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By Michael Kanellos, 9 January 2004 09:55

NEWS Actor Morgan Freeman's production company says that next year it will release a movie on the internet at the same time it film debuts in theatres, a move that could challenge others to follow suit.

The three-time Academy Award nominee and Lori McCreary, CEO of Freeman's Revelations Entertainment, predicted that releasing a film in this fashion will likely be a first and prod other studios to begin to use the net as a way to sell their products. The studio declined to give out the title of the movie but is slated to similarly release another film, 'Rendezvous for Rama', in the future.

"This is a lot like DVD. It was around for years but then one studio embraced it," McCreary said. "The same thing is going to happen with online distribution of film. It is not a matter of 'if' but who goes first."

Freeman, who joined Intel president Paul Otellini during Otellini's speech at the Consumer Electronics Show in Las Vegas, concurred and chided the entertainment industry for its approach to the internet.

Film studios "were a little slow on the uptake of the inevitable", Freeman said. Music producers, meanwhile, "wound up suing 12-year-olds".

Although tech companies and Hollywood have been at odds for years, Otellini said a thaw began in 2003. During his speech, executives from Disney, Sony Entertainment and other companies pledged via videotaped statements to cooperate with Intel and others in coming up with better standards for transferring entertainment over the web.

In several meetings over the past year, "we showed them [the film industry as a whole] that we are not about driving rampant piracy", Otellini said in an interview.

Intel is involved in the production of 'Rendezvous with Rama'.

Michael Kanellos writes for CNET News.com.