HP running family-friendly download stores

By Jennifer Netherby -- Video Business, 5/21/2008

MAY 21 | Hewlett-Packard, which folded the movie download store it ran for Wal-Mart in December, is getting back into the business, this time partnering with The Parent Teachers Assn. and the Boys and Girls Club of America to launch kid-friendly online video stores.

The stores will launch today with 10,000 DVD titles and nearly 1,000 movie downloads from every major studio for sale. HP plans to add movies from its manufactured-on-demand service to the selection in the coming months.

Harmony Digital Media Consortium, a group that develops fundraising initiatives for non-profits, created the service with the Motion Picture Assn. of America and will manage the service. HP will run the video site, including handling DVD fulfillment.

The sites will offer both catalog titles and new releases at pricing similar to that of other online retailers.

The PTA and BGCA are positioning their video stores as an online safe haven for kids and parents, where they will be able to find suitable movies to buy or download, with the revenue benefiting their respective organizations.

The PTA site will include all movies with a rating of PG-13, PG and G. The BGCA site will include all movies with a rating of PG and G.

“This is an ongoing area of concern and importance for us,” said PTA national secretary and treasurer Betsy Landers. “The new site offers us the opportunity to give another resource to our families to help them make informed media choices for our children.”

Films will be priced similar to other movie downloads and DVDs sold online, with HP’s merchandising team determining pricing.

Both clubs will sell gift cards in amounts of $25 to $100 for use on the site. BGCA cards will be sold at Circuit City, with the PTA gift cards at Office Depot. Since many kids today receive gift cards rather than cash or gifts, by giving PTA or BGCA cards for their video stores, parents have more control over how their kids use the cards. The PTA site will require a credit card for purchases of PG-13 movies to enforce age restrictions.

The two orgs believe the sites could potentially generate substantial revenue for their groups.

“If the American public really got behind it, the revenue could be tremendous for us,” said Cyndi Court, senior VP of resource development for the BGCA.

The launch of the two stores comes six months after HP exited the movie download business, closing the site it ran for Wal-Mart.com, citing slower-than-expected sales.

The difference this time is that the video stores also will sell DVDs and Blu-ray movies, said Willem De Zoete, VP and general manager for HP Digital Content Services. HP expects DVD to account for most of the sales.

“We’re strong believers in downloads, but it will be quite awhile until it is mass market,” he said. “As a business opportunity, it’s still a long way out.”

The PTA and BGCA will advertise the service to their respective memberships. The PTA has 5.5 million members nationwide, and the BGCA has 4.8 million.

“We already have a built-in audience interested in having this type of resource,” Court said.

The Web sites will allow users to navigate by genre, actor and movie title, allowing them to pick a movie and then choose the format they want to buy it in. The site also explains the MPAA rating system to parents.

Downloads will include Microsoft Windows DRM and will be playable on the PC the film is downloaded to and several other registered PCs. Users will be able to begin watching the download within one to two minutes after the download begins.

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