The effort will offer a new path for Hollywood studios to generate revenue from films after they leave theaters. For Comcast subscribers, it provides a way to purchase movies they can watch anytime on through a TV, computer or mobile devices.
The new service could start by the end of the year with a range of new releases, older movies and some TV shows from several Hollywood studios, one of the people said.
Customers will be able to buy the titles through the on-demand menu accessible with a Comcast set-top box, or on the Xfinity website, the person said. Once purchased, the movies will be watchable on TV, a computer or mobile devices.
Some of the movies for sale will come from Comcast-owned Universal Pictures, including this year's hit's "Fast & Furious 6" and "Despicable Me 2," according to one of the sources.
A Comcast spokeswoman declined to comment.
Now, Comcast and other cable operators offer on-demand movies for free viewing or rental to watch during a specific time period. Another pay TV operator, Verizon's fiber-based Fios service, sells and rents films digitally.
Movie studio executives are looking to boost digital sales as customers move away from purchases of traditional DVDs, cutting a lucrative source of revenue.
Through the first nine months of 2013, sales of packaged goods including DVD and Blu-ray discs dropped 7 percent from a year earlier to $5.0 billion, according to the industry-backed Digital Entertainment Group.
At the same time, digital sales reached $764.5 million, a 48.9 percent jump from a year earlier.
Spokespeople at Hollywood studios, including 20th Century Fox, Viacom Inc's Paramount Pictures and Lions Gate Entertainment, declined to comment. A spokesman for Time Warner Inc's Warner Bros. referred questions to Comcast. A Walt Disney Co spokeswoman had no immediate comment.
Movie sales through Comcast would give studios a chance to reach the roughly 20 million households that subscribe to the company's digital service.
Some studios including "Hunger Games" producer Lions Gate have offered certain titles for sale in digital formats before physical DVDs, a move to entice consumers to embrace online technology for watching films.
Last week, Lions Gate CEO Jon Feltheimer told Wall Street analysts he was expecting at least one major pay TV operator, which he did not name, to announce in the coming weeks that it would offer digital movie sales.
"When that happens, it's really going to open up amazing opportunities," Feltheimer said on a conference call.
© Thomson Reuters 2013
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