Internet Video

Amazon Goes to Movies

9/08/2006 8:00 PM Eastern

Amazon Inc. and Apple Computer Inc.’s iTunes will give consumers yet another platform to view hit theatrical releases prior to their video-on-demand debut, through new online movie download services.

Amazon last Thursday launched its Amazon Unbox, which is offering movie releases currently within their DVD distribution window, like Inside Man, Akeelah & The Bee and Friends With Money, for consumers to download to PCs and Windows Media-based portable media players. The DVD window for movies typically comes 30 to 45 days in advance of their availability in cable or satellite providers’ pay-per-view or on-demand slots.

Amazon’s prices for movie titles range from $15 for newer titles to $7 to $10 for older movies such as The Matrix and Swordfish. The company has distribution deals with such studios as 20th Century Fox, Paramount Pictures and Warner Bros.

Consumers will have to download a special video player to watch content from the service. The files can only be downloaded onto two different computers and one portable media player, according to Amazon. The company will not allow consumers to burn the files to a disc and watch it on a DVD player.

Amazon Unbox’s launch comes a week before Apple Computer Inc. is expected to announce its own movie download service. Apple officials could not be reached for comment at press time, but published reports say the company initially plans to offer current and library movie titles from Walt Disney Co. for download to video iPods.

Apple, through iTunes, earlier this year offered Disney Channel’s original movie sensation High School Musical for $9.95.

Apple and Amazon will compete with similar, legal online movie downloading services like Starz Entertainment Group’s Vongo, Movielink and CinemaNow, as well as a host of illegal peer-to-peer sites that offer theatrical movies for free. In addition, the two companies will also go toe to toe with mail-order movie rental services from Blockbuster Inc. and Netflix Inc.

Despite having earlier windows for new releases, Amazon and Apple’s online movie services initially pose more of a threat to the traditional DVD business than VOD, according to Leichtman Research Group president Bruce Leichtman.

“The idea of downloading movies over the Internet needs to evolve, so the impact on VOD will be pretty minor in the short term because those people who are using VOD and PPV have an attachment to the technology already,” he said.

Much like iTunes, Amazon Unbox will also offer TV show from such cable and broadcast networks as A&E, Comedy Central, Cartoon Network, Discovery Channel, E! Entertainment Television, Nickelodeon, MTV:Music Television, Fox Broadcasting Co. and CBS.

Shows featured include Comedy’s Chappelle’s Show and South Park; Fox’s 24; Nickelodeon’s Dora The Explorer and SpongeBob SquarePants; and CBS’s CSI: Miami.

September