Disney chairman Michael Eisner and Viacom (parent company of Paramount) chairman Sumner Redstone confirmed that their companies are working together on an Internet-based video-on-demand service.

Eisner and Redstone confirmed during a panel discussion in New York that they, along with a third unnamed company, have been working together to explore ways to send movies securely over the Internet. According to Eisner, the new service would charge a monthly subscription or pay-per-view fee and would bypass the middleman in current movie distribution. No specifics were given on the system, or who precisely would be “bypassed”, other than to say that the system would run through Movies.com.

Cautious DVD enthusiasts who can remember back to 1997, will recall the failed DiVX, which also received a great deal of support from Disney, and Paramount. Now, when both companies are beginning to put out some real quality DVDs, they may be leaning back towards a pay-per-view format.

Be on the lookout for this new pay-per-view format sometime later this year.