Copyright 2005 Reed Elsevier Inc.
Daily Variety
November 21, 2005, Monday
By Ben Fritz
From LexisNexis

Three years after its launch, Movielink has added the final, elusive major studio to its video-on-demand library.

With Fox signed on, Movielink is the only Internet video-on-demand provider with content from every big studio. It has the advantage of being owned by five of them --- Paramount, Sony, MGM, Universal and Warner.

Though Fox is known to be the most conservative studio when it comes to antipiracy protection, the delay with Movielink was caused mainly by business negotiations. The studio signed with Movielink's main competitor, CinemaNow, which uses similar antipiracy technology, two years ago.

"Movielink is a shelf we think we should participate in, but we had some business terms to work though," said Peter Levinsohn, Fox's worldwide pay television and digital media prexy. "This isn't about the money right now, but developing a legitimate marketplace." As with other studios, Fox will offer recent pics, such as Robots and Fantastic Four, when they are in the pay-per-view window, as well as library titles.

Movielink had more than 1,200 films before this latest pact.

Netco is now missing only pics from several indies and midsized studios, most notably New Line, which doesn't provide its content online.

The deal comes as Movielink is looking to expand its business beyond short-term rentals for viewing on computers. It's testing a service in which users pay $9 to download a movie and permanently own it.

While it currently sells only indie pics, Movielink could expand that to major studio content. Levinsohn said he would be interested in so-called electronic sell-through, which could eventually replace DVDs as consumers play movies throughout their home off of a hard drive.

With more content to offer, Netco also is hoping to establish itself as an alternative to DVD rentals and pay-per-view as more devices hit the market, from new TiVo boxes to the Xbox 360 to media center PCs that let consumers watch Internet content on a TV.

"I think 2006 could be a watershed year for televisions getting connected to broadband, which is a necessary condition for Movielink to become a mass-market service," said CEO Jim Ramo.