Is there new upside in pic downloads?

Companies gear up for online film distribution

Are movies on the Internet ready for primetime?

Movielink and CinemaNow have been offering films via the Web for several years, but have built only niche businesses. Pay cabler Starz had a total flop when it tried selling movies with RealNetworks last year.

But rather than scaling back, the market is only getting bigger.

Sony will start selling movies via Connect, its thus-far unsuccessful online music store, in March. And Starz just relaunched its Net offering in a much more robust form dubbed Vongo.

Each company has a good reason to get into the space: Starz already paid for Internet rights to movies it airs and needs to make something out of its investment. Sony has a growing number of Net-connected devices that play movies — most notably the PSP — and wants to get content to them.

But the investments demonstrate that as the digital entertainment biz keeps growing, most industryites believe Internet video on demand will inevitably become a robust market.

When it comes to online movies, past performance may not accurately predict future potential.

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