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TK's MORNING BUZZ: Most Major Studios Will Take Part in a Day-and-Date VOD Test This Year

16 Feb, 2001 By: Thomas K. Arnold

In the growing frenzy over video-on-demand, the cable camp and the Internet camp are finding plenty of support among the Hollywood studios -- not to replace the packaged media channel, but to augment it under the premise that continued fractionalization of home viewing will only lead to a bigger pie.

Universal's willingness to fork over VOD rights to Blockbuster in return for a revenue-sharing deal they can live with is just the latest in a series of steps the studios have taken to test the waters. No one knows how things are going to shake out, and yet no one wants to be left behind.

That's why you've got two separate camps -- those who believe cable is the best way to deliver video-on-demand into the home, and those who favor the Internet -- that in truth are working together more than anyone might imagine.

Cross-pollination is the name of the game when it comes to VOD, and thus you have Warner Bros. very likely licensing its movies to Sony for Internet downloading and Sony's Columbia TriStar unit very likely licensing its films to Time Warner Cable for future VOD "rollouts."

The one thing that hasn't happened is something that certainly will: a day-and-date release test with home video, something that's been on the books on more than one occasion but in each case fell through at the last minute when word leaked out and participating studios got cold feet.

Up to now, the studios have faced a most complex dilemma. On the one hand, they don't want to participate in a day-and-date test because they know that would surely provoke an uproar among their video retail clients -- and uproars, if they are loud and furious enough, could lead to lower sales as a form of "punishment." But on the other hand, none of these VOD tests are truly viable unless they are day-and-date. Anything short of that and you're comparing the proverbial apples with oranges.

This year, I predict this situation will change. By the end of the year, most if not all of the major studios will have participated in a day-and-date VOD test in some market or markets, either cable or the Internet or very likely both. They're going to try to keep it a secret, which of course they won't be able to do. But this time, when word leaks out they will put their best spin-control foot forward, hoping to minimize the consequences but willing to suffer them regardless.

It's all in the name of progress, you see. I bet it will happen, and so should you.

Comments? Contact TK directly at:TKArnold@aol.com

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