CinemaNow debuts download-to-own movies

By Stefanie Olsen
Staff Writer, CNET News.com Published: January 15, 2004 11:29 AM PST

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CinemaNow, an online movie rental company, is testing new waters by launching a service that lets people buy permanent downloads of Hollywood films for a PC.

As part of a Web site overhaul, the company added on Thursday several features to its digital movie service for PCs. It introduced a download-to-own feature, or what's called "digital sell-through," which lets people buy and download a permanent copy of a film for unlimited playback.

"Allowing users to download and own DVD-quality versions of video content is the next great frontier in digital distribution," CinemaNow CEO Curt Marvis said in a statement.

Customers can also choose to subscribe to a monthly service or watch movies on a pay-per-view basis.

CinemaNow and rival Movielink, a Hollywood-backed venture, face hurdles when it comes to drawing customers. One is that people are accustomed to watching feature films on a big screen--not on a PC display. Broadband adoption and advances in technology have improved prospects for the online movie business, but it is still at a disadvantage.

By exploring a range of service models, CinemaNow should be able to gauge consumer demand for new distribution methods and potentially change viewers' habits. The company provides a legal alternative to downloading pirated DVDs--a source of mounting concern for CinemaNow's Hollywood studio partners.

"Will this change the economics of Hollywood? Absolutely not," said Steve Vonder Haar, an analyst at Interactive Media Strategies, an Arlington, Texas-based market research firm. "But it helps the technology and entertainment sector begin to learn a little bit more about what content models are doable and appealing to consumers over the long haul," he said.

As part of its site changes, CinemaNow introduced progressive download capabilities for broadband customers. These are designed to let people begin watching a newly rented movie within 30 seconds of the start of the download. The technology also lets people view films when they're not connected to the Internet.

CinemaNow's store of download-to-own films--which includes the surf documentary "Endless Summer"--is protected by Microsoft's Windows Media digital rights management software, according to the Marina Del Rey, Calif.-based company. People with Windows XP Media Center can watch CinemaNow downloaded movies on a television set; and in the second half of 2004, they will be able to view them on a compatible portable device with Microsoft's upcoming Portable Media Centers, via USB 2.0.