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Microsoft, CinemaNow expand Net movie alliance

Microsoft TV to update broadband service so people can rent films online from CinemaNow and watch them in their living rooms.

Microsoft and video-on-demand service CinemaNow have expanded a partnership to stream films from the Web to the television.

In October, the software maker's TV division introduced the set-top box MSN TV 2, which fuses Web access with TV viewing for dial-up and broadband users. In the spring, Microsoft TV will update the broadband service to support CinemaNow's movie-rental site, along with other providers of Web video, so that people can rent films online and watch them in the living room.

"This is another entertainment resource for the living room beyond the cable and satellite providers," said Andy Sheldon, MSN TV's director of product management.

Still, MSN has labored for many years to sell a simple Web TV consumer device without success.

Microsoft made the update possible by adding support for Windows Media digital rights management technology, which secures rights holders' content from Internet theft. Companies including National Public Radio and video on-demand sites AtomFilms and MovieLink--current partners of Microsoft--could also reformat their Web video for availability on MSN TV 2 by its launch.

Microsoft, which holds roughly a 10 percent stake in CinemaNow, partnered with the on-demand movie site more than a year ago to allow customers of its Media Center PC to stream movies to the television. While the companies have not disclosed usage of the Web-to-TV service to date, they both say demand is growing for such applications and that the MSN TV 2 will open consumers up to a lower-priced product.

The set-top box costs $199, with a monthly service fee of $9.95, without broadband access. In contrast, a Media Center PC can cost from several hundred dollars to more than $1,000.

"The cost (of the new service) is much easier for the masses, and it's easy to use to find the Internet," said Bruce Eisen, executive vice president at CinemaNow.

CinemaNow lets people rent from a library of more than 1,500 movies for about $3 a film. The company has similar deals to distribute its films through Creative Arts' handheld devices and KISS' network DVD device.