CANNES, France — Certain that many consumers will be downloading movies from the Internet within a year or two, executives of online firms are for the first time scouring the film market here for movie rights and for partnerships with companies that control film libraries.
Their presence, along with some recently announced deals, is sparking a widespread recognition among movie industry leaders that a vast change in the methods of distribution is coming much sooner than they expected.
"There is a potent cocktail of fear and greed that is driving these guys right now," said Scott Sander, president of Sightsound.com, one of several Internet companies here with a business model that encompasses distribution of full-length motion pictures. "What we thought was happening in 2002 is happening right away."
Michael Metcalfe, chairman of Global Media Corp., said he attended the festival last year just to educate himself about the movie business and couldn't get anyone to meet with him. This year, he said, "it's a gold rush."
Some movie industry executives still believe it may take five years or more to solve the many legal, technical and practical problems with video on demand over the Internet. Movie and Internet companies alike have been surprised over the last six months by the advances in software compression technology and access to faster online connections that make movie downloading a more immediate prospect for many consumers.
Initially, such films will be viewed on computer screens--a prospect that may be unsatisfactory for most movie fans. But the transition to viewing on a television set isn't expected to take long.
Even the most skeptical movie executives have come to believe that a fundamental economic restructuring of the business is within sight. They say the next big flow of cash to pull the movie business out of its doldrums will come from the Internet through direct distribution of movies.
The change is likely to have little impact on the theatrical release of movies, but it could dramatically change the video rental, pay television and free television markets for film. "Everybody in the business is talking about it," said John Miller, managing director of Chase Securities and perhaps the most powerful banker in the movie business. "We're on the threshold, and the potential revenues are mind-boggling."
