The Window Is Closing on DVD Releases

Disney and others are trying to push their digital edge.
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Hollywood studios continue to warm up to selling their movies online.

Disney's

(DIS) - Get Report

Buena Vista Home Entertainment has partnered with CinemaNow, an Internet provider of movies, in a deal that will see some pictures released simultaneously with their release on DVD.

Meanwhile, the traditional DVD release window is quickly going the way of the dodo.

Buena Vista will now offer "select new movies" through CinemaNow.com which will "coincide with the timing of its home-entertainment window" the companies said. In other words, when the films are released on DVD, they will also be available through the online service.

Both Sony Pictures and

Lions Gate

(LGF)

have made some of their releases available online the same day on DVD, but Disney's entry into the fray tips the scales in terms of making more product from major studio available in the same window.

Competitor Movielink said in early April that it had signed agreements with a number of large studios to allow download-to-own movies. Previously, movies could be rented through the service for a limited time. The Buena Vista deal with CinemaNow is not exclusive.

CinemaNow counts Menlo Ventures, Lions gate,

Microsoft

(MSFT) - Get Report

,

Cisco

(CSCO) - Get Report

and

Blockbuster

(BBI) - Get Report

as investors.

Movielink is a joint venture of Metro-Goldwyn-Mayer Studios,

Viacom's

(VIA) - Get Report

Paramount Pictures, Sony Pictures Entertainment,

GE'S

(GE) - Get Report

Universal Studios and

Time Warner's

(TWX)

Warner Bros. Studios. Movielink draws content from those studios, as well as Walt Disney Pictures and others.

Both online services allow consumers to rent or own films at varying price points.

Clearly the studios are becoming platform-agnostic when it comes to post-theatrical release of their pictures. A CinemaNow rep said that like retail DVD deals, the movies will be sold by the studios at a wholesale price and the online service will then price product accordingly.

The Buena Vista agreement begins with Disney's

Glory Road

, which is set for release by the service on June 6, and will also cover recent films such as

Flightplan

and

The Insider

. "We are pleased about this broadband distribution opportunity which allows Buena Vista Home Entertainment to provide viewers with more flexibility in viewing their favorite new releases and catalog movies on this emerging distribution platform," said Buena Vista Home Entertainment EVP of Sales, Pat Fitzgerald, in a statement.

Emerging, indeed. Studios have been bitten by sluggish DVD sales, which still make up the lions share of revenue on any particular film. Now they are scratching their heads over heavy returns as retail spaces are flooded with product.

Earnings debacles last year at both Pixar, which is now owned by Disney, and

Dreamworks Animation

(DWA)

brought the crisis into clear relief. While some observers have publicly shrugged off the hit to home-entertainment revenue, these companies are hardly immune to real or potential sales shrinkage. Reality is clearly kicking in as evidenced by deals like this one.

A new movie through CinemaNow.com will cost about $20 to own and will not be available to burn onto DVDs thanks to antipiracy technology. They will be available across devices such as mobile players, laptops or home TV screens plugged in through a PC connection.

To be sure, the tightening and even disappearance of so-called release windows for movies is likely to change the movie-viewing landscape in even more spectacular fashion. As digital product comes of age, the DVD itself is looking more and more like an eight-track.