CIOL:You can download movies at Amazon.com now

You can download movies at Amazon.com now

Will offer content from six major Hollywood studios, including 20th Century Fox and Warner Bros.

Friday, September 08, 2006

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By Alexandria Sage

LOS ANGELES - Amazon.com has unveiled a widely anticipated Internet service offering movies and TV shows that can be downloaded to personal computers, solidly moving the online retailer into the nascent market.

The service, called Amazon Unbox, will offer content from six major Hollywood studios, including 20th Century Fox and Warner Bros., as well as TV networks such as CBS and Fox and cable channels like Comedy Central and E! Entertainment, Amazon said in a statement.

Amazon shares, which closed at $29.73 on Nasdaq, rose 23 cents in extended trade, up nearly 1 percent.

Speculation about an Amazon download service had been rife for months, with Wall Street considering such a prospect a positive due to the higher profit margins in digital downloads.

Seattle-based Amazon, the No. 2 e-commerce site behind eBay Inc., has seen slowing sales and has fewer new product categories into which it can expand.

"Directionally it's the right kind of thing for them to be doing," said Global Crown Capital analyst Martin Pyykkonen. "From a margin standpoint this is a much better business than anything they've done before."

The launch of Amazon's digital download service comes days ahead of an expected announcement by Apple Computer Inc. on Tuesday that it would allow customers to download feature-length films as part of its iTunes service, which already sells TV shows from major networks.

Sources had previously told Reuters that Amazon was in talks with four major music labels for a digital music service that would rival Apple's.

Pyykkonen questioned how long it would take for Amazon's movie download service to boost margins. Also, broader questions remain, he said, including whether the download service will cannibalize sales from Amazon's DVD business, or whether the service will hurt rival retailers.

"In a general sense, a Blockbuster Inc., a Wal-Mart Stores Inc. should feel the pinch more from this over some time," Pyykkonen said. "Whether it's more immediate ... is something that's harder to answer."

Amazon, which owns movie Web site IMDB.com and also allows its customers to view and download books, said its service was the only one to offer DVD-quality picture.

Amazon customers will be able to buy downloads on one computer but download them to another, such as a home computer. The service does not allow copying of content onto a CD.

Movies will be priced between $7.99 and $14.99, with television shows at $1.99 per episode. Movies will also be rented for $3.99, the company said.

Amazon, which will also offer films from independent studios such as Lions Gate Entertainment Corp and Fox Searchlight, said TV content will be available to consumers as soon as the day after an episode airs.

Downloadable films have been available through privately owned Movielink and CinemaNow, which until April offered digital movie downloads for a rental period that would eventually expire. Last spring, both companies said they would offer a download-to-own service for popular titles.

Warner Bros. is part of Time Warner Inc. and Fox is owned by News Corp. Inc..

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