Warner to Work With Major Retailers for Premium VOD6 Dec, 2010 By: Erik Gruenwedel
Time Warner Inc.’s planned rollout of premium video-on-demand (VOD) early next year will include traditional disc retailers such as Walmart, CEO Jeff Bewkes said.
Premium VOD is Hollywood’s newest marketing effort aimed at generating higher margins from consumers willing to pay extra to watch select theatrical releases in the home 30 to 60 days before the disc release.
Speaking Dec. 6 to an investor group, Bewkes said Warner would work with national home video retailers, together with cable and satellite operators, to launch premium VOD.
“They all have websites and ambitions in the home electronic delivery business,” Bewkes said.
Indeed, Walmart with proprietary service Vudu, Best Buy via CinemaNow, and Sears, Kmart, Target and others, have all taken steps toward delivering transactional VOD.
Bewkes was instrumental in pushing transactional VOD availability at the same time as physical media — a move many in the industry said would sabotage retail sales.
The executive reiterated the studios do not plan to impact the theatrical window with premium VOD.
“I think the entire studio industry wants to be as protective as possible and not impinge upon the theatrical business,” he said.
The CEO stressed the historical significance of theatrical distribution for introducing movies to the public and whetting the appetite for 3D movies, especially among the coveted 18-to-34-year-old demographic.
“We think we can come up with an incremental, serve-the-consumer kind of offering that does not undervalue theatrical content and the consumer view of what that value is,” Bewkes said.
That said, the CEO said initial premium VOD pricing would be about double the average theatrical movie ticket. This could potentially impact disc sales considering the average movie ticket nationally in 2009 was $7.50 — about half the price of a standard DVD, putting the it in line with disc pricing.