Hollywood studios offer net videos

Five of Hollywood's biggest film studios are launching a video on-demand service for internet users in the US.

MGM, Paramount, Sony Pictures, Vivendi Universal and Warner Bros hope the move will outflank net pirates threatening the film industry.

The studios are planning to use the Sony system Moviefly which will allow broadband internet users to download movies onto their personal computers.

The films will be viewable by both Microsoft and Real Networks' media players.

Threat

Of the major Hollywood studios, only Disney, 20th Century Fox and Dream Works are not participating in the venture.

The studios have been working on the project in anticipation of facing a threat similar to that posed by MP3 files to the music industry.

Security experts estimate that up to 400,000 bootlegged films are already swapped daily on the Internet.

The system will require broadband internet access - which some commentators say is still not widely enough distributed to support an on-demand digital distribution channel.

"Broadband penetration is still low and it's rather expensive to deliver a film over the Web," said Matt Bailey, analyst with Webnoize.

"The economics will make it difficult to turn a profit, but eventually costs will go down."

'Subsidy'

Yair Landau, president of Sony Pictures Digital Enetertainment, said that the project would proceed nonetheless.

"We are initially subsidizing the development of this market - we're not waiting," he said.

But some say that the joint venture by the five major studios could raise anti-trust concerns - especially as the US Justice Department is already looking at the joint internet ventures planned by the big music companies.

Mr Landau has dismissed the concern.

"We're creating a market, not combating something.

"We're offering an honest alternative and I think Washington will recognize that," he said.

Mr Landau said the venture will price films competitively, at between $3 (£2) and $5 (£3.50) per movie.

But, according to Sony spokesman Don Levy, the launch of the service is at least several months away.