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Shorter Release Windows Boost Movies On Demand

3 May, 2004 By: Holly J. Wagner

Movies on demand (MOD) orders have surpassed pay-per-view (PPV) movie orders on In Demand Network, the network announced at the National Cable and Telecommunications Association (NCTA)'s The National Show.

According to iND research, December 2003 was the first month in which there were more movie orders via MOD than PPV.

“The evidence is overwhelming that early windows lead to increased MOD sales and can grow the pie for everyone, except for maybe the local video store rental company,” said In Demand president and CEO Steve Brenner. “We know that once consumers try VOD, they become less inclined to head out to the video store again to rent a movie.”

Titles with 30-day windows have averaged almost double the buy rates of titles with longer release dates, with average monthly VOD buy rates up 70 percent from 2002. In 2003, the studios released a record 14 titles with windows of 30 days or less compared to three such titles in 2002. Two of the top five and four of the top 20 performing titles in 2003 had 30-day windows.

Thus far in 2004, iND already has exceeded the early-window total for all of 2003. Currently, iND has licensed 20 titles with windows 30 days or less for just the first six months of the year.

While it wasn't until the end of the year that VOD closed the gap with PPV in terms of the actual number of orders, the buy rates (the percentage of VOD-enabled households ordering at least one movie) were still considerably higher for VOD throughout 2003 than for PPV. The only reason the VOD actual orders were less was because PPV still has nearly three times the number of total homes than VOD, according to the company, which has been marketing VOD for just a few years and was offering it in major markets like New York and Philadelphia until the beginning of last year.

“We started out the year as a pay-per-view business and ended it as a VOD business,” Brenner said. “Better still, the transformation of the business that began in the fourth quarter of 2003 has continued and accelerated through the first few months of 2004.”

Cable VOD deployments also reached the tipping point in 2003, with more than 10 million users at year-end in 17 of the top 25 markets, including New York, Los Angeles, Boston and Philadelphia. The iND total VOD universe is about 10 million homes, based on an affiliate base that includes Comcast, Cox, Time Warner, Bright House and Adelphia. Factoring in those cable companies not served by iND (for example, Cablevision and Charter) the total number of cable VOD homes industrywide is estimated at 12 million.

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