Home Entertainment Biz Talking Turmoil19 Oct, 2015 By: Stephanie Prange
Over the past month I’ve attended a couple of events designed to shed some light on the digital delivery business and its effect on content owner revenue and business models. The only conclusion I can come to is that it’s indeed the Wild West out there, as Vubiquity CEO Darcy Antonellis once noted to me. The rules are in flux, and no one has created the perfect model that will create revenue growth for the studios as the physical disc business melts.
“Is the current distribution model maximizing revenue?”; “Who profits from it?”; and “How is that revenue divided across the revenue chain?” were three salient questions put to the audience by industry veteran Mitch Singer at the Entertainment Merchants Association Digital Media Pipeline event Oct. 14. Singer, who moderated a panel, is president of the Digital Entertainment Content Ecosystem (DECE), which is the consortium around the buy-once-play-anywhere system UltraViolet, but he has also worked in the studio system at Sony. He queried fellow studio vet John Calkins about such window experiments as Paramount’s recent revenue-sharing scheme with theaters on VOD, as well as the day-and-date (some say forced) VOD and theatrical release of the controversial Seth Rogen film The Interview, which spawned a hacking attack on Sony. Did the studio maximize its revenue by releasing the title on VOD so early? Calkins expressed doubt.
“We’re all in this very complex ecosystem,” he said, adding that it’s hard to determine the revenue model with one title.
Fellow panelist Patrick Corcoran, VP and CCO of the National Association of Theater Owners (NATO), said that theater companies, which participate in that ecosystem, want to be consulted about window changes, which Paramount did in the rev-sharing scheme, though several chains opted not to participate. “Ubiquity and ease of use cheapens your product,” he said, warning about collapsing windows.
There is also a difference between the models for tentpole titles and independent films, the former warranting longer windows and the latter more day-and-date releases, speakers said.
So much for the good old days of the four-to-six month window on most titles on disc.
At THE Summit: Transforming Home Entertainment, put on in Sept. 24 by the Media & Entertainment Services Alliance (MESA), panelists discussed the coming 4K Ultra HD format, as well as HDR (high dynamic range) that offers more vivid contrast among other advantages. There are also Dolby’s and DTS’s various technologies for better picture and sound, as well as frame-rate choices. All of this must flow through either digital delivery, Blu-ray Disc (which just announced 4K Ultra HD specs) and various consumer electronics devices. And then there’s the question of whether digital delivery will meet the quality of Blu-ray for this upgraded technology. (Hint: Blu-ray seems to be winning that battle at the moment.)
It’s enough to make your head spin (mine did). This rapid change is good for at least one thing though: Panels at industry events. With little clarity on the future revenue model for content owners, there is a lot to talk about.