Former DirecTV Inc. and TVN Entertainment Corp. executive Jim Ramo last week was named CEO of Internet video-on-demand subscription delivery service Movielink.
The venture — created by Metro-Goldwyn-Mayer Inc., Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. — hopes to launch with a slate of new releases and library product in the second half of the year. The studios will decide on pricing and film-release dates.
"This is real commitment from real content providers," said Ramo, who also was CEO of content-streaming firm Geocast Network Systems Inc. "They realize this is a long-term marathon. The Internet needs to be opened as a new, legitimate distribution channel."
The studios announced the venture last August, after watching the major music labels get blindsided by the Napster Inc. file-sharing phenomenon.
There's already a small, but serious amount of Web movie piracy right now, so the studios hope to avoid a Napster-like situation by offering both new releases and library titles legitimately — and for a fee — via the Internet.
Although Movielink will initially be an Internet protocol-based service, Ramo said the company will talk to other distribution partners, including cable and satellite operators.
"This is a video-on-demand business, not exclusively an Internet business," he said.
The bulk of the initial capital expenses will go toward building the product's IP-based infrastructure, Ramo said.
The studios will reportedly invest more than $100 million in the venture. Ramo wouldn't comment directly on that figure, but said each studio was committing outlays in the "tens of millions" of dollars to get the service up and running.
"It is sufficient to give video-on-demand a chance to work," he said.
Ramo must answer a list of extensive technological questions. Movielink must develop a nationwide distribution network, presumably through an Internet backbone provider, and both regional and local serving and hosting capabilities.
Given Internet piracy problems, digital-rights management will be a key issue for studios. Microsoft Corp., RealNetworks Inc. and others are angling for that business.
Movielink also will have to tackle content management, electronic commerce and Web-site development issues.
Ramo also said he would assemble marketing, affiliate-relations and business development teams in Los Angeles over the next few months as Movielink heads from the development phase to the product phase.
Those affiliate teams will likely have much discuss with cable operators, who claim the lion's share of the 10 million broadband households Movielink has targeted.
College campuses and the workplace are two other areas where Movielink is likely to be active.
Movielink also will likely talk to such digital subscriber line providers and Web-portal operators as Microsoft's MSN, America Online and Yahoo! Inc., Ramo said.
Three of the studios in the venture — Sony, Universal and Warner — have sister record labels that have launched subscription Internet movie businesses over the past months, helping to heat up the Web's subscription-content model.
