Studios Plan Downloadable Flicks

Looking to avoid a Napster-like movie-swapping free-for-all, five of Tinseltown's biggest studios have banded together to create a new Web-based video-on-demand service

The yet-to-launch system, anointed "Moviefly," will see many of today's feature films released securely over high-speed Internet lines and delivered right to consumers' home computers. It will also combat the ever-increasing threat of movie piracy that has studios scared stiff.

Sony Pictures, Warner Bros., Universal, MGM and Paramount announced their plans Thursday, heralding the film industry's first step into Internet-based movie rentals.

We're guessing the folks over at Blockbuster are sweating about now.

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

Sony was one of the major architects of the initiative, having its engineers working on the back-end technology for more than a year.

All five studios have an equal stake in Moviefly and plan to make both current and old movie titles available for download. Ultimately, consumers will be able to scan through a catalog of titles (with the option to search by a particular studio, actor or director), watch previews and download a flick for about $4 per title.

Each download could take anywhere from 40 minutes to a few hours (depending on the connection), but once it lands on a computer, it will remain there for up to 30 days and then disappear. Once the file is opened, consumers will have 24 hours to view the film--either on their PC monior or through a TV hooked to their computer. Viewers will have the option to pause, fast-forward and rewind the movie at will, just like a normal VCR.

Reps for the studios couldn't say when exactly Moviefly will launch, but according to Warner Bros. Home Video President, Warren Lieberfarb, movie buffs won't have to wait too long.

"It won't launch in two months, but it won't be two years, either," Warren Lieberfarb, president of Warner Bros. Home Entertainment, tells the Hollywood Reporter. "The technology is developed, and a CEO search is under way."

The initial start-up will include nearly 100 titles, with each studio deciding release dates for its movies, as well as pricing.

But now all the studios are on board: major hold outs include 20th Century Fox, DreamWorks SKG and the Walt Disney Co. Disney, in fact, has entered into a partnership with Fox to develop their own video-on-demand service, which studio insiders say will be unveiled in a matter of days.

Jack Valenti, head of the Motion Picture Association of America and Hollywood's chief lobbyist in Washington, D.C., has been advocating such an initiative in an effort to avoid the music industry's Napster war. He was pleased with yesterday's announcement.

"In a very near future, a broad selection of motion pictures will be available online, protected by encryption and delivered directly to consumers at a reasonable price. Great news," says Valenti in a statement.

Still, the studios better work fast. Web and Hollywood analysts estimate that more than 400,000 films--including monster box-office hits like Stars Wars: Episode I--The Phantom Menace, Gladiator, Planet of the Apes and The Matrix--are traded illegally over the Internet everyday.

That number is expected to shoot way up as the number of users with high-speed Internet access will more than triple from 8.2 million households to nearly 27 million by the year 2005.