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Studios try to meet `demand’ with Movielink

Mar 4, 2002  •  Post A Comment

The movie industry is refusing to be Napsterized.
In both an offensive and a defensive move, five major film studios formed Movielink last summer as a joint venture for the on-demand distribution of their films on broadband platforms. The partnership allows the studios the opportunity to capitalize on a new distribution chain and, perhaps more important, to thwart potential online piracy of their coveted content.
The company’s directors named Jim Ramo as CEO earlier this year. Mr. Ramo is a former executive of DirecTV, TVN Entertainment and Geocast Network Systems.
“One of our goals is to continue the development and delivery of this new way for consumers to access programming through [video-on-demand]. … I don’t know if that is three, five or 10 years [ahead], but the significant part of how we view our programming is not going to be on programmed schedules but when we want it,” he said.
The studios-MGM, Paramount, Sony Pictures Entertainment, Universal and Warner Bros.-launched the project in part in an effort to combat piracy, much like Sony Music Entertainment and Universal Music Group’s online music site Pressplay.com. While movies are not being traded and downloaded in cyberspace as rampantly as songs were during Napster’s heyday, the movie industry hopes to impede a spread of film piracy by offering a legal, legitimate alternative to pirated films.
“If people want the certainty of the delivery of a movie, we believe they will come to a legitimate rather than a pirated site,” said Mr. Ramo.
A confluence of other factors led the movie studio partners to conclude that the time was right to launch Movielink. The growth of consumer electronics devices such as TiVo and Replay’s personal video recorders, the development of cable infrastructure for VOD services and the availability of broadband have all reached the minimum level necessary to begin development of such a new movie distribution service, Mr. Ramo said.
Meanwhile, whether consumers really want to watch movies on their computer screens is yet to be determined. Mr. Ramo believes that as broadband grows, the Internet will network with other display devices more suitable for watching movies. He also envisions the service gaining traction in college dorms-where a computer may be the only device by which to watch a movie-and with business travelers who want to watch films on a laptop while in transit.
As bandwidth increases and TVs get more sophisticated, the line between the TV and PC will blur, said Don Levy, spokesman for Sony Pictures Entertainment. “We are at the early stages and early days of a new distribution channel, and how it evolves will be very exciting,” he said.
The integration of TV and PC is essential for widespread use of the service, said Jim Stroud, an analyst with the Carmel Group in Carmel-by-the-Sea, Calif. “I think until [Movielink] can deliver this to the home and the TV set, they will get much less [penetration] than they would like,” said Mr. Stroud.
Movielink will allow the studios to assess consumer interest and behavior in such a product, said T.S. Kelly, director and principal media analyst for Nielsen//NetRatings. “These companies that control content are testing out the models to see what consumers want. They don’t want the same thing to happen with movies as has happened with music.”
When it launches later this year, the service will offer consumers a selection of recently released theatricals as well as library content. Pricing and windows will be set by each studio in an effort to remain pro-competitive with each other, said Mr. Ramo. Meanwhile, the license to distribute films through Movielink is nonexclusive. Studio partner MGM, for example, announced plans last month to test its own online VOD service.