Even as the movie business has had yet another record breaking year at the box office, we still hear claims from Hollywood that online downloading of unauthorized movies is going to kill the movie business. And yet, where there's demand, new business models will be created. ethorad points us to the news that UK retail giant Tesco is getting into the business of producing movies itself based on the books of some very famous authors. The movies will be direct-to-DVD and direct-to-the-internet, but the idea is for Tesco to use these movies to generate more traffic to their stores (both online and off). In fact, if you look at the retail business, music and movies have long been used as a loss leader of sorts, to drive traffic to get them to buy other, much higher margin, goods. This is really an extension of that, but all the way to the point of helping to fund the production of the movie itself. Also, while it will have a window of exclusivity at the beginning, it sounds like Tesco is quite open to other stores selling the movie as well. Either way, it's interesting to see other third parties recognize that they benefit from having movies made, and thus are willing to partially fund the production of those movies.