Sony to Offer On-Demand DVDs24 Jan, 2008 By: Erik Gruenwedel
Sony Pictures Home Entertainment (SPHE) Jan. 24 became the first major studio to offer select catalog titles for production and distribution through Hewlett-Packard's (HP) manufactured-on-demand (MOD) DVD service.
Financial terms of the license deal and names of the pertinent catalog titles, which include from 75 to 200 movies, were not disclosed.
HP separately has 40 DVD license deals for about 5,000 titles with Arts Alliance America, First Look Studios, Gaiam Americas Inc., Nelvana Enterprises, Venevision International Films LLC, Vanguard Cinema, TLA Releasing and Wolfe Video LLC.
HP Video Merchant Services allows retailers to produce and sell on-demand DVDs and limited edition discs at a fraction of the cost to traditionally produce a DVD.
The service is seen as a means of affording smaller content holders packaged media distribution direct to the consumer or retail.
David Bishop, president of SPHE, said the agreement affords the studio a means of delivering a broader range of niche and library titles more economically to consumers.
'We know there is strong consumer demand for these titles, and by working with HP, we may now monetize our deep product library … without a significant investment in inventory,' Bishop said.
Doug Warner, VP of content services with HP, said MOD represented an expanded effort to help studios monetize content in the marketplace by bringing the computer giant's transformational expertise to the supply chain.
'We went into MOD to increase efficiencies for DVD content companies to get product to market and bypass inventory issues,' Warner said.
Retail chain Trans World last year became the first company to use MOD. Consumers log onto Trans World's fye.com online store to place orders, which are processed and mailed within 24 hours.
Warner said internal studies of the home entertainment industry found that a sizable percentage of studio catalog fare offered by distributors was not actually available in physical form due to replication costs associated with limited production runs.
'It is not just a issue of producing and cost, it is an issue of timing,' he said. 'MOD is closing the gap and monetizing the catalog.'
Warner said HP is exploring offering MOD for Blu-ray and HD DVD but will continue to focus on standard DVD and catalog fare.
'There are pragmatic challenges to HD production,' he said. 'It's a ways off in the future.'