Film downloads likely to be a hitsmh/businessREAD the...

Film downloads likely to be a hit

smh/business
READ the notice.........REELTIME will become a wholesaler to other internet service providers and portals, withdraw from retail etc
Paul McIntyre
October 11, 2007

WHILE broadcasters poke and prod for the most lucrative way to take shows online and to mobile phones, an eclectic bunch of aspirants is entering the market for downloading films and TV shows for rent and purchase.

In the US market in the past 12 months Wal-Mart, Amazon.com and Blockbuster Video have joined the race to become the first-choice brand when consumers download films and TV shows after broadcast.

The three new US market arrivals, along with the rapid expansion of the world's largest internet-ordered,

post-delivered movie rental service, Netflix, in online downloading have triggered a surge in consumer spending.

Netflix announced last month that, in the six weeks to the end of August, its customer base had doubled the number of viewings of TV episodes and movies downloaded to their computers to 10 million.

It is not surprising, then, that DVD rental chains in Australia are starting to take notice.

Australia's biggest online seller of post-delivered DVD movies and TV series, EzyDVD, which also has a 68-store retail chain, struck a deal two weeks ago to take up to 30 per cent of the listed broadband content distributor ReelTime Media over the next three years.

ReelTime has been on a roller-coaster ride since its venture with Yahoo!7 failed this year. Under the EzyDVD deal, the ReelTime brand will withdraw entirely from consumer service to become a wholesaler of content to other internet service providers and portals. ReelTime's managing director, John Karantzis, says the difference with the EzyDVD deal is that his new partner has a "tight customer base - 40,000 people go to their website every day to purchase content".

EzyDVD founder Jim Zavos says ezydvd.com.au - which until now only allowed users to buy movies and TV series as DVDs and receive them by post, not buy as downloads - contributes about 20 per cent of the company's $100 million in annual revenues.

The ReelTime deal, like a move Blockbuster made in the US earlier this year, suddenly allows Zavos to offer a content downloading weapon to preserve his position in the $1 billion Australian movie rental market and the $1.3 billion movie and TV DVD sales category.

"This is about safeguarding our future," Zavos says. "This is about the future and how people will consume movies somewhere down the track."

If Australia mirrors any of the US experience this year, Zavos will not have long to wait.

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