July 24, 2006 4:32 PM PDT

Amazon goes to the movies

Apple Computer has all but cornered digital music, so Amazon.com has set its sights on video downloads.

Next month, the online retailer is planning to launch Amazon Digital Video, a service that will deliver full-length feature films and TV shows to customers over the Web, according to a source with knowledge of the offering.

The source confirmed a story that appeared in Sunday's edition of Advertising Age. The trade publication reported that Seattle-based Amazon will make downloads available in two ways. One is through a subscription service, where customers pay a flat fee to view movies over a certain time period. The other will be either a pay-per-view or a pay-per-movie service.

Amazon's download site was supposed to be a music-centric site a year ago, when executives began designing the service, but the e-tailer is concentrating on video because of the enormous control over digital music that Apple holds.

An Amazon representative declined to comment.

When it came to the Internet, Amazon was once synonymous with books, music and videos. Then came Apple and the rise of digital downloads. Although most people still prefer to buy CDs, more and more are choosing not to wait days to receive an album in the mail when they can start listening to their music just seconds after downloading it from the Web.

Apple also has a head start in video. Last October, the company began offering TV shows, such as "Lost" and "Desperate Housewives," and has now sold more than 35 million video downloads. Several media outlets have reported that Apple is preparing to add feature films to its offerings.

Studios and TV networks have lately been handing their content to a variety of Web sites. Warner Bros. Entertainment Group has cut distribution deals in recent months with video-sharing site Guba and file-sharing system BitTorrent. Sony Pictures also has signed a pact with San Francisco-based Guba.

Amazon is a far more attractive partner than many of the other companies offering video on demand, said one network executive, who asked to remain anonymous.

Amazon is a household name and is already recognized as a major Internet music hub. The company, founded by CEO Jeff Bezos, has been introducing consumers to Internet shopping for a decade, said the executive. That's appealing to entertainment executives who have watched technology hurdles turn consumers off to movie downloads.

Amazon is in a position to help shoppers warm to the idea of digital movies, said the executive.

"My mother shops at Amazon," the executive said. "They know how to sell music online already."

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Amazon.com Inc., online retailer, Apple Computer, digital music, retailer

 

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