Hollywood unveils movie site
2002-11-11 15:15
Los Angeles - Five top Hollywood studios opened online box office Movielink on Monday in their first, tentative step to sell blockbuster films like Ocean's Eleven on the Web after years of fretting over the copyright piracy now threatening the music business.
For years the studios have grappled with exactly how and when to sell movies on demand via the internet in what they see as a lucrative, new market for their libraries of movies.
Movies on DVD have been a major contributor to studios profits since their launch five years ago, ringing up total sales of $4.6 billion in 2001. Industry watchers believe Web-based video on demand can be even bigger.
But even Movielink chief Jim Ramo said those kinds of sales are far on the horizon. Movielink's aim is to prove a market exists, test prices, learn about users and, importantly, send the pirates sailing into the internet sunset, he said.
"We think we are early enough in the cultural usage of movies on the Web, that we are able to make the pirates, deviants," he said in a recent interview.
Movielink lifts the curtain on its service with the backing of Warner Bros., Paramount Pictures, Universal Studios, Sony Pictures Entertainment and Metro-Goldwyn-Mayer Inc.
At its launch, Movielink is offering 170 titles from Oscar winners like 2001's A Beautiful Mind to the classic Breakfast at Tiffany's. In between, are action films such as Air Force One, kids flicks like Harry Potter and the Sorcerer's Stone and comedies such as Men In Black.
Prices will range from around $1.99 for older titles to about $4.95 for recent releases, and the service comes with VCR-like functions such as pause, rewind and fast-forward.
The movies are downloaded onto a computer hard drive, where they reside for 30 days, without being played, before being deleted. Movielink users must have high-speed Web connections, otherwise the time to download is prohibitive, Ramo said.
Once a film is started, viewers have 24 hours to watch the full movie before it is deleted, which is among the built-in protections to keep users from posting films on file-sharing Web sites where they can be swapped for free.
Such peer-to-peer swap sites have clobbered the music industry and led to declining sales of CDs. The movie studios want to ensure the same thing doesn't happen to them.
Ramo said market tests of one major market could be travelers who download movies onto a laptop computer to watch while on the road or to set up for their kids in the backseats of cars.
College students with high-speed Internet connections, too, are expected to be a core, early audience.
Ramo said more than 25 US million homes now have broadband connections, representing a sizable potential market.
Movielink competes with CinemaNow, the only other movie download site to license films from Hollywood studios. It is backed by film company Lions Gate Entertainment, Microsoft Corp. and Blockbuster Inc.
CinemaNow Chief Curt Marvis said his site gets about 50 000 users a day, or 1.5 million a month, but most are downloading movie trailers and other free clips. CinemaNow converts about 1% of those people to paying customers, he said.
Marvis is not worried about competition, especially this early in the evolution of movies on the Web. "One reason we are excited about Movielink is we think they have great potential to increase visibility" of watching movies online, he said.
Like Ramo, Marvis said the market is still in extremely early stages and mass market potential - in which movies are downloaded via the Internet then watched on television sets - is likely three or more years on the horizon.
"We think 2002 is ground zero, but the reality is by 2005 this will be commonplace," he said.
He said CinemaNow expects to show profits in early 2004.
Ramo declined to comment on projected profits or on the amount of funding the studios are putting into Movielink.
Warner Bros. is a unit of AOL Time Warner Inc., Paramount is part of Viacom Inc., Universal Studios is a unit of Vivendi Universal, Sony Pictures Entertainment is the movie division of Sony Corp. and Metro-Goldwyn-Mayer Inc. is its own public company backed by billionaire investor Kirk Kerkorian.