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The Walt Disney Decides To Download

Almost two months after most Hollywood studios started selling movies via online download, The Walt Disney Co.'s Buena Vista division has entered into an agreement with online distributor CinemaNow to do the same.

Beginning today, CinemaNow users will be able to choose from 30 Disney titles, including National Treasure, The Pirates of the Caribbean and Chicken Little; the studio will also begin selling online downloads "day and date" with their DVD releases, beginning with the June 6 release of Glory Road. The deal does not include movies from Pixar (nasdaq: PIXR - news - people ), the animated movie studio Disney acquired earlier this year.

The agreement is yet another sign that Hollywood studios are willing to tinker with the profitable DVD distribution channel they have relied on since the late 1990s by selling movies directly to consumers. Last month, both Movielink and CinemaNow, which had previously only allowed customers to rent movies via the Internet, began letting customers buy and download permanent copies of the movies to their PCs.

Both online distributors are owned by different consortiums of movie studios. But although Disney is a part owner of CinemaNow, the studio hadn't made its films available for permanent downloads on the service until now.

CinemaNow President Bruce Eisen said his company had been in talks with Disney for months, but "it just took a while to turn the ship around."

A person close to the matter said Disney was attracted by CinemaNow's plans to make the downloads playable on portable devices, including media players made by French electronics manufacturer Archos. Until now, CinemaNow had only allowed consumers to watch downloaded movies on their PCs or laptops.

Movielink doesn't allow the transfer of movies to other devices--yet. And because the Buena Vista deal is not exclusive to CinemaNow, Movielink could enter into an agreement with Disney at any time once its movie downloads are portable. But the exclusive rights, however temporary, might give CinemaNow the pop in sales it needs to make up for having download-to-own deals with only Sony (nyse: SNE - news - people ), MGM and Lions Gate Entertainment (nyse: LGF - news - people ), while Movielink sells titles for MGM, Viacom's (nyse: VIA - news - people ) Paramount, Sony Pictures Entertainment, News Corp.'s (nyse: NWS - news - people ) Twentieth Century Fox, General Electric's (nyse: GE - news - people ) Universal and Time Warner's (nyse: TWX - news - people ) Warner Bros.

Eisen says CinemaNow is in the midst of talks with Paramount, and a deal could happen by late summer, although "it is not imminent."

Meanwhile, no Hollywood studio has struck a deal yet to sell movies via Apple Computer's (nasdaq: AAPL - news - people ) popular iTunes online store, which does sell music videos and one-hour television shows.
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