April 29, 2003 11:58 AM PDT

Lights go up on CinemaNow-MGM deal

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CinemaNow, a service providing downloadable digital video, is licensing films from MGM Home Entertainment, its latest major Hollywood studio partner.

Under the agreement, CinemaNow, based in Marina Del Rey, Calif., will offer first-run and vintage films from the Hollywood studio via digital streams or in download format over the Internet. The companies say that the agreement validates a trial between them from February 2002. MGM is the second of five major Hollywood studios that back rival video-on-demand service Movielink to sign a distribution deal with CinemaNow.

Financial terms were not disclosed.

The partnership, announced Tuesday, comes on the heels of CinemaNow's licensing deal this month with Twentieth Century Fox Film, the studio's first Internet distribution deal. It also signals greater willingness by the movie studios to license their films for delivery on Internet Protocol (IP) networks, a proposition that has long terrified Hollywood because of the threat and ease of Net piracy. Improved security and video-playback technology have helped mitigate some concerns.

"The past six months have brought much more widespread adoption of broadband access, a remarkable increase in consumer demand for fee-based premier Web content, and significant momentum for our company," CinemaNow CEO Curt Marvis said in a statement.

CinemaNow allows Web surfers to rent, download and watch full-length feature films on their PCs. Its film library contains more than 3,000 feature films from 100 licensers, including Warner Bros. and Lions Gate Entertainment. MGM and Warner Bros. are investors in Movielink along with three other major film studios.

CinemaNow delivers digital videos to PCs using a proprietary video-on-demand technology called PatchBay, which includes digital and territorial rights protection. It also uses Microsoft's Windows Media 9 Series format to encode and play the films. MGM will make new-release films such as "Barbershop," starring Ice Cube, available via CinemaNow on the same day as their debut on traditional pay-per-view channels.

 

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