does offer HD, but you have to buy their box and connect it to your TV. The Xbox is already connected to your TV and has HD titles but uses a confusing “point system” for online purchases, which may be a deterrent for people who do not already use Xbox Live for online gaming. Finally, Amazon Unbox offers a large library online, and if you have a Tivo you can download them directly from your remote, but Amazon is not yet offering HD. Of these four, no clear frontrunner has emerged. Although some argue that there needs to be a common standard before consumers will link up in droves, this is not necessarily true. Online rentals, which seem to be more popular than purchases, typically “self-destruct” after a month or so anyway, so portability between formats is not necessarily as much of an issue as it was with Betamax and VHS or HD-DVD and Blu-Ray.

These hurdles are not insurmountable. The TV studios have proven that the first two can be overcome. In fact, all of the major U.S. TV studios have now jumped on the online bandwagon. Many people in the U.S. are now in the habit of catching missed episodes of “Lost” and other shows by watching them on my laptop, and don’t really seem to mind the occasional ads.

Meanwhile, by most accounts, unauthorized services such as thepiratebay.org and zml.com account for the vast majority of online movie downloads. Megabit-connected users willing to take on the legal risk have access to a wide array of pirated movies from South Korea to Bollywood. So far, it is only in this black market that the promise of ubiquitous movies-on-demand appears close to realization. It should, however, only be a matter of time before the cost and availability of legal downloads reach a level where they can successfully compete with the pirate sites.