Coming to a computer near you: the online video devised to beat pirates

With memories still fresh of the music industry's battle to stop Napster and other rogue music-swapping services on the internet, five of Hollywood's leading studios have announced a joint initiative to create a pay-per-view online video system that they hope will pre-empt the pirates.

The initiative, led by Sony, has been in the works for several months and a fledgling service is expected to be offered to consumers as early as next year. Computer users will be able to scan lists of the films on offer, watch previews and then order the movie of their choice for about $4 (£2.75), which is somewhere between the price of a traditional video rental and a pay-per-view service on cable television.

Depending on the computer's transmission speed, downloads will take anywhere from 40 minutes to four hours. The film will then sit on the computer's hard drive for up to 30 days; once the downloaded file is opened for viewing it will disappear within 24 hours.

Sony, which owns Columbia Pictures, talked to all the major Hollywood players about the venture. For the moment, the five on board are Sony, MGM, Paramount, Universal and Warner Brothers. The two prominent absentees, Disney and Fox, are believed to be working on their own rival video-on-demand system.

Since broadband internet transmission is still in its infancy, particularly on home computers, the new service – which has no title yet except for the working codename "MovieFly" – is not expected to be a money-spinner at first. The hope, however, is to have a solid legal structure in place before a video version of Napster could come along to distribute uncopyrighted video over the internet for free.

Jack Valenti, Hollywood's leading lobbyist and the president of the Motion Picture Association of America, said in a statement: "In a very near future, a broad selection of motion pictures will be available online, protected by encryption and delivered directly to consumers at a reasonable price ... great news."

As reported last week in The Independent, online piracy is already rampant in the film industry, with everything from daily rushes to marketing memos being leaked from the studios. Industry estimates suggest as many as 400,000 pirate copies of films are in circulation on the internet.