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AOL offers broadband subscribers free flicks

A promotion with Movielink lets AOL members download 10 classic titles such as "Steel Magnolias" and "Against All Odds" for free.

America Online launched a promotion Thursday that lets subscribers of its broadband service download full-feature films for free through Movielink.

The promotion expands on an existing deal between the two companies that allows AOL members to rent downloaded movies for 99 cents a title. Under the new program, the companies will make 10 "classic titles," including "Steel Magnolias" and "Against All Odds," available for free in the first month. In subsequent months, five movies will be offered. Once downloading is complete, customers have 30 days to watch the film and 24 hours to complete it, once viewing begins.

AOL is betting on digital media as a way to persuade people to pay an additional $14.95 per month for its service on top of their existing broadband bill. AOL has been marketing its broadband service in hopes of stemming the defection of members from its dial-up service, which has witnessed heavy losses over the past year.

In the third quarter of 2003, AOL lost 688,000 dial-up customers, most of whom were paying $23.90 a month for service. That's down from second-quarter dial-up losses of 846,000 members. However, AOL reported 2.6 million "broadband" subscribers, many of whom subscribe to AOL's $14.95-a-month plan.

AOL said the earlier deal has helped Movielink increase downloads from its 1,000-films strong library by 15 percent. Typically, Movielink charges $4.99 for each film download. "Since our initial partnership with Movielink, we've steadily seen increased usage among the AOL for Broadband community," Steven Yee, vice president and general manager of AOL Movies and Moviefone.com, said in a statement.

Internet companies are aiming to fuel demand for subscription video services, a market that's expected to grow from about $991 million in 2003 to more than $4.5 billion in 2007, according to recent research from In-Stat/MDR.

Movielink has already partnered with other broadband providers to offer movie download promotions. Its partners include BellSouth, Time Warner Cable and SBC Communications. Movielink is a joint venture of Universal Studios, Paramount Pictures, Metro-Goldwyn-Mayer Studios, Sony Pictures Entertainment and Warner Bros.