Disney, News Corp. to Offer Video-On-Demand

Walt Disney Co. and News Corp. announced a joint venture to launch a new service that will provide movies and other entertainment content on demand.

The venture, called Movies.com, is expected to launch in early 2002 in the U.S. The companies said the service will be available to consumers with enhanced cable systems with on-demand capabilities as well as all forms of broadband Internet access.

The service will feature live-action films and other content from Walt Disney Studios, including its Miramax Film division, Twentieth Century Fox and others.

News Corp. President and Chief Operating Officer Peter Chernin said in prepared remarks that the venture “will provide consumers with an exciting new way to enjoy films … while ensuring their easy access to the content.” He added that the deal “will be an important step toward protecting the integrity of our intellectual property in the broadband era.”

Movies.com will be a new operating company owned equally by Disney, of Burbank, Calif., and Australia’s News Corp. The venture will enter into video-on-demand distribution agreements with Disney Studios, Twentieth Century Fox and Miramax Films. The companies said new releases will be made available to Movies.com on an exclusive basis for a limited period of time ahead of the traditional pay-per-view window.

Movies.com will also offer some recent and classic films from the film libraries of Fox and Disney. The companies said the service also anticipates licensing rights to new releases, library films and other content from third party suppliers.

Movies.com will be based in Los Angeles and will have an independent management team.

Earlier this month, five other studios announced a similar joint venture. The studios involved in that deal are Sony Corp.’s Sony Pictures Entertainment; AOL Time Warner Inc.’s Warner Bros.; Vivendi Universal SA’s Universal Pictures; Viacom Inc.’s Paramount Pictures; and Metro-Goldwyn-Mayer Inc. Each owns 20% of the venture and will contribute an equal, undisclosed amount to its development.

Copyright (c) 2001 Dow Jones & Company, Inc.