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Magic not yet global

By Nicole Manktelow
October 25 2002

It's a powerful spell that can persuade the movie industry to put its better products online - magic from the wand of Harry Potter, perhaps. But there's a catch even the boy wizard can't overcome.

Harry Potter and the Sorcerer's Stone is available, pay-per-view, via the Internet but only to American net users.

It's the first of Warner Bros Pictures' premium movies to go online for purchase as a download, but the deal with the distributor is restricted to the US.

However, the move is still a significant step toward a new distribution system for delivering movies-on-demand into homes. With digital video recorders and DVD recorders - which are both capable of storing feature length films at top quality - becoming more affordable, it's possible video stores may one day be bypassed altogether.

CinemaNow provides movies-on-demand and claims two million video streams to a million Internet users a month.

The lion's share of the company is owned by Lions Gate Films, with Microsoft and Blockbuster other shareholders.

Many of its B-grade movies or oldies - such as Backyard Fight Clubs (Vol I and II) and Mickey Rooney's Twenty-Four Hours to Kill - are accessible to anyone, anywhere in the world.

However, Harry Potter and the other Warner titles in the deal, such as Mars Attacks and Dial M for Murder, are sold separately as a download for about $US4 ($7.30).

They can be played several times, but expire after 24 hours - and at 700MB a download, the task is best suited to users with broadband connections.

CinemaNow uses Internet Protocol (IP) technology to ensure only those logged in from licensed territories may view certain films. Australians can't even see a mention of Harry Potter on the site.

It is that kind of control that has persuaded Hollywood executives to try the system.

It is fitting that Warner Bros has tested the water first. Its parent companies merged to form AOL Time Warner last year, combining massive entertainment interests with the world's largest ISP.

Coy about online distribution and worried about piracy, the entertainment industry has until now exposed only those films it considers low risk - that means titles such as Faces of Death and the blaxploitation western Boss.

Quirky Australian comedy A Little Bit of Soul, about a satanic federal treasurer played by Geoffrey Rush, shines above the rest.

But it's Harry Potter who has the clout. The kind backed by an extraordinary global following - not to mention record book, box office and merchandising sales.

Potter's online appearance in the US alone could herald a new era for Internet movies if people are willing to pay online, as they have elsewhere.

Sorcerer's Stone collected $US970 million ($1.77 billion) in worldwide box office sales, making it the second-highest grossing flick of all time and one of the best-selling home video titles.

The timing for a little online Potter publicity is probably no coincidence. Marketing is well under way for the second movie, Harry Potter and the Chamber of Secrets, due for global cinematic release on November 15.

If online movies are deemed successful, the major studios could compete directly with CinemaNow.

Universal Studios has since agreed to test CinemaNow with Big Fat Liar, The Scorpion King, Psycho and Erin Brockovich (again, just for US consumption) but only for four months. Meanwhile the contract with Warner Bros will close about the same time.

When both contracts end, Warner Bros and Universal might well take their movies elsewhere on the Internet.

Both studios have joined Metro Goldwyn Mayer, Paramount and Sony to build a competitive online movie service. They hope to launch their own pay-per-view Internet system by the end of the year.

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