Hollywood Hits The Net

Six major movie studios began offering their releases for digital download on April 3, through online services Movielink and Cinema Now. While this marks the first time consumers can legally download films, the achievement is marred by limitations and high prices.

Movielink, which is owned by Warner Bros., Sony Pictures, Universal, MGM and Paramount, began by offering more than 300 titles from the five studios and Twentieth Century Fox. The titles are a mix of classics, blockbusters and Academy Award-winning films including "Brokeback Mountain," "King Kong," "Office Space" and "Breakfast at Tiffany's." Prices range from $10 to $30.

CinemaNow, which signed deals with Sony, MGM and Lionsgate (which has a stake in the company), began with 85 titles, with prices ranging from $9.95 to $19.95.

In other words, customers pay as much—or in some cases more—as they would for a DVD. But because of digital rights management restrictions, they get less for their money.

Movielink customers download a Windows Media, DRM-protected file to their PC. The download can be played on two other computers and a backup can be burned to a DVD, but it cannot be played on a DVD player. Streaming via home networking is the only way to view a download on a TV. CinemaNow users are able to download one copy to one computer.

The new offerings are being trumpeted by the film industry as groundbreaking. "This is the milestone we've been waiting for," CinemaNow CEO Curt Marvis said in a statement. At a press conference, Universal Pictures president/COO Rick Finkelstein called it "a very new and exciting way of delivering our film product to consumers."

Kevin Tsujihara, president of Warner Bros. Home Entertainment Group, added during a press conference: "[Movielink] is an important first step in the creation of a digital distribution business."

For now, industry analysts think that's all it may be. "Consumers are aware of pricing and portability options," says Russ Crupnick of NPD Group. "Restricting them puts a cloud over the potential [of the appeal] for mainstream people." ••••