August 8, 2001 2:10 PM PDT

MovieFlix to charge for online films

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Online film provider MovieFlix on Monday will launch a paid subscription service in an effort to capitalize on a market that has yet to fully mature.

The subscription service, dubbed MovieFlix Plus, will offer members who pay $4.95 per month access to exclusive features, including online movie screenings, personalized movie recommendations, celebrity and filmmaker interviews, and 500 exclusive titles, according to Hollywood, Calif.-based MovieFlix.

MovieFlix said it also will provide filmmakers a portion of its revenue derived from the subscription service. The company said the percentage will be based on the most widely viewed films.

The move comes as online film companies are beefing up their efforts to attract eyeballs to their sites; the market for online film distribution still remains in its infancy. On Tuesday, Lions Gate Entertainment spinoff CinemaNow revamped its Web site with a custom version of Microsoft's Windows Media Player.

As online film companies fight for consumer attention and funding, however, analysts say success stories won't come easily.

"The key in surviving in this space is providing compelling content," said Jarvis Mak, an analyst at Nielsen/NetRatings. "It's the key with all online content providers."

Mak said most of the online film companies, such as CinemaNow and MovieFlix, provide only second-tier film releases, not recent major film studio releases. He said the major film studios have yet to ink deals with any of the dot-coms because they need to protect their distribution channels.

MovieFlix, however, is betting that its paid subscription service will provide the company with an additional source of funding to complement its current stream of revenue, which is online syndication.

Founded in 1998, MovieFlix has forged alliances with companies including AOL Time Warner, iFilm, NBC Internet, RealNetworks, Yahoo and TV Guide. The company boasts 2,200 titles in a variety of genres in its online film library.

While the company is gearing up to launch its subscription service, which has been available in beta for the past couple of weeks, it will also keep its free service.

Robert Moskovits, co-founder and director of business development, said MovieFlix decided to launch the service because the "timing was right," and for the company to continue offering content to its audience, it needed to make money to break even in the first quarter of next year.

"On the Internet there's almost a writ, like an amendment in the constitution, that stuff will be free," Moskovits said. But "we're hoping that (consumers) will understand that this is a business."

Moskovits admits that watching films on a computer screen has not hit critical mass, and Internet Protocol-based video-on-demand is not yet here because not enough people have high-speed Internet connections. However, he said, the quality is getting better, and the company is positioning itself so that once broadband does become widely used, MovieFlix will be there when it happens.

Video-on-demand "is not like turning on the TV; it's kind of an experience in and of itself," Moskovits said. "Certainly the content isn't really compelling enough yet, but it's coming along really nicely...It's where everyone is going. I just don't know how long it'll take to get there."

See more CNET content tagged:
subscription service, film company, CinemaNow, film, VoD

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