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Survey: No Risk to Collapsed Theatrical-to-Home Entertainment Window

3 Feb, 2012 By: Erik Gruenwedel

Tower Heist

Hollywood’s attempt to establish a premium video-on-demand market in the home could regain traction with new-release movies released day-and-date theatrically, according to a new survey.

On Jan. 24, BTIG Research in New York surveyed a combined 1,300 respondents on the question, “If new movies released in the theater were offered simultaneously in the home via cable/satellite/VOD or electronic sellthrough for $20-$25 per movie, would it increase/decrease/have no impact on your household’s movie expenditures and movie industry piracy?”

Among respondents, 93% said their movie entertainment spending would stay the same or increase if offered the option. Indeed, 28.4% of respondents said they would spend more on movies available in the home day-and-date with theaters, while 64.6% said their expenditures would stay the same. Another 7% said the option would decrease their movie spending.

Regarding premium VOD’s impact on piracy for titles offered simultaneously in theaters, 19.6% of respondents said it would decrease piracy, while 40.6% said there would be no impact. Another 39.9% said premium VOD day-and-date with theatrical release would increase piracy.

Respondents in the survey included 1,124 general consumers and 201 media and finance industry professionals.

Notably, collapse of the current theatrical-to-home entertainment window generated proposed higher movie spending (64.7%) among media and financial industry respondents than among general consumers (22.1%). The latter cited such a move as increasing piracy (43.8%) compared to media and financial respondents (17.9%).

The latter group also mentioned expected savings on concessions and/or parking for supporting premium VOD.

The results — while likely not good news to theater operators — would appear to be encouragement to studios seeking incremental revenue from higher-margin digital distribution. It could also rejuvenate premium VOD, which heretofore has gone nowhere, offering select titles four-to-six weeks after theatrical launch priced from $29.99.

Premium VOD has generated significant backlash from theater operators who say the move undermines their business. Indeed, Universal Studios Home Entertainment was forced last November to scuttle the attempt to offer action comedy Tower Heist early on premium VOD after theater groups threatened to boycott the movie.

“We believe the data in aggregate does not show a major industry risk to collapsing the theatrical-to-home entertainment window,” wrote analyst Richard Greenfield, who spearheaded the survey. “There would be some uplift in consumer spending on movies with a greater share of that spending captured by movie studios vs. movie exhibitors, offset in part (at worst) by a rise in piracy.”

Indeed, with sales of DVD — not Blu-ray Disc — movies being supplanted by lower-margin kiosk rentals and subscription VOD, Greenfield said it is hard to see studios losing from giving consumers earlier access versus sticking to their “legacy” sequential release windows.

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