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Warner to Offer Movies Online

Entertainment: Deal with CinemaNow will make selected titles available for downloading.


In what appears to be a first for a major Hollywood studio, Warner Bros. is making a few dozen of its movies available for downloading through an online video-on-demand service.

The studio is expected to announce a deal today with CinemaNow of Marina del Rey to make selected new releases and older titles available for downloading on a temporary basis. The downloads will come with electronic locks designed to provide 24 hours of unlimited playback while also deterring users from copying or redistributing the files.

The deal is the second by Warner Bros. to offer downloadable movies, but it is the first to make films available.

In August 2001, Warner Bros. joined four other major Hollywood studios in a venture to provide downloadable movies, dubbed Movielink, but the long-delayed service is not expected to launch until late this year.

Warner Bros. already is providing movies online through Intertainer, a video-on-demand service that works with certain high-speed Internet connections. But Intertainer does not provide downloads. Instead, it streams videos, requiring users to stay online while they watch.

Jeffrey Calman, executive vice president of video on demand and pay per view for Warner Home Video, said a key factor in the deal was CinemaNow's anti-piracy technology, which is supplied by Microsoft Corp.

"As we would with any entrant into the area, we investigated their technology and found it to meet our digital rights management requirements and reached reasonable economic terms," Calman said.

Neither Calman nor CinemaNow would disclose financial terms of the deal, which runs through the end of this year.

Curt Marvis, CinemaNow's chief executive, said his company will have access to any movie that Warner Bros. has the right to offer through the public Internet, including one of its biggest hits, "Harry Potter and the Sorcerer's Stone." CinemaNow plans to offer new releases for $3.99 and older titles, such as "Dial M for Murder" and "Mars Attacks," for $2.99.

The company made a trial run this year with Metro-Goldwyn-Mayer Inc., but that deal was limited to two movies.

"We anticipate having more studios in the near future that are going to be willing to give us content," Marvis said. "I think everyone's still trying to figure out the proper business models that will work in this whole area."

In addition to piracy, picture quality has been a major concern for studios. The Warner Bros. downloads on CinemaNow will at least match the image quality of videotape, Marvis said, but as a consequence, the files will be quite large--400 megabytes to 500 MB. For a home with the typical high-speed Internet connection, that means up to two hours spent downloading the file.

In a separate video-on-demand development, Movielink is expected to announce today that it has chosen IBM Corp. as a key technology supplier. IBM will manage the computers that store and deliver the studios' movies through the Internet.

Movielink officials said they are counting on IBM, which runs some of the world's largest Web sites, to help ensure the reliability and security of its service.

In addition to Warner Bros. and MGM, Movielink is owned by Viacom Inc., Sony Corp. and Vivendi Universal.

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