Time Warner sells movies online - its just the beginning!

Time Warner Inc.'s Warner Bros. has made a deal to distribute movies and TV shows online via Guba's search engine and video-sharing community, Guba.com, in one of the first moves by a major studio to embrace user-generated content. Gube is a small but potentially powerful competitor to YouTube and MySpace.

Until yesterday, Guba displayed videos submitted mostly by amateurs, along with some professionally created material such as music videos posted illegally on the site. Now, the site will sell movies such as "Harry Potter and the Goblet of Fire" along with TV shows such as "Babylon 5."

This move proves that the studios are embracing small rollouts of movies over the Internet. Once they feel comfortable that launches such as this one with Guba work, then they will embrace the prime time distributing movies through Google Video, Yahoo Movies, MSN Movies, iTunes and MySpace.

Expect deals with all the above sites to distribute online Hollywood movies within 12 months.