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Casanova says that Apple has offered one 90-minute TV movie, High School Musical, from the Disney Channel, which sold well. But, as with all video content that it currently sells, the movie was formatted for the video iPod (at 320 by 240 pixels of resolution).

Some viewers don’t mind watching movies on a tiny screen. “I travel a lot, and see people watching movies on their [Sony] PSPs,” Casanova says. (Sony sells movies for the PlayStation Portable on a proprietary Universal Media Disc format, avoiding the need to download large files.) But watching the same low-resolution file on a 30-inch TV or computer monitor is not a pleasant experience, he admits.

“Personally, I think that people can see differences in video quality before they hear differences in sound quality,” says Joseph Fahs, an online content producer in Los Angeles. “I think people who are used to DVDs will more easily notice the change in quality in downloads” if a provider such as Apple offered only reduced-resolution movies to save on download times and bandwidth usage.

Companies such as CinemaNow and Movielink are already selling downloadable movies over the Internet, deciding that they’ve achieved a workable combination of picture quality, download time, and anti-piracy technology. And just this week Warner Bros. began selling full-length films at Guba, a San Francisco-based video-sharing site.

CinemaNow president Bruce Eison says bandwidth isn’t a show-stopping problem. The company offers movies from Sony, Warner Bros., and other studios that are “right below DVD” quality and can be downloaded in an hour to an hour and a half, he says.

Yet CinemaNow’s own literature states its movies are encoded at rates of 1,200-1,500 kilobits per second – far below the approximately 7 megabits per second for DVD quality. (H.264 can deliver DVD quality at around 2 to 3 megabits per second.) The upside, however, is that lower bandwidth requirements mean that CinemaNow can stream its movies, so users with a constant Internet connection and DSL or cable modems can watch them as they download.

Eventually, larger digital video providers like Apple may find a compromise by using an encoding scheme that produces a picture of acceptable quality yet doesn’t tax customers’ patience at download time. The exact method may depend on the medium or the content; consumers are likely to be less particular about visual quality watching a TV show like “My Name is Earl” than Star Wars.

Michael Gartenberg, vice president and research director for Jupiter Research, believes that the technical hurdles with selling downloadable movies are minor. “The remaining technical issues have to do with details,” he says, such as choosing resolution and compression standards for downloads, Gartenberg says. “It’s attention to details that made it work for Apple and the iPod.”

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