Intel invests in movie distribution firm

Actor Morgan Freeman and chipmaking giant Intel Corp. are teaming up on a new venture to distribute premium movies to consumers over the Internet before the films become available on DVD.

Freeman and Intel executives announced the new digital entertainment company Wednesday at an annual retreat for chief executives of top media companies in this mountain resort.

Intel is investing an unspecified amount of money in the new venture.

Called ClickStar Inc., it was formed by Revelations Entertainment, a company Freeman created in 1996 with producer Lori McCreary.

Hollywood has been reluctant to offer digitized movies directly to consumers over the Internet, fearful of suffering a similar fate as the music industry, which has been hit hard hit by piracy enabled by file-swapping services.

Freeman said his deal with Intel should avoid those pitfalls by giving customers a "simple, easy and attractive" alternative to piracy.

"We're going to bypass what the music industry had to come up with, and that's to get ahead of the whole piracy thing," Freeman told reporters at Sun Valley after making his presentation, which was closed to the press.

Few other concrete details were provided by Freeman and Intel officials about the company. However, they did say that ClickStar will be led by former Sony Pictures executive Nizar Allibhoy.

ClickStar has had discussions with major studios and producers about its plans, but no studios have yet agreed to distribute films over the new service.

Hollywood studios have offered major films over the Internet for more than a year now through Movielink, a joint venture of five studios, and CinemaNow.

Those services have yet to catch fire with the public, in part because the films are delivered over the Internet. The services also have a limited choice of back titles.

Studios such as Warner Bros., Sony and others are planning their own Internet and video on demand offerings, some of which may debut by the end of this year.

Intel spokesman Bill Calder said Intel had been working for several years with Freeman, setting up "digital home" technology in his studio and doing a long-range wireless demo at the Sundance film festival.

"It fits into our whole digital home strategy," Calder said of the investment. "One of the things we've always said is content is key."

In order for people to want multimedia PCs connected to TVs through home entertainment centers, film producers must provide high quality films for download over the Internet -- sometimes even on the day of their theatrical release.

The annual Sun Valley conference draws an A-list group of media CEOs, investors and key technology figures. This year's attendees include Rupert Murdoch, Michael Dell, Walt Disney Co. CEO Michael Eisner and investor Warrren Buffett.