- The Washington Times - Wednesday, January 24, 2001

Coming soon to a PC near you: top-quality movies you can download from the Internet.

That is a vision being promoted by Miramax Pictures, which is allowing people to download "Guinevere," a critically acclaimed art-house film that stars Stephen Rea, one of the principal actors in the Oscar-winning "Crying Game."

The move by Miramax, which has produced or distributed such movies as "Pulp Fiction" and "Shakespeare in Love," is seen as a way to gain a toehold on the Internet and become a player in the swiftly evolving realm of video on demand.

Officials at Disney-owned Miramax acknowledge that the effort is experimental, a means to explore different ways to wring revenue from its film library.

Only a small percentage of homes have the fast Internet connections that could download the movies efficiently. At $3.45 per download, there is no cost advantage over going to a video store.

Viewers would have to watch the movies on their computer monitors or connect their PCs to their televisions via a video cable.

"This is purely experimental in terms of technology and consumer interest," Miramax spokesman Matthew Hiltzik says, "but to come up with another avenue of distribution can only be beneficial."

Miramax's move is only the latest in a stream of developments in the swiftly evolving world of video on demand.

Blockbuster Video is in the midst of rolling out an Internet service to allow PC users with DSL connections to tap into its vast video library.

Satellite TV companies such as DirecTV are preparing to sell set-top boxes that allow people to store movies that have been beamed to their rooftop dishes.

Cable television operators in about 20 markets also have launched systems that allow viewers to order movies instantly and manipulate them just like videos, complete with pause and rewind capabilities.

The trend toward movies over the Internet is both a threat and an opportunity for cable companies. On the one hand, it eventually could cut into a company's business of pay-per-view movies. On the other hand, it also could encourage customers to sign up for high-speed cable modem service.

Some cable companies are testing video on demand in certain markets. Analysts say the Miramax deal will start small but eventually could have moneymaking potential and even spread to other studios.

"This is not a big deal right now," says Gerry Kaufhold, an analyst with Cahners In-Stat Group in Scottsdale, Ariz., "but companies like Miramax are saying if they can deliver their movies over the Internet, they can wind up with another source of revenue."

Movies over the Internet are nothing new. Some Web sites have been offering streaming video downloads for several years, but their offerings are generally grade-B, straight-to-video material. Streaming video also is plagued by poor image quality, even over high-speed connections.

Miramax, by contrast, appears to be the first to offer high-quality films. The company declines to reveal the 11 other titles it will release this year.

Miramax is using technology developed by SightSound Technologies, a Pennsylvania company that develops Internet video technology and also sells movie downloads. Rather than using streaming technology, SightSound sends out the movies in a single download, usually between 400 and 500 megabits.

The download takes about 30 minutes via an ultrafast connection such as cable modem. The file is stored on the computer's hard disk and can be played back at near-DVD quality, company spokeswoman Jennifer Pesci says.

SightSound's encryption technology prevents the movie files from being transferred for viewing on other computers. It can limit the length of time the movie can be viewed. "Guinevere," for instance, can be played only for 24 hours after it's downloaded. In essence, it's a one-day video rental.

James Penhune, an analyst with the Yankee Group in Boston, says it's unlikely many people will rush to download Miramax's first offering.

"I don't think a movie like 'Guinevere' is going to drive millions of hits to their Web site," Mr. Penhune says. "It's not like they are distributing 'Pulp Fiction.' They're testing the waters, but not with their most valuable content."

He also questions how many people would pay to download any kind of movie over the Internet. "At 30 minutes, it's faster to go to the video store," he says.


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