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Studios Launch Cable VOD Primer

17 Mar, 2010 By: Erik Gruenwedel

Hollywood studios and cable operators March 17 launched a public relations campaign aimed at bringing consumer awareness to renting new-release video-on-demand (VOD) movies on cable television.

Dubbed “The Video Store Just Moved In,” the $30 million campaign, through the Movies On Demand consortium, over the next 12 weeks will showcase the ease of watching new release movies available on demand the same day as the DVD/Blu-ray Disc releases.

Spearheaded by Warner Bros. Home Entertainment Group, which includes Warner Home Video, the studio in 2006 was the first to offer new releases on VOD, claiming the practice did not adversely affect retail sales while producing greater margins than disc rentals.

Last year eight of the top 10 VOD titles were released day-and-date with DVD, including Bride Wars, Gran Torino, He’s Just Not That Into You and Twilight, the latter the top cable VOD release of 2009, according to Rentrak.

Indeed, cable VOD revenue topped $1.2 billion in 2009, up 20% from $1 billion in 2008, according to industry data.

Lionsgate, in a recent financial call, said it expects to generate $68 million in VOD revenue this year.

Top VOD titles offered early this year include Oscar-winner Precious, The Twilight Saga: New Moon, Ninja Assassin and Pirate Radio. Others include Astro Boy, Bandslam, Did You Hear About the Morgans?, Fantastic Mr. Fox and The Fourth Kind.

“Movies On Demand is a great way for consumers to rent movies, they are reasonably priced, always available, and the number of day-and-date titles continues to increase year over year,” said Kevin Tsujihara, president of Warner Bros Home Entertainment Group.

While VOD has been around for years, widespread adoption of renting new release movies via the cable remote control has lagged as many consumers remain indifferent or unsure about the process. At the same time kiosk vending of lower margin $1-per-day DVD movies skyrocketed to more than $900 million in 2009, up 88% from $486 million in 2008, according to data from The NPD Group and Adams Media Research.

In-store disc rental revenue fell 10% last year to $5.1 billion from $5.7 billion in 2008.

The campaign, through TV, print, Internet ads and a Web site (www.cablevideostore.com), showcases the Movies On Demand new green logo, which is meant to signify the speed and ease of VOD renting.

“We've seen [VOD] rentals hit an all time high this past year, and research shows that it will continue to grow," said Mike Dunn, president, Twentieth Century Fox Home Entertainment Worldwide.

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