January 20, 2004 11:20 AM PST

AtomFilms debuts full-screen video

AtomShockwave's AtomFilms began reeling short films in high-definition format Tuesday, in one of the industry's first demonstrations of the technology online.

AtomFilms, a hub for independent films and animations, launched "AtomFilms Hi-Def," an advertising-supported service that lets people watch full-screen Internet video in high-definition Windows Media 720p format.

To deliver the service, AtomFilms teamed with technology provider Maven Networks, which provides the software infrastructure to help manage content, produce and deliver the video. It also embeds a system to sell related products and deliver advertising and marketing programs.

"We are at a crossroads in the evolution of digital entertainment," AtomFilms founder Mika Salmi said. This "represents a giant leap forward, for audiences and advertisers alike."

The new service comes at a time when Internet users are hungrier than ever for broadband content--but are still put off by having to pay for it. According to research, more than 20 million U.S. Internet users have high-speed Internet connections that give them the ability to enjoy music and video online with relative ease. Subscription and downloadable music services have proliferated in recent years, but few paid video services, with the exception of RealNetworks' RealOne, have caught on with more than a million people. As a result, Internet operators are struggling to meet consumer demand for content while developing a business model that works.

"People now want to look at video on their PC, but one of the complaints is that they want to look at it in full-screen (mode), and you can't get it," said Gerry Kaufhold, principal analyst at In-Stat/MDR, a research firm in Scottsdale, Ariz.

Maven is helping AtomFilms and others do that and is "wrapping a business model around it that gets them paid," Kaufhold said.

Virgin Records, National Geographic and Fox have all used Maven's technology to promote video content online.

AtomFilms is supporting the service with advertising. Game company Nintendo and Microsoft are two of its first major advertisers. Maven's technology lets advertisers track visitors and ensures that they watch the commercials; ads play before each film and cannot be skipped.

To use the service, people must download a small application. Then, they will receive a weekly desktop delivery of three AtomFilms movies. These films are delivered at a speed of 850 kilobits per second, which rivals the quality of DVDs. Customers can receive two films each month that are viewable at almost three times the resolution of DVD video in Windows Media high-definition video (WMV HD), at 720-pixel resolution.

But the service is available only for users of Windows XP-based machines. Another pitfall of the Maven technology is that it requires a 500MHz or faster processor with a graphics card set at 1,024-by-768 minimum resolution.

"AtomFilms is a pioneer in using WMV HD to enable the first online delivery of HD short-film content to consumers," Dave Fester, general manager of Microsoft's Windows Digital Media Division, said in a statement. "The quality of WMV HD means movie fans get a great experience, and the compression efficiency of WMV HD makes it the most cost-effective way of delivering HD content online."

The Sundance Film Festival is featuring AtomFilms Hi-Def this week. The company said that while testing the service in December, it drew about 10,000 users.

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