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DVDs have changed the way we watch movies, but they're not perfect. To watch one, you have to plan ahead, drive to a store to pick up a copy or go online (and wait for the mail carrier) to rent it from Netflix. That will change, says Sony Pictures Digital president Yair Landau, as cinephiles begin downloading movies over broadband Internet connections, just as music lovers now download MP3s. He told NEWSWEEK's Daniel McGinn how the advent of online movies will change the film industry.

MCGINN: Is there currently a legal way for people to download movies?

LANDAU: We started a legal download-movie service called Movielink several years ago. It's got five studios as partners, but right now it's strictly a rental service. Prices range from $1.99 to $4.99, and you can watch the movie for 24 hours on your PC. We've had limited success thus far. On a consumer-experience basis, it's not as easy or compelling as getting a DVD mailed to you. Right now, my hat's off to Netflix for recognizing the current limitations of Internet technology and really offering people the broadest means of accessing content. When you are able to start downloading and burning your own legitimate DVDs, hopefully sometime next year, I think that will be the next big breakthrough. But ultimately it shouldn't matter to you as a consumer whether you download it online, download it from a satellite or buy a DVD--you'll own a copy of the movie and you'll watch it as you see fit.

People have gotten used to paying 99 cents to download a song. What will downloadable movies cost?

It's a harder question to answer. People seem to think a DVD is a fair value at $20. So if you could do everything with a downloaded digital copy you could do with a DVD, I'd say $20 is the right price. But the missing piece is the usage rules: Apple's iTunes service not only defined the 99-cent price point, it also defined the usage rules, such as how many copies of a song you're allowed to make. The other variable is the quality: should you pay more for a high-definition copy of a movie? In music, it went the other way--an MP3 is lower quality than a CD, and the audience doesn't care. For movies I think visual fidelity is so critical to the experience that I don't see people saying "I don't care about high def." But ultimately I think you should be able to download a catalog movie product--an older title--for $9.99 in standard DVD format.

What has Hollywood learned from the music industry, which spent years fighting illegal downloading instead of making it easy for consumers to do it legally?

I think the big lesson is, you have to accept that technology empowers the consumer, and you have to adapt to that and really respond to what they're telling you. In music, consumers said, "I want to buy individual songs." In the case of movies, we're not getting resistance to the value proposition--people aren't saying they think DVDs are overpriced. People are saying "I want to watch the movie sooner." The question is, how do we as an industry respond without compromising the overall moviegoing experience?

It took a hardware innovation--the iPod--to get a lot of people excited about downloading music. Will it require a new gizmo to make people enthusiastic about downloading films?

PlayStation Portable, the gaming system introduced earlier this year, has become really popular for portable movie viewing. With legitimate networked downloading and burning, people will basically be porting movies to memory sticks and downloading them directly to their PSPs fairly regularly.

The other thing that's really caught me by surprise is mobile video. I used to say nobody wants to watch a movie on their cell phone, and I was wrong. We started selling copies of movies on memory sticks for watching movies on cell phones in the United Kingdom several months ago. We sold out in one month. I'm constantly surprised by people's desire to watch movies anywhere, any time. The whole nature of movie consumption among the younger, networked generation is much different than their parents'. That's going to start impacting the way movies are made and other distribution patterns. But it will take time--it won't happen tomorrow.