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Intel, the world's largest semiconductor maker, on Wednesday said it was investing in a start-up company formed by Oscar-winning actor Morgan Freeman that aims to distribute premium movies directly to consumers over the internet.

The new company, called ClickStar, aims to release movies over the internet before they are available on DVD format and possibly while they are still being shown in theaters, said an Intel spokesman.

None of the major studios have yet signed on with ClickStar, but the new company - buoyed by Intel's clout and Mr Freeman's reputation – would likely increase pressure on Hollywood studios to adapt their distribution models to the digital era.

The major movie studios have a long established sequence of windows for releasing motion pictures, from box office to DVD and television rights.

But the digitisation of content - which has made it very easy for internet pirates to steal, copy and share movies via cyberspace - has put pressure on movie studios to make changes to the way they dsitrbute movies.

Some studio executives have expressed concern that collapsing these windows would shrink their total revenues and they were also reluctant to upset crucial relationships with theatre exhibitors and retailers that sell DVDs. But backers said that delivering movies quickly and securely over the internet to fee-paying customers would likely reduce piracy.

"Our goal is to deliver first-run premium entertainment to film fans around the world and to make film easier to buy than to pirate," Mr Freeman, who announced the company at the Allen & Company Sun Valley Conference in Idaho.

Nizar Allibhoy, the former Sony Pictures executive who will run ClickStar, said his company would initially focus on distributing independently produced and financed films as opposed to the $100m blockbusters that dominate the industry. But he said ClickStar would also pitch the distribution method to larger studios.

ClickStar, which aims to launch in early 2006, said it was working with top artists, producers and distribution companies worldwide to build a compelling slate of exciting films that would be available in theaters as well as online.

Intel would not disclose how much it was investing in ClickStar, but the investment fits with the chipmaker's effort to increase microprocessor sales by promoting the PC has the key home entertainment device on which consumers can watch movies, listen to music and play games.

The major studios joined together to form a consortium known as Movie Link, but consumers have complained that the online movie service offers a limited selection of second run movies.

Demand for online movie distribution is expected to rapidly grow in the next few years as compression technologies improve and more consumers get broadband internet access, two key changes that will increase the speed at which movies can be downloaded from cyberspace.

Copyright The Financial Times Limited 2019. All rights reserved.

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