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Window on VOD Still Cloudy

31 Jan, 2006 By: Stephanie Prange

Since my first week at this publication (then Video Store Magazine) in 1993, video-on-demand proponents have been sounding the death knell of packaged media.

That first week, Bell Atlantic chairman and CEO and VOD proponent Raymond Smith said in our pages that the video store model was “no longer viable.” Soon after, his multibillion-dollar merger with TCI was dead, and rental came back. Certainly, the rental business is under fire today, but it took another decade for that to happen.

Now, the sellthrough DVD business is maturing, and the VOD saber rattlers are at it again, trying to grab a bigger piece of the entertainment pie.

The Apple video iPod and its download service for certain first-run TV shows was a watershed development, according to VOD backers. It “lit a fire under the studios,” Curt Marvis, CEO of Web VOD service CinemaNow, told me at the recent Consumer Electronics Show in Las Vegas, calling it an “important catalyst.”

Online behemoth Google, too, caused a stir with the announcement of its new Video Store, offering content from TV shows, certain features and other video.

Just last week, IFC Entertainment announced the launch of IFC's First Take, which will distribute independent films theatrically and via cable on-demand simultaneously. That breaks the long-held practice of giving DVD a better window than VOD.

This follows the much-publicized push by 2929 Entertainment's Todd Wagner and Mark Cuban to release films simultaneously through all channels, including DVD. The first such release, Steven Soderbergh's Bubble, debuted Jan. 27.

While these are all steps toward a VOD future, just how significant are they? Google's biggest feature at launch was the indie Waterborne. IFC's deal also features indie films. Bubble is perhaps the highest profile release, but it's not exactly a studio blockbuster.

When the studios are willing to give away their first-run films to VOD services in a decent window, packaged media may finally face a big threat. But until then, it looks like the VOD lobby may just be crying wolf once again.

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