Fox Cool to Premium VOD9 Nov, 2010 By: Erik Gruenwedel
Don’t expect 20th Century Fox Studios to expedite access to premium video-on-demand (VOD) — Hollywood’s newest marketing effort aimed at generating higher margins from consumers willing to pay extra to watch select theatrical releases early in the home.
Speaking Nov. 8 at the “Battle for the Digital Home” media conference in West Hollywood, Calif., Peter Levinsohn, president of new media and digital distribution at Fox Filmed Entertainment, characterized premium VOD as the “slowest product rollout” he’d ever seen.
Specifically, Levinsohn said myriad challenges remain regarding premium VOD content, including pricing (estimates range from $25 to $50), titles and technologies involved, and possible impact to theatre operators.
“I’m not sure we want to go out with one distribution platform alone,” Levinsohn told paidContent.com. “You don’t want to go far up against theatrical and [negatively] impact that business.”
Warner Bros. Home Entertainment Group, spearheaded by president Kevin Tsujihara and Time Warner CEO Jeff Bewkes, expects to begin offering premium VOD content by the second quarter next year. Warner was instrumental in launching transactional VOD day-and-date with new-release packaged media — a strategy many at the time felt would cannibalize sellthrough.
Bewkes, in a financial call Nov. 3, reiterated that transactional VOD has had little effect on sellthrough, while generating margins (75%) far higher than physical disc rentals.
“It’s just about trying to find the right window at the right prices,” Bewkes said.
In a 2006 interview with Home Media Magazine, Tsujihara argued against maintaining artificial time barriers erected in home entertainment between new-release packaged media and digital distribution.
“We have a 30-day or 45-day lag between when [a consumer] can go get it at Blockbuster vs. when they can get it from their cable company or satellite operator,” Tsujihara said. “It's the same transaction. So working from the consumer's perspective, I'm not sure why that makes sense.”
Indeed, attempts to roll out transactional VOD content in the United Kingdom have heretofore reportedly produced mixed results. Media companies there are increasingly focusing on subscription-based VOD rather than pay-per-view in an effort to capture 40% of the packaged media market that is transitioning to digital distribution.