• by Masha Geller , December 4, 2002

No surprisingly, most of the world was talking about AOL’s financial woes yesterday, with brief mentions of Expedia adding a $5 charge per airline ticket sold through its site. What I found a lot more interesting was the announcement from RealNetworks Inc. and cable movie channels group Starz Encore, who promised to launch an Internet movie-on-demand service in the spring, so that users can download movies off the Internet and watch them on their computers or on TV hooked up to PCs.

According to the announcement, made yesterday at Broadband Plus, a trade show for the cable industry, Starz On Demand will be a "low monthly fee" subscription service (about $10/month) and will offer subscribers of the Starz Super Pak more than 100 movies each month. These would be the same titles available on the Starz Encore's scheduled cable and satellite services, such as "The Lord of the Rings: The Fellowship of the Ring," "Black Hawk Down," "Pearl Harbor," and "The Fast and the Furious." Alleviating pirating concerns, the files cannot be copied to CDs, a spokesman said.

This is the second such development in recent history. Last month, five top Hollywood studios unveiled Movielink, an online box office that allows users to download movies for $2 to $5. The downloaded movies can be stored on computer hard drives for up to 30 days without being played. Once played, they must be viewed within 24 hours before being deleted.

Of course, it remains to be seen if consumers are at all interested in these offerings, but the plans alone are significant for a number of reasons. After years of living in fear, the $70 billion film and television industry seems to have finally developed a certain level of comfort with the Internet, hoping it will help with, not exacerbate the piracy issues movie studios battle daily. More importantly, some experts say that on-demand online movies would actually fuel the growth of broadband, particularly cable modem sales, which would be good for everyone in this industry.

We'll keep you posted.