DirecTV and Comcast and their studio partners are heading toward collapsing the VOD window to 60 days after theater release, sparking the ire of theater owners. But it may be a lot of aggravation for minimal gain.
At the price that’s been floated – $30 per film – demand for so-called premium video on demand (pVOD) is unlikely to justify the effort, at least according to The Diffusion Group (TDG).
TDG said it examined likely pVOD demand at four premium points, including $5, $10, $15 and $20 above standard rentals fees. When asked of their willingness to pay a $20 premium (meaning $25 in total cost) for a same-day rental, only 8 percent of consumers are highly likely to rent the title.
On the other hand, 21 percent are highly likely to spend an extra $5 for a same-day rental, suggesting that, while they may see the general value of early rental releases, consumers are unlikely to pay the more sizable premiums currently under consideration.
“The tactical terrain between theatrical debut and the 90-day rental horizon is vast,” said Greeson, “so the industry has a variety of timing and pricing options available. And, yes, the 60-day model may have a future, but not at these price points.”
Warner Bros., Sony, Universal and 20th Century Fox are planning to participate in the “Home Premiere” premium VOD service.
Furthermore, the number and nature of the films available might also be limited, given comments by an exec from Fox, published in The New York Times.
Jim Gianopulos, co-chairman of Fox Filmed Entertainment, said: “This is not going to be every film. It’s going to be pretty much a niche offering.”
“127 Hours” was the example he gave. It was in contention for several Oscars but grossed only $18 million during its run in theaters.
