March 24, 2006

First Ones Into the Pool [8:11 am]

Universal to Try Film Download Service [pdf]

Universal Pictures plans to allow British movie fans to download “King Kong” and other big-name Hollywood movies in a service that offers a glimpse of the future of online entertainment.

As part of the deal with Lovefilm, the European equivalent of online movie rental service Netflix Inc., customers will be able to download permanent digital copies of films to watch on their computers and certain portable media devices. They also will receive a DVD copy in the mail.

[...] Although limited to a single studio and 35 titles, the service marks a turning point for Hollywood, which has been reluctant to sell permanent downloads of major films for fear of contributing to Internet piracy or cannibalizing DVD sales.

“This is a no-brainer,” said Josh Bernoff, an analyst with Forrester Research in Cambridge, Mass. “Every studio really should be doing this in every geography.”

The download-to-own experiment could help determine whether consumers will pay a premium for the convenience of getting movies in multiple formats. Universal’s service costs about $34.72 per movie, compared with $24.30 for a regular DVD.

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