Sundance Channel launches video-on-demand service

Actor and Sundance Channel founder Robert Redford attends the Sundance Channel 10th anniversary party in Park City, Utah, January 24, 2006.

LOS ANGELES (Reuters) - Cable television's Sundance Channel on Monday unveiled a video-on-demand service offering documentaries and international films endorsed by Sundance festival founder Robert Redford and often available the same day the movies hit theaters.

Sundance Selects will make its debut on August 26 with Spike Lee's new documentary, "Passing Strange: The Movie." The service will be available on cable TV systems owned by three major operators -- Comcast Corp, Cox Communications and Cablevision Systems Corp -- reaching as many as 50 million U.S. households.

For Sundance Channel, which plays films and shows aimed at art-house and independent film fans and is owned by Cablevision unit Rainbow Media Holdings, a video-on-demand service provides new revenues in a growing business arena.

And indie movie fans who live in smaller cities or towns that may not have art houses can now access documentaries and foreign language films they only hear about from media coverage of festivals like Sundance.

"At Sundance, increasing the size of the market for independent film has always been our mission, in addition to just giving exposure to new voices, so this allows us to electronically take that vision to a broader group," Redford told Reuters.

The actor, filmmaker and creative director of the Sundance Channel said he would be instrumental in helping program the films that will be available on Sundance Selects.

"Passing Strange: The Movie," which premiered at the 2009 Sundance festival, captures on film the Broadway musical of the same name that tells of a young black man finding his way in life.

The service will launch with five other titles: animated film "Mary and Max" from Australian director Adam Elliot; "Unmade Beds" from Alexis Dos Santos; and documentaries "Complete History of My Sexual Failures," "Kassim the Dream" and "Nick Nolte: No Exit."

The number of titles will increase as the service reaches more homes, and the focus on nonfiction and foreign-language films is designed to tap an underserved market, Rainbow Chief Executive Joshua Sapan said.

"We think feature documentaries and world cinema are important parts of the landscape and ones that are underattended and undervalued," Sapan said.

He declined to give revenue forecasts, but the demand and use of VOD is rising with the deployment of new high-speed cable systems and sophisticated set-top boxes.

VOD transactions increased 20 percent from 2007 to 2008, and while the rate of growth slipped in the first six months of 2009, the increase was still 12 percent over the year-earlier period, according to industry tracker Rentrak Corp.

"I do see a time in the not too distant future when VOD sales for films like these dramatically surpasses theatrical revenue," Sapan said, "and some of these movies will be released with VOD only."

(Editing by Lisa Von Ahn)