Movielink, IBM Hook Up on Site Hosting
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After much speculation and debate about its status, Movielink proved it's still committed to delivering movies to film fans over the Internet Monday by shoring up its technology infrastructure.
Santa Monica, Calif.'s Movielink is the online rental service formed and fueled by five major movie studios, including Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal and Warner Bros. The lucky winner to power Movielink's flicks to computer screens? Armonk, N.Y.'s own IBM.
Financial terms of the deal were not made public, but Big Blue will provide Movielink with managed hosting services, including systems operations and network management. IBM will also lend technical counsel and deliver computing resources on-demand from its U.S. data centers to support Movielink's operations. The service, slated to make its debut in the next few months after much fanfare, will digitally deliver motion pictures from the studios to broadband Internet users in the U.S.
IBM did beat out other vendors to host the movielink.com site, according to Movielink spokesperson Corey Weiss. But he won't say who in deference to the competitive nature of the business.
Movielink will use the Internet as a distribution channel, relying on broadband to pipe films to customers' PCs. Eventually, it will feed other devices.
For IBM, the contract marks the latest in a series of media and entertainment industry deals. In May, Big Blue agreed to provide technology and consulting for Viacom's digital entertainment services. Butterfly.net tabbed IBM to run its Butterfly Grid for online video gaming.
In some respects, the Movielink venture mirrors online music subscription services, in that major content rights owners (the studios) are dipping its ladles into the Internet technology well, much like the Big 5 recording companies are backing services such as pressplay and MusicNet, among others. There are other commercial movie delivery services, such as Intertainer and CineamNow (in fact, CinemaNow announced it would license films from Warner Bros. on the same day), but the wealth of movie studio clout should make Movielink the frontrunner when it reaches fruition.
While the entertainment industry's desire to penetrate Web-savvy market segments is admirable, doubts remain as to the security of Web-based content delivery, with digital piracy concerns lurking at every step. But Movielink is optimistic on that score: "We believe human nature is not predisposed towards piracy," Warner Brothers' Chairman and CEO Barry Meyer said in a statement to the press. "By proactively offering a convenient, affordable, high-quality source of content, the film industry can meet the needs of the public while successfully protecting our intellectual property as we move further into the digital millennium."
Steve Vonder Haar, lead analyst and founder of Interactive Media Strategies, isn't so sure that piracy is the main barrier to consumer embrace for online movie rentals. Vonder Haar isn't convinced that folks will want to watch movies en masse on their PCs. To that end, he suspects Movielink will have a tough time gaining traction.
"People don't think of the PC as an entertainment tool," Vonder Haar told internetnews.com. "It's a productivity tool."
Vonder Haar isn't saying that Movielink's efforts will surely fail, but that it needs to prove that it can sustain itself on the PC with good market development. This includes establishing digital rights management software to lock up movies from would-be pirates. It also includes bringing the films off of the PCs and piping them to wireless devices such as handhelds and through set-top boxes for delivery over television.
"Maybe then you can lay the groundwork for delivering this content to consumers -- say, 5 years from now," Vonder Haar said.
Of course, this is dependent on the ubiquity of broadband pipes being hooked up to set-top boxes and high-speed wireless networks. No small feats, indeed. Prognosis?
"Little chance of success in the current market environment," the analyst said. "But, these are the investments you make over the long haul [if the big movie studios are serious about entrenching themselves in the digital realm]."