Sony, Warner Bros. and Disney Planning $30 Video-on-Demand Service

     September 27, 2010


How much is the window closing between a film’s theatrical release and home-entertainment release and how much are consumers willing to pay to close it?  That’s the question Sony Pictures, Warner Bros., and Disney are currently trying to figure out.  Bloomberg reports [via THR] that the studios are in talks with cable operators to offer new-ish release films for as much as $30 after their theatrical release but before their home-video release.  While that seems awfully steep, keep in mind that a family of four would spend an average of $40 total to go to the theater to see a movie.

Hit the jump for more on this current trend of studios cutting down the theatrical release window.

While I think a $30 price-point (which isn’t official) is too high, studios are certainly trying to get their movies out of theaters as fast as possible.  The release window between theatrical and home release is shrinking from four to three months.  Most movies don’t have “legs” at the box office and it’s all about scoring the biggest weekend opening.  Of course, there are exceptions.  Inception held the #1 spot for several weeks and How to Train Your Dragon actually reclaimed the #1 spot a month after its original release.  But for the most part, box office on a film drops by half every week, so you can understand why studios are rushing to get their movies to the home-entertainment market.

Of course, consumers probably want that window closed as well.  Ticket prices continue to climb, but service remains low as patrons are forced to put up with a gluttony of ads before the film and rude audience members who never learned how to behave at a theater.

And then there’s the problem of piracy, which I don’t know how you combat, but that $30 price point isn’t going to dissuade people.   Of course, there’s no way to compete with “free”, but I do believe there’s a price point where people will VOD new movies in exchange for staying in the comfort of their own home.  Smaller studios have already been playing the same-day-as-theater game, but I don’t know how financially successful they’ve been with that strategy.  Also, the way a smaller movie makes money is different than the blockbuster fare Sony, WB, and Disney are most likely considering.

Sound off in the comments about how much you would pay to VOD a new wide-release movie.

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