January 20, 2004 7:10 PM PST

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America Online plans to launch a promotion Thursday that will let its members download full-feature films through Movielink for 99 cents a title, company representatives said Tuesday.

The service is essentially meant to enable people to rent downloaded movies. Once downloading is complete, viewers have 30 days to watch the film and 24 hours to complete it, once viewing begins. Titles offered for download include Hollywood hits such as "Pirates of the Caribbean: The Curse of the Black Pearl."

AOL is betting on digital media as a way to persuade people to pay an additional $14.95 per month for its service on top of their existing broadband bill. AOL has been marketing its broadband service in hopes of stemming the defection of members from its dial-up service, which has witnessed heavy losses over the past year.

"For us, it's a great opportunity to bring in new potential customers," said Jim Ramo, chief executive of Movielink. "This is our first promotion with a major portal, and we'd like to do it with all the major portals," he added.

Movielink has already partnered with other broadband providers to offer movie download promotions. Its partners include BellSouth, Time Warner Cable and SBC Communications.

In the third quarter of 2003, AOL lost 688,000 dial-up customers, most of whom were paying $23.90 a month for service. That's down from second-quarter dial-up losses of 846,000 members. However, AOL reported 2.6 million "broadband" subscribers, many of whom subscribe to AOL's $14.95-a-month plan.

Internet companies are aiming to fuel demand for subscription video services, a market that's expected to grow from about $991 million in 2003 to more than $4.5 billion in 2007, according to recent research from In-Stat/MDR.

The promotion will last until Feb. 26, and the companies do not have specific plans to extend it beyond that date.

Movielink is a joint venture of Universal Studios, Paramount Pictures, Metro-Goldwyn-Mayer Studios, Sony Pictures Entertainment and Warner Bros.

In separate news, Movielink plans to announce a partnership Wednesday with Ball State University to form a research lab within the school's Center for Media Design. The lab will be charged with studying the online habits of college students regarding films and piracy.

 

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