Warner Bros., Sony, Universal, and 20th Century Fox to Launch Premium VOD Service Next Month

     March 31, 2011

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Next month, Warner Bros., Sony, Universal, and 20th Century Fox are set to launch “Home Premiere”, a premium VOD service that will offer movies for home viewing only two months after their theatrical debut.  Variety reports that movies on the service will cost up to $30 for a two-to-three day viewing period and the service will launch exclusively on DirecTV.  Certain cable companies will introduce Home Premiere to certain cities for an undisclosed period of time around the end of April.

Warner Bros. plans to launch with Unknown while Sony’s first premium VOD title will be Just Go With It.  However, plans could change closer to launch.  Studios also don’t plan to release films to the Home Premiere service if they’re still doing well in theaters.  Hit the jump for my thoughts on this new service.

movie-theater-01I have mixed feelings on premium VOD.  On the one hand, I think it’s great for parents who would have to spend more money to take their kids to see a film or if parents want to go out on their own, they have to pay a babysitter.  Then there’s the added cost of concessions, and that $30 price tag for a movie you can play at your convenience seems like a bargain.

But it’s telling that a service like this could only prosper when the experience of going to the movies is so miserable.  I usually see movies at screenings so there’s security and I don’t have to worry about people talking or texting on their phones.  But outside that environment, it’s Thunderdome.  Awful parents will drag their young kids to a midnight screening of Crank 2 and people confuse the theater with their home and have no sense of courtesy.  Theater chains like Regal and AMC are trying to make up for dwindling audiences by raising the price of tickets, but with no added benefit to the actual movie-going experience.  3D is also being used as a draw, but as prices for 3DTVs become more consumer-friendly, eventually that gimmick will also fail to draw in audiences.

I like movie theaters and I like the communal experience of watching a movie.  Unfortunately, I believe movie theaters will be left to twist in the wind and their only solution will be what it’s always been: raise the price of tickets and concessions.  There won’t be any attempts to innovate or to enrich the experience of watching a movie.  And the effect of raising ticket prices will only push consumers back to home where the studios will raise the price of premium-VOD but not as high as the cost of an actual movie ticket.

Keep in mind, the window to release on DVD and Blu-ray is also shrinking so consumers, having already waited two months to see a movie, may just wait an extra month and spend less than $30 to own a movie rather than rent it.

Maybe I’m just being overly pessimistic and I’m curious to see how this all shakes out.  But judging the landscape from today, I think theater-owners have cause to be concerned and need to do some serious consideration of their current business model.

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