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Windows Aren’t Much Clearer

3 Jun, 2010 By: Stephanie Prange

Really, who can blame consumers if they are confused by the value of movies?

Recently, they’ve been able to get Walt Disney Home Entertainment’s Alice in Wonderland at their local kiosk for $1 a day, while on the high end they are paying a $20-per-ticket premium price to see DreamWorks latest Shrek installement in 3D in theaters, about the same price they’ll pay to buy the disc (albeit in 2D) a few weeks later.

Soon, studios will ask consumers if they would like to rent a new release via video-on-demand for $25 to $30 a few weeks before it comes out on disc. Still, they’ll be able to rent the title a few weeks later for about $4 from the local Blockbuster or cable company VOD plan or for $1 at a kiosk (availability depending on the studio).

Within a three month or so period, the price of watching a movie can vary from more than $20 to $1. There’s also the all-you-can-eat streaming option at Netflix, which values watching older movies based on how many you can watch in a month-long period. If a consumer streams 20 movies in a month for the $9 monthly subscription, that’s less than 50 cents a viewing.

Disney’s Bob Iger, for one, is on the side of fewer windows in the home video business. He sees no added revenue in delaying disc sales to Redbox and other kiosks at discounted prices.

“We have not seen any significant cannibalization from the $1 Redbox rental window,” Iger said.
Several industry observers beg to differ, noting that many consumers won’t buy a $20 disc when they can rent it for $1.

At the beginning of the year, I wrote that windows would be one of the biggest issues facing home entertainment in 2010, and it has been. I just thought we’d have a little more clarity on the issue by this time. Certainly, the deals worked out by Warner, Universal and Fox with kiosks and Netflix in part settled the question, but the issue is by no means dead.

Will the three studios that have imposed windows see a jump in disc sales? Will Disney regret offering Alice to $1-a-night kiosks and see sales slump?

The second half of the year — which includes the all-important fourth-quarter sales season — may offer some answers. But for now, the future of windows is still unclear.

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