Sony to sell movies online

Will Smith and Eva Mendes star in the Sony film 'Hitch'. Picture / Reuters

LONDON - Movie mogul Sam Goldwyn once remarked: "I don't care if it doesn't make a nickel. I just want every man, woman and child in America to see it."

Unfortunately for Hollywood, the former glove salesman's altruistic wish has been on the verge of coming painfully true for Tinseltown's big studios. It is estimated that file swappers who exchange up to 600,000 movies every day on the internet, are threatening to choke off the industry's annual US$17.5bn from DVD sales as well as carving a large slice off its earnings from new releases.

After the record companies were forced to accept the downloading of music on the internet, many were saying it was only a matter of time before Hollywood was forced to bow to the inevitable.

This accommodation comes a significant step closer this week after the Sony Corporation announced that it was planning to do for downloading films over the internet what iTunes has done for music.

Michael Arrieta, the senior vice president of Sony Pictures told the Digital Hollywood conference in the US that the company wants to develop a digital download service for films and hopes to make its top 500 films available over the internet in the next year.

The company's huge catalogue, which ranges from classics such as Lawrence of Arabia and Dr Strangelove to the current, top-grossing Hitch, contains more than 2500 titles. According to Mr Arrieta, Sony wants to start seeing how it can exploit this immense resource while playing the file sharers at their own game.

"We want to set business models, pricing models, distribution models like [Apple chief Steve] Jobs did for music, but for the film industry," he said. It also plans to make the films viewable on mobile phones.

While there has been an explosion in music download sites, from Apple's iTunes to Napster, the film industry has been slow to adopt the new technology.

Last month Microsoft warned film makers that they faced a repeat of the painful experience of the music industry unless they adapted. Television networks are also facing the dilemma with top-rated programmes such as Kiefer Sutherland's 24 available worldwide on the internet free of charge just a few hours after transmission.

The growth of internet piracy of film and television shows is made possible by rapid file sharing technology such as BitTorrent and the rise of broadband internet access. Downloading the massive film files can now be done in just a couple of hours. Such is the concern that the Motion Picture Association of America has started a campaign of legal action against the unauthorised sites, whose architects argue that copyright infringement was never their aim.

At present there are only a handful of official film download sites, including Movielink, a partnership between Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros.

In France, the popular music and electronic internet store Fnac provides full feature film downloads, but at a price - digital quality costs about eight euros and DVD quality is around 13 euros. Other film download sites include Movie Flix, Like Television and Cinema Now.

Shelley Taylor, who has produced a major study of digital download sites, believes the film industry must adapt quickly and imaginatively to combat piracy.

In the short term, however, she is doubtful that film downloads will replace DVDs.

"I don't think it's going to replace DVDs, just like music downloading hasn't replaced CDs. People have a lot more control with a physical item they can carry around with them," Ms Taylor said.

There are three main ways in which consumers can pay for film downloads - buying a permanent file, paying a subscription fee, or by pay-per-view. One of the problems identified in Ms Taylor's report, Click Here Commerce, is that at present no single website offers more than one payment option.

Like iTunes, Sony's existing music download site only works with compatible devices - a strategy Ms Taylor believes is mistaken.

"Where Sony continues to misjudge consumers - and iTunes and others as well - is in the area of format handcuffs. Though there may be many short-term advantages to locking customers into particular devices, customers will eventually revolt against this business strategy as they want personal control over their purchases," she said.

- INDEPENDENT