Digital entertainment took an evolutionary leap Thursday when AOL disclosed agreements with four major studios to offer downloaded movies and on-demand television from a single Internet portal.

Sony Pictures Home Entertainment, 20th Century Fox, Universal Pictures and Warner Bros. Home Entertainment Group will offer downloadable movies through AOL Video, including such titles as "Hitch," "Spider-Man 2," "Batman Forever," "The Matrix," "American Pie" and "Doctor Dolittle."

AOL executive vp Kevin Conroy said the deals were fulfilling the Internet's promise as a platform for new entertainment opportunities.

"I personally see this as a particularly important milestone, not only for the online video marketplace but also for AOL," he said. "Consumers will see that they have more choice -- easier to find, on-demand, enjoyable to consume entertainment."

Prices will range from $9.99-$19.99 for movies that can be viewed on as many as five computers and compatible devices but not played on traditional DVD players. Conroy said the content owners determined the rules and that AOL could support anything the studios wished to offer.

Warner Bros. Digital Distribution Group senior vp Jim Wuthrich said putting this content with AOL was an opportunity to grow the market and reach the average consumer.

"Putting a player like AOL into the marketplace is clearly going into the mainstream," he said. "AOL is very consumer-friendly and will encourage people to give it a try. It's a great fit within our overall digital distribution strategy of providing access to our content through the widest possible selection of platforms and devices."

Warners already has a strong relationship with AOL through the In2TV online television service and elsewhere.

"Partnering with digital powerhouse AOL further underscores NBC Universal's steadfast commitment to harnessing new opportunities and providing the most discerning consumers with legitimate and appealing options for purchasing and enjoying our content electronically," Universal Studios Home Entertainment president Craig Kornblau said. "This collaboration marks another important step in advancing our digital initiatives as we continue to aggressively seek out new technologies and forge critical paths in the digital arena."

AOL Video also is extending its television programming. Fox Entertainment Group and Sony Pictures Home Entertainment content will be available in branded VOD channels and added to the AOL Video portal's online interactive programming guide, which aggregates ad-supported, free and download-to-own video content.

Conroy said additional branded channels will launch before year's end. There already are about 50 channels as part of the service, and consumers also can create their own personal playlists.

Sony will have two channels at first, with such shows as "Charlie's Angels," "Starsky & Hutch," "Who's the Boss," "Action" and "NewsRadio."

SPHE digital distribution and acquisitions president Benjamin Feingold said "packaged media will remain king" but that digital options definitely were becoming more mainstream.

"Online programming services like AOL's video portal have the potential to become a major distribution stream for consumer entertainment and a viable revenue source for Hollywood," he said. "Clearly the Web has unlimited shelf space, and people will know that AOL is a destination for content."

Sony's channels will not include current television shows at this time because some relevant issues were still "a conversation between all the financial partners."

Fox has initial plans for five channels, ranging from such current shows as "24" and "Prison Break" to library content including "Hill Street Blues" and "Buffy the Vampire Slayer."

"We are eager to continue to develop the market for digital downloads by applying our premium content to one of the Web's strongest brands," Fox Digital Media president Peter Levinsohn said. "AOL's wide usage will increase our ability to get Fox's electronically delivered movie and TV product in front of a huge number of consumers."

Conroy said he looked forward to the future of the online video space now that a significant number of households have broadband and a growing percentage are linking their computer to their television.

"I'm quite certain that the business models will continue to evolve," he said. "The good news is that we have two good business models today -- ad-supported and premium downloads -- that provide incentives for content owners and distributors to do this now."

CinemaNow and Movielink already offer a library of movies available for download, but Conroy said integration throughout AOL provided "lots of windows through which people can look to find what they're interested in."

News Corp. also has an initiative to offer downloadable movies and TV shows throughout the Fox Interactive Media family of online properties, starting at Direct2Drive but scheduled to extend to MySpace and elsewhere.

Shares of Time Warner initially spiked on the news Thursday, though finished the day fractionally lower at $16.43. In Friday trading, shares rose 3 cents to $16.46. Shares of the world's largest media conglomerate have remained basically unchanged for three years as Wall Street analysts continue to express concern for the prospects of its AOL unit.