Starz! gets Real via online service
Monthly fee allows unlimited movie downloads
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The two companies first partnered in late 2002, promising to launch a joint service by the following spring.
After over a year's delay, Starz! Ticket on Real Movies launches today, allowing users who pay $12.95 per month to download any or all of a library of 100 films that's updated weekly.
It brings the two companies into a small market with current competitors MovieLink and CinemaNow, but the online service is the first to offer a Netflix-like unlimited subscription.
Netflix itself plans to expand online next year, and TiVo has hinted that it will enable movie downloading to its set-top box through the Net as well.
Films on the service will come from Starz!'s pay TV deals, for which it has paid extra for exclusive online subscription rights. Starz! currently has exclusive rights to films from Disney, Sony starting in 2005 and New Line, as well as half of Universal's output through the end of this year.
Pay TV window typically begins six months after the video-on-demand window, though, putting the new service behind Movielink in offering new pics.
Unlimited downloads key
Given the success of Netflix over its pay-per-rental competitors, though, Starz! and Real execs are betting the unlimited download package will beat out individual online rentals, which cost up to $5.
Content will be a mix of new releases and library titles. Starz! also has rights to library pics from Warner Bros. and Paramount.
Because Starz included online subscription rights as part of its pay TV output deals, revenue from the service will flow entirely to it and Real. Model is different model from those of other Net VOD services, which split revenues with studios.
Service is initially aimed at travelers who can watch movies on laptops, but RealNetworks is working with electronics manufacturers on devices that can move its content onto a television. It hopes they'll start hitting the market by the end of the year.
Such products could offend cable MSOs, who would fear losing Starz! subscribers to the online service with its video-on-demand capabilities.
To avoid angering cable partners, the two companies had initially planned on making access to the online service contingent on subscribing to Starz! on TV, a plan they've since abandoned.
But it could still be a boon to cable operators for their high-speed Internet businesses. Starz! and Real are hoping to partner with cable Internet and DSL providers to market the movie service to their broadband subscribers and share revenue.
Service will be integrated into RealPlayer and protected with RealNetworks' digital rights management software.
(John Dempsey in New York contributed to this report.)
