Movielink, CinemaNow bring legal video downloads to the US

Chicago (IL) - Movielink and CinemaNow have begun offering movie downloads in DVD quality. While consumers are promised the convenience of having downloads available at the same time a movie is released on DVD, both services are testing the threshold of acceptable digital rights management: Downloads are "competitively" priced with regular DVDs, but come with substantial usage restrictions.

It has been a tough birth, but they finally have arrived: Legal movie downloads for your PC. MovieLink and CinemaNow are both offering not quite the selection you can find on Netflix or your Blockbuster store around the corner, but several hundred titles for purchase or rent on both sites. MovieLink said it has signed agreements with MGM, Paramount, Sony Pictures Entertainment, Twentieth Century Fox, Universal and Warner Bros.; CinemaNow brought Sony Pictures, MGM, and Lionsgate on board.

Both download services count on current movie to attract customers. Pricing is in line with high-end retail pricing of equivalent DVD movie releases. MovieLink charges between $8.99 for older titles such as "Fish Without A Bicycle" and $26.99 for newer content such as "The 40-Year Old Virgin." CinemaNow runs $0.49 and Buy-one-for-$4.95-get-one-free promotions and typically charges $9.95 for somewhat dated movies such as "Bad Boys" and $19.95 for new releases such as "Zathura."

As is the case with all other media download services, there is a slight catch going by the name of "digital rights management" (DRM). Paying a price that is "competitive" with purchasing - and owning - a DVD does not automatically mean users will have the same: According to the terms of use of MovieLink, users "agree and acknowledge that [they] shall not acquire any ownership rights by downloading any Retained Content from the Service."

So, where is the difference of downloading a movie or simply purchasing or renting DVD? First and foremost, the movies downloaded create some hurdles to actually playback the movies not just on a PC, but on a secondary device or a TV. CinemaNow's content is simply not intended to be moved around in a home and requires the users to hook up a notebook (at least if the content is downloaded to a notebook) to a TV via an S-video cable. Movies cannot be streamed to other devices such as a PSP, transferred to an iPod or burned to a DVD.

The extra money users spend for a DVD on MovieLink buys a bit more freedom. Movies can be viewed on up to three PCs (one of them ideally a Media Center PC or an Entertainment Center PC connected to a TV) and streamed within a house to devices such as a PSP or an Xbox. Users can also burn the movie on a DVD in the same format as the movie was downloaded in, which happens to be Windows Media. Such a backup DVD can not be played by regular DVD players, according to MovieLink's terms of use.

CinemaNow's frequently asked questions section indicates that there may be a future option to playback downloaded movies on DVD players sometime in the future. For users who purchase movies today, however, that means that movies have to be purchased again once that feature is available. The website also hints that the restrictive usage models that are in place today are determined by movie studios: "We offer our videos to you according to the licenses given by filmmakers and content companies. We are working with them to expand our options so you have more of what you want," the site states.

The release of movie content as legal downloads is a big step for the movie industry. The industry is still battling illegal downloads especially through BitTorrent sites and valuable content is only released with as much usage restriction as possible as a result. However the are walking down a path on which content companies are exploring a level of DRM that will be accepted by users in exchange for the convenience of buying movies without leaving the house. Over time, certain content locks could be removed.

Preventing reasonable use of content and charging more than what consumers pay for DVDs may be a sign that the movie industry and download services still have some way to go until these services may actually make sense and provide value. But then, the movie industry is used to some delay in finding the perfect balance of product, service and price: Referring to the relationship between the content industry and the customer, Sony's chief executive officer Sir Howard Stringer recently said: "Sometimes we misunderstand each other, but that's a concept of marriage."