Retail renaissance

U, Telefonica team for digital service

By JOHN HOPEWELL

'King Kong'

Universal Pictures has partnered with Spanish telco giant Telefonica to launch a pioneering legal P2P digital retail service for Spain, offering U movies, music and other content.

Modeled on the British download-to-own service created by Universal and LoveFilm, a Netflix-esque rent-by-mail firm, launched in April, Telefonica will bow the service with U's "King Kong" today.

The offer will expand on Aug. 1 to cover 30 U movies, including "Brokeback Mountain," "Doom," "The 40-Year-Old Virgin," "Nanny McPhee," "Serenity" and "Pride & Prejudice."

Movie titles will be launched day-and-date with the Spanish DVD release, and U will include TV programming from September.

Prices are cheaper than the U.K., varying from E16.95 ($21.20) for new releases such as "King Kong" to $11.30 for catalog titles.

Consumers will receive a digital copy to store on a PC/laptop and a second digital copy to store on a Windows Media compatible portable device. Unlike the U.K., Telefonica will not dispatch a third copy by post.

Films will be supplied by Telefonica's PixBox portal, using Arvato Mobile P2P technology.

For U, the service is an attempt to migrate Spaniards from traditional retail and illegal piracy.

"This is the first legal peer-to-peer service in Spain," Edgar Adelmund, director general of Universal Pictures Iberia, said at a Madrid press conference Thursday.

Partnering with U, Telefonica has stolen a march on potential broadband content suppliers such as iTunes or Google, and enhanced the value of its rapidly growing broadband services.

"The deal is part of Telefonica's drive to add value to its Internet broadband via contents," said Luis Velo, director general of Multimedia Projects at Telefonica de Espana.