Hollywood jumped half-heartedly into the downloadable movie business today, with major studios announcing deals with Movielink and CinemaNow to offer full downloadable versions of new DVD releases. The problem is that for twice the price of a physical DVD you get a product that can only be played on a computer. The LA Times reports:

Major studios today will make mainstream movies available for downloading the same day they are released on DVD - a significant step in Hollywood's tentative migration to the Internet.

But movie fans will pay for the convenience: Downloadable flicks such as "Brokeback Mountain," "King Kong" and "Pride and Prejudice" may cost as much as twice what the DVD versions do and play only on a personal computer. New releases can't be rented online, just purchased.

The constraints on services from Movielink and CinemaNow illustrate the central role that economics plays in the evolution of home video distribution. As they experiment with offering online video on demand, studios are keeping prices high and restrictions tough so they don't alienate retailers, whose DVD sales still provide the vast majority of revenue.

"We think this is a great consumer offering that complements the DVD release," said Rick Finkelstein, Universal Pictures' president and chief operating officer. "If somebody wants to get their content online and create a digital library, this gives them the opportunity to do that. This is another way for consumers to access movies."

...[Movielink Chief Executive James] Ramo said download-to-own movies would sell for $20 to $30 -- up to double the $15 that discount retailers such as Wal-Mart Stores Inc. charge for DVDs, with downloads of classic titles for $10 to $17. He said the premium reflected the convenience of the service and the flexibility to transfer the digital download to two computers, as well as the ability to create a backup DVD that also would play on computers running Microsoft Corp.'s Windows operating system.

Until downloadable movies are cheaper and more convenient than physical DVD's no one is going to by this crap. As with all things tech, we'll probably have to wait for the porn industry to be the true innovators.