In Hollywood's biggest move yet to zap movies digitally to viewers through the Web, five major film studios yesterday announced a joint on-demand movie service that will offer old and new releases for broadband Internet users in the US.
The studios involved in the service are Metro-Goldwyn-Mayer Inc, Viacom Inc's Paramount Pictures, Sony Corp's Sony Pictures Entertainment, Vivendi Universal's Universal Studios, and Warner Bros, a unit of AOL Time Warner Inc.
Among Hollywood's major movie studios, only The Walt Disney Co, News Corp Ltd's 20th Century Fox and privately-held DreamWorks did not participate.
However, sources close to Disney said the company plans to launch its own Internet VOD service through the Movies.com Web site within the next 10 days.
Sony spokesman Don Levy said launch of the service is at least several months away and that a name and a chief executive officer for the service will be announced at a later time.
"We're eager to advance the launch. The venture needs to complete development of its infrastructure, establish a management team and complete testing," a Sony spokesman said.
The studios are working on technology developed by Sony over the past 18 to 24 months under a project called Moviefly, intended to allow users to download movies from its Web site to their personal computers where they can be viewed for a fee.
"The service will be built on the core technology, work and investments we we made on Moviefly, but it will ultimately be different because it involves five studios," said Yair Landau, president of Sony Pictures Digital Entertainment.
In all cases, movies will be supplied to the service on a non-exclusive basis. Each studio will independently determine its own release schedule and pricing.
Landau also said that Fox and Disney would be free to distribute their films on the venture.
A spokeswoman for Disney reiterated its plan to launch a video-on-demand service through its Web site Movies.com, but declined to say when the service would launch or in what form.
She also declined to comment on whether Disney had been approached to be a part of the new joint service announced yesterday. The others were not available for comment.
The service will use digital rights management technologies by Microsoft Corp and RealNetworks Inc and will be viewable with either company's media player.
The major studios have been working behind the scenes to develop Web services before facing a threat such as the recording industry's high-profile challenge from the once wildly-popular free song-swap service Napster.
Security experts estimate that up to 400,000 bootlegged films are already swapped daily on the Internet.
While broadband penetration is rising in the US, the amount of broadband -- or high-speed Internet connections -- in homes is still below the level needed to support a costly on-demand digital distribution channel, experts said.
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