Movielink, IBM Hook Up on Site Hosting

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 site, according to
Movielink spokesperson Corey Weiss. But he won’t say who in deference to the
competitive nature of the business.

“IBM was the best match for our needs,” Weiss told

Movielink will use the Internet as a distribution channel, relying on
broadband to pipe films to customers’ PCs. Eventually, it will feed other

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. 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
, 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 “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

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