Movielink: Online Movie Rental Service Backed by Five Major Hollywood Studios

From John Leyden in the Register:

Movielink, a joint venture of Metro-Goldwyn-Mayer, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros, will offer films for download to broadband users in the US. IBM is to providing managed hosting services, including systems operations and network management.

Movielink should launch in Q4 this year. It will use the Internet as a distribution channel, delivering films initially to consumers’ PCs and later also to other Internet-connected devices via a “secure open-access, Internet Protocol based system”.

Terms of the deal aren’t revealed and the technology – particularly to secure the system from crackers and pirates – is opaque. Some kind of DRM set-up can be expected.

In Europe, using broadband to distribute films is an established idea, but in practice, Blockbuster has little to fear – just yet.

The interest in the Movielink deal is that it brings together five major picture studios and a computing giant. This cannot be good news for neighbourhood video stores.

Competition concerns over such a powerful venture prompted the Department of Justice officials to open an investigation into Movielink and Movies.com, which is backed by Walt Disney.

A Movielink spokesman confirmed to Reuters that the Justice Department has conducted a preliminary review but was unable to provide a progress update.