Five major movie studios have begun offering films via the Internet this week through Movielink, Hollywood's most aggressive move yet onto the Web.
The long-awaited service is designed to open a new path for movies into the home, relying on the Internet and digital bits instead of physical media such as videotapes or DVDs.
Its initial lineup of about 175 films will be available only to U.S. consumers with high-speed Internet connections, who will have to watch the films on computers using Microsoft Windows unless they can connect their television sets to their PCs.
Analysts say Movielink faces several hurdles that could take years to overcome, most notably that the vast majority of consumers aren't equipped to watch the service's films on TVs.
"The average movie lover is not going to run out on Monday and try this," said P.J. McNealy of GartnerG2, a technology research and consulting firm.
Spokesmen for Movielink and several of its Hollywood sponsors said they view the first few years as a time for experimentation and discovery, not profit.
A main goal for the studios, they said, is to avoid the fate of the record companies, which didn't make music available through the Internet until after online piracy became rampant. Some observers wonder whether the labels will ever regain control of their businesses.
"We need to start the process and get this service up and running, test it, get feedback, and spend the necessary time to perfect it," said Rick Finkelstein, president and chief operating officer of Universal Pictures, a subsidiary of Vivendi Universal. "You want to be sure that you're there when the demand occurs. Otherwise, there's a risk that the pirates come in and occupy this space."
The five studios behind Movielink - Universal, Sony Corp.'s Sony Pictures Entertainment, AOL Time Warner Inc.'s Warner Bros., Viacom Inc.'s Paramount Pictures and Metro-Goldwyn-Mayer Inc.'s MGM Studios - have each made a five-year commitment to the service, with an eventual investment of more than $100 million, said Yair Landau, president of Sony Pictures Digital Entertainment.
"This service is not so much about what it is today but what it can become," Landau said. A few companies had already tried to deliver movies and other forms of video through the Internet, with limited success.
Digital movie files can take more than an hour to download even with a high-speed connection. And "streamed" movies, which play on a user's computer as they're being transmitted, typically don't offer as clear or steady a picture as a TV set's.
A more serious problem has been the studios' reluctance to let unaffiliated companies offer their movies online. One video-on-demand company, Intertainer Inc., recently sued several studios alleging that they withhold titles and collude to favor Movielink. The Justice Department is examining whether the studios' online practices violate antitrust laws.
Movielink Chief Executive Jim Ramo said the service will offer every movie from the five participating studios that's available for pay-per-view on cable or satellite TV, beginning 45 days after the movies appear in video stores. Initially, about two-thirds of the movies on the service will be older titles, but about 15 new releases will be added per month, he said.
For about the same price as a pay-per-view film - $3 to $5 - users can download movies and keep them for up to 30 days. They lose the movies 24 hours after they start to play them.
Software from RealNetworks Inc. and Microsoft Corp. is designed to prevent the movies from being copied or played on any device other than the computer on which they are downloaded, Ramo said. When anti-piracy technology gets more advanced, he said, Movielink plans to allow customers to burn movies onto DVDs and play them on other devices.
Jon Healey writes for the Los Angeles Times, a Tribune Publishing newspaper.