Coming Soon to a TV Near You

It's the Holy Grail of the movie download business. Movies straight from the Internet to your TV, none of that watching the flick in your straight-back chair while peering at your computer monitor. Now, for those who want to watch movies the way they should be enjoyed—that is, while curled up on your couch—comes the first downloadable movie that can be burned onto a DVD. On July 19, CinemaNow, a movie download site backed by independent film studio Lionsgate Entertainment (LGF), Microsoft (MSN), Blockbuster (BBI), and others, announced it will be the first to provide that service.

But don't warm up your Barcalounger just yet. CinemaNow is starting by offering 100 or so flicks for download, with such headliners as MGM's Barbershop, Sony's (SNE) Charlie's Angels: Full Throttle, and others. Newer films aren't yet available, despite software provided by German digital-rights management company ACE GmbH that CinemaNow says is secure. The German software was secure enough to win over some of Hollywood's leading studios, including Disney (DIS), Universal, and Sony, but not others like Warner Brothers, Fox, and Paramount. And even those who signed on seemed leery of tempting pirates with their newer—and more lucrative—DVDs for what is essentially a beta test. One studio, Universal (GE), yanked its film King Kong at the last minute.

Still, this is the wave of the future, according to Benjamin Feingold, president of Sony's Columbia TriStar Home Entertainment. "If you fast-forward a number of years, consumers will be embracing the concept of being able to download their own movie, be it at home or in a retail store." That, he says, will help generate hefty revenues for films into the future, even as physical DVD sales begin to slow. This year, according to PricewaterhouseCoopers, consumers will spend $17.3 billion on DVD or video cassettes, a 3.6% hike from 2005 but far from the double-digit growth rate of the early '90s. "We see this as a way to get a whole new generation of movie users to buy DVDs," says Rick Finkelstein, Universal Pictures' vice-chairman. "Computer users now have a way to buy movies, and do it legally."

The CinemaNow offering is far from the final product that studios want. But it does have one key ingredient. "It gets movies onto the TV set where people want to see them," says CinemaNow CEO Curt Marvis, who notes the movie downloads will still take as much as three hours, even with the fastest broadband wires. The compressed movies will contain all the bells and whistles of a DVD, including directors' comments and cuts, and will even allow for printing of jewel box covers with images provided for the DVDs. The movies, he says, will be playable in just about all but the oldest DVD players and other consumer electronic devices.

Source ZeroPaid