NYT has coverage of the online movie industry. A.O. Scott looks at the democratizing effect of internet movie content and the possibility of first run movies being made available online.
I went over to jaman. There's a lot of potential in this approach but the tech side is not up to speed yet. I watched a few minutes of a Kung Fu movie -- the picture was very small and had modest resolution, but the idea of being able to download a movie is still pretty appealing.
The technical difficulties associated with downloading huge files (a 90-minute feature downloaded from jaman.com is about 1.3GB) will be lessened when the quad-core chip becomes available at consumer prices. Add the solid-state drive (SSD. Should be available before the end of the year) and downloads become far easier, with no crashes or freezes.
The last element needed to make movie downloads a mainstream choice is internet connection speed. Right now the max transfer rate is about 1.5 megs/second. (I know your cable company advertises speeds up to 6 megs but that's not a reality. Usually the transfer rate hovers around 400 kb/sec -- that's less than 1/10th the 6 meg/sec rate). At 1.5 mb/sec a movie would take about 1000 seconds to download -- that's pushing 20 minutes (under perfect conditions with no freezes and a hypothetical max transfer rate). At a more realistic transfer rate a movie would take up to 10 times 20 minutes to download -- not very palatable.
There are two possible fixes: Nationwide installation of high-speed optical cable, or, establishing high-speed satellite feeds. Unfortunately, neither of these is on the horizon, but the satellite option seems most realistic to me and 2 mb/sec transfer rate is currently in place.
For aspiring filmmakers the news couldn't be better. In a few years all you'll need to make a movie is a digital camera and a site that will accept your upload and, baddabing, you've got your first feature produced and distributed. The two major differences: You won't need to buy thousands of feet of film (or worry about the costs of processing, and editing), and you won't need a distribution deal to get your movie into theaters.
The online movie download industry may be in its infancy but I think it represents the way people will get their movies in the not-too-distant future. I mean, it wasn't that long ago we listened to music on AM radio and 8-track tapes, and watched movies only at the theater or on TV (until the advent of the VHS tape, that is). Stay tuned...