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Movielink 'soft launch' could usher in VOD competition for cable

Sun, 11/10/2002 - 7:00pm
Jeff Baumgartner

Movielink LLC pushed forward today with the "soft launch" of its highly-anticipated, broadband-friendly Internet video-on-demand service today, initially rolling out to a limited number of customers whose feedback will be used to refine the service.

The Movielink service initially features titles from its suppliers and backers, including studios such as MGM, Paramount, Sony Pictures, Universal Studios and Warner Bros..

The site allows users to download a selection of major motion pictures for rental viewing. Movielink, during the early going, is featuring a mix of 170 new and "classic" titles, including A Beautiful Mind, Harry Potter and the Sorcerer's Stone, Ocean's Eleven, Jerry Maguire and Blue Velvet. More recent hits are priced at $4.95, while older films such as The Hunt for Red October carry a rental fee of $1.99, according to the site. Movielink is also making film trailers, movie clips and still photographs available for free to other site visitors.

Full-length movies are available for download and eventual play to Movielink's soft launch customers. Once downloaded, each title is "valid" for up to 30 days, and customers will have 24 hours to view the film once play is initiated. The company has inked playback compatibility deals with both RealNetworks Inc., maker of RealPlayer 8.0, and Microsoft Corp., which makes the Windows Media Player.

"With more than 25 million broadband residences, we believe the market is now ready for the launch of a new Internet movie rental service," Movielink CEO Jim Ramo said, in a press release.

It's not known, though, if broadband is ready for Movielink, as the service could be considered both a friend and foe to cable operators and telcos.

It could be considered a friend because it could drive cable modem and digital subscriber line subscriptions and perhaps mark the "killer app" broadband has been seeking. On the other hand, it could easily circumvent the typical cable operator/studio relationship and sap cable pay-per-view and VOD revenue.

A service like Movielink could also drive up operator network costs. Movielink estimates the average file size at 500 megabytes. If usage grows to lofty levels, it could push cable operators even further away from their current high-speed flat billing model, and expedite a move toward a "byte-cap" model based on usage.

Many cable operators are presently discussing the concept of consumption-based cable modem services. One, GCI Communications, is offering such a service via its broadband network in Alaska.

Although it's not known if an Internet VOD will attract a large user base, at least one of Movielink's competitors is out of the way…for now. Intertainer, a broadband content service that streams TV shows and full-length feature films, shut down its site temporarily in October while the company attempts to iron out a "fair business model" with movie studios that are subject of an Intertainer-led antitrust lawsuit.

Of the studios named in the suit, two are involved with Movieline: Sony and Universal. Intertainer also named AOL Time Warner Inc. in the lawsuit, which, among other things, accuses the studios of conspiring to fix prices.

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