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Movielink Forges Broadband Alliances, Plans Marketing Push

25 Aug, 2003 By: Holly J. Wagner

As studio-backed video-on-demand (VOD) service Movielink prepares a push to enlarge its customer base, the service is gathering steam from recent deals with Internet service providers (ISPs) BellSouth and MSN broadband provider Qwest to reach their broadband customers.

“What we did when we launched the business is launch a retail Web site. That was the first order of priority: to get a service up and understand the consumers -- who they would be and what their needs are,” Movielink CEO Jim Ramo said. “We are now beginning to slowly but surely grow our distribution, with vertical site deals with Hollywood.com and feedroom.com as well as the ISPs.”

Among other recent coups, the VOD service that is a joint venture of Paramount, Warner Bros., MGM, Sony and Universal recently got rights to offer Disney product via download. Conspicuously absent in the lineup is Fox, with which Ramo said Movielink is in ongoing negotiations.

“I think it's just a timing issue,” he said. “We would like to get a deal done; I think they would like to get a deal done.”

So far Movielink users are primarily tech-savvy men between the ages of 25 and 49, about one-quarter of them business travelers.

“It may be because uniquely, we offer mobility. It may be that we have a group with technical ability that is willing to pay for movies,” Ramo said. “Generally what we're finding is a targeted core audience that comes back often. When they come back, they transact pretty readily; they don't surf around a lot. We have an extremely good conversion rate with repeat customers.”

Still, the average Movielink repeat customer downloads two movies a month, compared with industry estimates that the average Blockbuster Video customer rents eight movies a month.

Downloads still average 70 minutes for a feature film, but Ramo said the new deals could help some customers get faster downloads.

“To the extent that we are dealing with last-mile providers, we can create a relationship that has technical, operations and engineering components,” he said.

Movielink will seek to heighten its profile with more marketing relationships and plans some promotion to the college market this fall. But expanding the customer base does not translate to subscriptions, at least yet.

“At this stage of our existence, we like that people can come to our site and have a very low barrier to entry for our service,” Ramo said. “Where we are today, with the rights that we have and the newness of the Internet download model, we are satisfied with what we have.”

The customized service offered via BellSouth will let DSL subscribers preview trailers from the BellSouth home page (bellsouth.net), then download the movies from a Movielink page designed just for BellSouth FastAccess customers.

“It'll look like Movielink with a BellSouth skin,” Ramo said.

The deal with Qwest is part of a larger initiative that the ISP has cobbled together with Sony Pictures Digital Networks, which is bundling access to online games, music downloads from Sony Music, Screenblast video editing tools, Movielink and SoapCity.com.

The alliance with Qwest should drive broadband subscriptions at MSN Broadband, which uses Qwest as its carrier. New subscribers can get the Broadband Entertainment Pack bundle free for six months, instead of the $169 it would cost those adding it to existing service. It also reduces the cost of broadband access for new subscribers to the ISP. Those who sign up to receive a Qwest home communications package or Dish Network's America's Top 100 channel package will be eligible for a year of MSN Broadband for $29.99 or $34.99, depending on connection speed.

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