Major Studios in Joint Venture to Offer Movies Via the Internet

LOS ANGELES: Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. have joined forces to create an on-demand movie service, the first service to offer a broad selection of theatrically-released motion pictures via digital delivery for broadband Internet users in the United States.

The announcement was made today by senior executives from each of the participating studios. "By combining the ideal blend of innovation, technology and the Internet, we have created a revolutionary delivery system that effectively offers consumers the best in choice and convenience in the evolving digital landscape," says Chris McGurk, vice chairman and chief operating officer, MGM. "This venture promises to be a dynamic infrastructure for exploiting MGM's renowned brand and film library."

With more than 10 million broadband households and nearly 35 million broadband-enabled screens, which include business and college connections, the studios believe this market has reached a sufficient size to support the creation of an on-demand digital distribution channel.

The service will offer broadband Web consumers a wide selection of recently released films as well as additional content from film libraries spanning all genres--action, comedy, drama, family, children, foreign and classics. The service will also be available to other film producers and distributors who want to distribute their films to this consumer base. Each content provider will independently determine its own release windows and pricing strategies. Further details, including a name and launch date, will be announced at a later time.

The introduction of the service represents a significant advancement in the development of the Internet as an entertainment medium, says Mel Harris, president and COO of Sony Pictures Entertainment. "In increasing numbers, we see audiences turning towards the broadband Internet as an exciting new channel through which they can access entertainment," he says. "Sony Pictures, along with other studios, intends to give them the opportunity to do this."

Jonathan Dolgen, chairman, Viacom Entertainment Group, calls the initiative a "groundbreaking endeavor. With this service, we can successfully deliver quality content to movie enthusiasts, providing them with greater choices and access, as well as a secure platform to receive their filmed entertainment," he says. "This service demonstrates Paramount's commitment to the digital distribution of our content via the Internet."

And Ron Meyer, president and COO, Universal Studios, says the new service provides another distribution alternative for the studio and its consumers. "We are always looking for new ways to bring our content to the consumer," he says. "This is one of the many distribution avenues we are pursuing to provide on-demand entertainment in the United States."

The studios say the service will deliver film content to consumers reliably, securely and conveniently in a relatively short period of time. Delivery time will vary depending on the speed of the user's access technology. The service will launch with premium film content available via PCs. It will primarily be an open-access Internet Protocol (IP) based system, although other means of delivery will be explored after the launch of the service.

Movies may be viewed on computers or on a television connected via an ordinary S-video cable or radio frequency device connection, a standard on many current computers. Rollout to other devices and distribution systems is anticipated at a later date.

The studios also say the service will provide an appropriate level of copyright protection to enable the legitimate distribution of content on the Web, with the latest Digital Rights Management (DRM) software incorporated and updated over time.

Comments Barry Meyer, chairman and CEO, Warner Bros., "We believe human nature is not predisposed towards piracy. By proactively offering a convenient, affordable, high-quality source of content, the film industry can meet the needs of the public, while successfully protecting our intellectual property as we move further into the digital millennium."