Paramount Picture's recent decision to cut loose Tom Cruise may be just the opening salvo in an upcoming battle between Hollywood studios and high-priced, high maintenance celebs. While overall movie receipt totals for this summer were up, the increase was driven by higher ticket prices, not increased attendance. Moviegoers are increasingly likely to be videoviewers instead. More than 1 million viewers have downloaded the video clip of a young man mixing Diet Coke with a mint and spewing the resulting concoction out of his mouth. Even more odd, 400,000 viewers have downloaded a clip of rabbits munching on vegetation.

Memo to viewers: GET LIVES! Seeing this image on the wall, AOL's strategy to become a premier video viewing destination begins to make a great deal of sense.

Movie production costs continue to skyrocket, with no assurance that money spent on production will be recouped at the theatres. By contrast, the number of no or low-cost video and video clips grows exponentially every week. As well, hundreds of hours of TV programming and thousands of movie titles are added to an increasing number of video-on-demand channels. With its recent purchase of GameDaily, Userplane and Truevo, AOL Video is moving to capture audience eyeballs. AOL also concluded a deal to distribute movie titles from 20th Century Fox, Sony Pictures Home Entertainment, Universal Pictures and Warner Brothers Home Entertainment Group.

Currently, AOL's business model allows viewers to access some ad-supported TV programming on demand free of charge. AOL plans to charge $9.99-$19.99 per movie download. For this fee, howwver, viewers will NOT own the movie. Purchasers may not burn the movie onto a DVD, though the movie may be played repeatedly over a period of days on several different Windows-supported devices. It remains to be seen whether consumers wil pay this fee for short-term ownership only.