Film88 runs on a video-store model, letting people "rent" movies for three days in return for a payment of $1 to $1.50. The movies cannot be saved to a hard drive or downloaded. It offers a range of top releases including "The Scorpion King" and "Star Wars." But the film archive lacks popular features such as "American Beauty" and "Lord of the Rings." Viewers are limited to watching movies in a small box on their computer screens, using RealNetworks' RealOne media player. Video accessed in a test was sharp, although there were some glitches. Viewers can pause, fast-forward and rewind movies, although resuming play took several minutes as the movie caught up. Film88's Hami said the site does not have many users because it has just launched. According to registration records on VeriSign, which runs the .com top-level domain, the site was registered 18 April. Hami said the company is working out a reasonable percentage of film rentals, between 25 percent and 30 percent, to pay the copyright owners in the Unites States and elsewhere. "We are still working on the fair percentage," he said. "The Internet economy is very different, and if we price our rental more than $1, there may not be good response. So, we are going for volume." Sites such as Film88 could undermine Hollywood's own Internet distribution plans, which have been taking shape slowly. Consumers can buy and rent movies over the Internet for viewing on a computer from a handful of legal commercial services, including Intertainer and CinemaNow. But for now, the major studios are focusing on cable and satellite services linked to television, rather than Internet services, to distribute their products. Video-on-demand services with support from the top film distributors, such as MovieLink, are expected to introduce services later this year. But those efforts have run into difficulties. Regulators have been looking into the studios' planned Internet distribution partnerships, and News Corp.'s 20th Century Fox studio earlier this year pulled out of a joint venture with Walt Disney to create a video-on-demand service dubbed Movies.com. Copyright owners could seek to have the Film88 Web site shut down by asking the domain registrar -- US-based VeriSign -- to deactivate the address. But that solution would only offer a stopgap with no guarantee that the service would be kept off the Web permanently. In the event the domain-name registrar is served with legal papers to remove a site, it will comply, said VeriSign spokesman Brian O'Shaughnessy. But if a domain name is yanked, the site simply has to sign up for another one under a different registrar. This is typically the incentive for copyright holders to try to shut down the site at its source, the Web host. Hami said Film88 has learned from copyright experts that Iran does not protect foreign copyrights. Nevertheless, the company plans to abide by US laws, he said. "This is a new market for copyright owners which has not been fully exploited," he said. "This market is also not in competition with the conventional way of watching a movie in the cinema. We are not pirates, but a technology innovator trying to balance between innovation and copyright compensation." The MPAA's international counterpart, the Motion Picture Association (MPA) said it plans to stop illegal activity on Film88 but did not specify the actions it would take. "The MPA is aware that an Internet site called 'Film88.com' is offering to stream Hollywood movies to users for a fee. To the extent that the site infringes the copyright of any MPA member company, the MPA intends to take swift and immediate action to stop the illegal activity," the trade group said. "While the site claims to be located in areas outside the United States, the MPA has several legal options available prevent the site from distributing films without authorisation of the copyright owner."
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