Under the deal, Intertainer said it has secured rights to some of MGM's new releases as well as its 4,100 archive titles. The films will be available through Intertainer's broadband video-on-demand service, which can deliver content to both PCs and TV sets.
Studio licensing deals have been a significant hurdle for video-on-demand services. Analysts said the deal would give Intertainer a boost by expanding its available content.
"Whether it's a 99-cent feature or $1.99, (the MGM) deal is an important step for Intertainer, which is one video-on-demand start-up that has consistently announced growth over the last year," said Richard Doherty, director of research for The Envisioneering Group.
Still, Intertainer faces steep competition in its attempt to take a foothold in the video-on-demand market. Miramax-backed CinemaNow has also been in negotiations with the major studios, according to CEO Curt Marvis, but he declined to comment on whether a deal with MGM is imminent.
Unlike pay-per-view, which consumers must watch on a scheduled basis, video-on-demand lets people view a movie multiple times at their convenience as well as pause, rewind and fast-forward the service. Movies automatically time out when their "rental" periods end, preventing late fees that often plague people renting videos.
"MGM is always looking for new ways to build audiences for our new and classic library films," David Bishop, president of MGM Home Entertainment, said in a statement. "As part of that commitment, we often embrace new technologies early in their lifecycle in order to gain insights about consumer behavior and to maintain our competitive edge."
Last year, Intertainer secured rights to Universal Studios Pay-Per-View films, and it has struck pacts with broadband-network provider WinFirst and Liberate Technologies, which develops interactive TV software.