Studios pursue plans to rent and sell movies directly over the internet

In an interesting move to stay on the cutting edge of technology while protecting the bottom line, some Hollywood studios are planning to pre-empt piracy by selling movies themselves directly to consumers over the Internet.

Sony is currently preparing a site for downloading movies to PCs starting next year. According to the Wall Street Journal, Sony is in advanced talks with several studios, including Warner Brothers, and Walt Disney Co. has a tentative agreement with 20th Century Fox, and is also holding discussions with Paramount Pictures to provide movies to PCs.

While the technology is still being refined and security is always a concern, this could signal the beginning of the transition in the way Hollywood delivers films to consumers. That consumers will be able to cut down or even eliminate trips to the video store can only have a profound effect on the way consumers rent or even purchase movies over the next half decade.

At the same time that cable and satellite providers are introducing new forms of television that allow consumers to shop, bank, chat, search the Internet, watch movies and TV shows, the studios are looking to stymie online file-sharing operations–like Napster in the music business–from undermining copyright protection in the movie industry. Underscoring the threat to studios, pirates are estimated to be downloading 270,000 films a day from the Internet via illegal file-swapping services.

While Sony is seeking studio partners to offer a wider selection of first-run movies for users to download for their personal libraries, Fox and Disney are exploring video-streaming for one-time viewing, a system similar to pay-per-view now offered by satellite and cable providers. Other major studios are exploring all options.

The studios have been forced to formalize their home-delivery futures as cable operators have increased pressure on the studios to sign video-on-demand deals. These developments could derail the cable industry’s plans for video-on-demand, which is designed to replace pay-per-view.

What does this mean for DVD? Anything is speculation, of course, but while there’s much to be said for the idea of some future database that holds all of the world’s films to be viewed on demand, those of us who enjoy collecting films know–can I say this without sounding too materialistic?–the sweet joy of possession. Holding the package in our hands is a pleasure for many of us, and you can’t download the included liner notes and many extras that DVD has to offer. And with many major studios making such a huge committment to DVD lately, it’s doubtful we’ll see DVD suddenly left in the cold. Quite the contrary, in fact. Co-existence is fine with us, and with the rate of growth of DVD lately, the format is likely here to stay for quite some time…

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