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Analyst Blasts Pricing on Paramount ‘Disk-free’ UV Movies

27 Jan, 2012 By: Erik Gruenwedel

Paramount’s move to offer digital movies on the cloud-based UltraViolet platform that don’t require purchase of a disc is being criticized for its excessive pricing and limited content.

Paramount Home Media Distribution Jan. 25 became the first major studio to sell only UltraViolet digital copies of more than 60 new and catalog titles for either streaming or downloading at . UltraViolet is the industrywide initiative aimed at jumpstarting sellthrough of both physical and digital movies, which can be accessed from the Internet and played on select devices.

Frost & Sullivan analyst Dan Rayburn, writing on his blog at , said Paramount and other studios efforts to embrace the digital distribution come up short in an era of $1 kiosk rentals, $7.99 subscription video-on-demand and ubiquitous access.

Specifically, Rayburn wonders why Paramount is charging $22.99 for 2010 release The Fighter in high-definition ($16.99 in standard-definition) and $19.99 for Braveheart (in HD), which is 17 years old. Indeed, Roman Polanski’s 1974 Chinatown, starring Jack Nicholson and Faye Dunaway, is available in UV for $19.99 (HD) and $12.99 (SD). New release Paranormal Activity 3 is available for the same $22.99 (HD) and $16.99 (SD).

“What studio executive thinks consumers are going to pay $22.99 to stream a movie when we can buy the DVD for $7 or rent it for less than $2?” Rayburn wrote. “The economics don't make sense for how the studios price digital content and the fact they are keeping Netflix and others from even renting physical discs, only so they sell more DVDs, clearly shows where their true interest lies — and it's not in digital.”

By comparison, Amazon is charging $18.99 for Chinatown on Blu-ray Disc (which includes bonus features) and $19.19 for DVD. Braveheart on Blu-ray costs $9.99 and $7.50 on DVD. The Fighter Blu-ray/DVD/digital copy combo pack is listed at $17.49. Even the Paranormal Activity 3 Blu-ray/DVD combo pack (no digital copy) is one dollar less than Paramount’s disc-free UV price at $21.99.

Rayburn said studios are on the same path frequented years ago by the record labels, which insisted consumers buy pricy music CDs at a time when digital distribution — spearheaded by Napster and the Internet — made the single a more cost-efficient purchase.

“At some point, the studios are going to get burned just like the music industry did and while they spend a lot of time complaining about piracy, they need to wake up and realize that consumers are demanding digital content, for a fair price,” Rayburn wrote.

About the Author: Erik Gruenwedel

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