E-tailer is working with studios to provide digital content

Amazon.com is preparing to enter the digital download space this spring with a service that will likely marry downloads to DVD sales.

A number of studios are circling the end of April on their calendars as the time when Amazon will likely start rolling out full-length digital downloads.

E-tailer is working to convince indie studios, including Image Entertainment, Ardustry Home Entertainment and First Look Entertainment, to provide digital content for the service. It will launch with at least two major studio digital content partners.

Amazon spokeswoman Kristin Mariani said the company hasn’t announced any plans for a download service and declined to comment further. Company execs said during an October earnings call that they were working on a movie download service.

Netco is still considering a number of strategies for its service. But one key theme framing the discussions is that Amazon envisions offering its users a “try before you buy” option.

One supplier explained that an Amazon customer could stream a digital copy of a film for a fee and apply that charge as a credit toward the eventual purchase of the DVD.

Another plan is for a customer to buy a DVD; while waiting for it to arrive, he could stream the content over his computer.

Amazon’s potential service is similar to a proposal cabler Comcast has been pushing to studios over the last six months. Comcast wants to allow its cable customers to download films on video-on-demand and receive the DVD in the mail days later for the price of a new DVD.

Underlying Amazon’s approach: The site does not want to cannibalize DVD sales with its digital service. Also, Netco can satisfy impulse shoppers, who may shop at brick-and-mortar retailers to avoid shipping delays on hot DVD releases.

“What they are serving up is a direct companion to the DVD,” explained one senior Hollywood exec. “Everything is being leveraged to sell more DVDs. When you go to a product page on the site, it will say all the variations about how you’d purchase that video — stream, buy or maybe a combination (of options).”

Amazon’s digital developments appear to further its recent baby steps into this arena. In the past several months, Amazon.com has offered exclusive downloads of material tied to certain DVDs, including bonus features from “Seinfeld” sets. But up to this point, material has been relatively shortform, not full-length feature film.

Apparently, the hoopla surrounding the launch of the video iPod revved up Amazon.com’s talks with studios. There’s a sense the established e-tailer doesn’t want to get trounced by newbies on its Internet turf.

It’s unclear what movie content Amazon will have available at launch. The major studios have so far licensed their movie content for Internet downloads only to Movielink and CinemaNow in the pay-per-view window that lags DVD. However, they have licensed TV downloads to iTunes, Google and others.

“We are having active conversations with Amazon regarding their digital strategy,” Image exec VP business development Burgess Wilson said. He declined to reveal details about the negotiations.

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