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Analyst Advocates Same-day Theatrical, Retail Movies

24 Jan, 2012 By: Erik Gruenwedel

Optional electronic or disc copy could be purchased for $5 to $10

Following the beatdown of Hollywood-sponsored federal antipiracy legislation by a united online technology front, BTIG Research analyst Richard Greenfield suggests studios circumvent movie theft by offering new theatrical titles day-and-date with a premium VOD alternative priced around $25.

With the premium VOD viewing window limited to 48 hours, consumers also could purchase a cloud-based digital copy for an additional $5 or physical disc copy for an additional $10.

With the average movie ticket priced at about $8, studios realize $4 from every turnstyle rotation, according to Greenfield. On a $25 premium VOD price point, studios would realize $20 in revenue (80% margin) — the same return from five moviegoers.

“The reality is most people who were planning to go out to the movies would still go out (movie-going is a social experience), but studios would now capture consumers who were not/could not get out to a movie,” Greenfield wrote in a Jan. 24 post.

The concept — while compelling in an age of Internet-driven movie piracy — would, in effect, turn the current window-based content distribution system on its ear. It's a system that typically has delivered a theatrical movie into the lucrative home entertainment channel — four months after launch date.

A dismantling of the windows also would no doubt raise the ire of theater owners, as evidenced when Universal Studios Home Entertainment last fall attempted (and then rescinded) to offer Tower Heist on premium VOD three weeks after its theatrical launch.

Regardless, offering movies in the home on theatrical launch date still would allow studios the flexibility to distribute them through conventional (extended) windows at discounted pricing — and a greatly diminished piracy threat.

“Movies would now be available at a time when they are currently only accessible illegally and we believe annual per capita spending on new movies would increase in the United States,” Greenfield wrote.

About the Author: Erik Gruenwedel

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