July 31, 2003|By Dawn C. Chmielewski | Dawn C. Chmielewski,KNIGHT RIDDER/TRIBUNE
Walt Disney Pictures, the most outspoken Hollywood studio on the threats of Internet piracy, for the first time will distribute its movies online.
The studio will make about 50 of its titles, including Miramax releases Chicago and Gangs of New York, available next month through Movielink, an online film-rental service started through a joint venture of five movie studios. The deal represents a milestone for Movielink, which has increased its online movie catalog from 175 titles eight months ago to more than 400 films from six major studios.
It's also the first concrete evidence of Disney's desire to recast itself as a leader in the digital transformation of the entertainment industry. It's a new direction that Chairman and Chief Executive Michael Eisner heralded in his speech last spring before the National Association of Broadcasters. Eisner said he wouldn't let the threat of piracy keep the company from aggressively embracing new forms of distribution.
Disney had been most closely associated with congressional anti-piracy initiatives, including a bill last year that would have forced electronics makers to prevent consumers from making unauthorized copies of films and songs.
"For them, it is the beginning of their digital distribution strategy," said Jim Ramo, Movielink's chief executive. "For us, it's very important because they're obviously a key, major studio."
Films from Disney, Touchstone, Miramax and Dimension will be offered for download through Movielink at the same time they are available through video-on-demand services. A consumer pays $3 to $5 for a movie for unlimited play within a 24-hour period.
The deal covers Disney's mature movie fare, including Frida and In the Bedroom - films that match the typical user of Movielink's rental service, which tends to be adult males. The studio will also make available a limited amount of family content, like Pixar Animation's Monsters, Inc. and the Dennis Quaid baseball movie The Rookie, but not classic Disney animations like Snow White.
Analysts described the deal as more about reshaping public perception than enhancing studio revenue.
"A digital movie distribution deal is not going to move any decimal points on the quarterly financial statement," said Steven Vonder Haar, analyst with Interactive Media Strategies. "But it can help build the perception that Disney and its executives are doing everything they can to embrace the brave new digital frontier."
