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Cable Eying Bundling DVD with Premium VOD

10 Feb, 2011 By: Erik Gruenwedel

Industry efforts to entice consumers to spend upwards of $30 for a digital rental of a new-release movie just weeks after the theatrical launch could involve bundling a DVD of the title, a studio executive said.

In a Feb. 10 analyst call, Steve Beeks, president and co-COO of Lionsgate, said the concept of creating a new window between theatrical and home entertainment windows, dubbed premium VOD, continues to move cautiously forward.

Warner Home Video and 20th Century Fox Home Entertainment both have said they would bow premium VOD titles by the second quarter. Beeks believes premium VOD is a “smart” opportunity for studios to generate additional revenue, only if it doesn’t negatively impact theatrical and retail channels.

“We have a couple ideas of films we might go with once we see where the industry is going,” he said.

That said, increasing the price of a movie at the time when theatrical attendance and revenue is declining, and when $1-per-day rental kiosks control 30% of the home entertainment market, would require giving consumers more than just early high-definition access to a blockbuster movie in the home. 

When asked whether studios would include digital locker initiative UltraViolet with premium VOD, Beeks said he didn’t believe that idea was on the table.

“But we have talked [about] how we can get a consumer to accept a $20 to $30 price point for a one-night rental, [and] maybe you then get a copy of the film, whether it's digital or DVD,” Beeks said. “Some of the cable operators have brought that up as a potential idea. I don’t think we have settled on anything; we are actually anxious to see how the market develops.”

UltraViolet is the brand name given a separate industry initiative that would allow consumers of digital and physical media (notably Blu-ray Disc) to store virtual copies in a cloud-based locker they could access via myriad devices on demand.

Beeks said the initiative could bring consumers back to sellthrough by making ownership more attractive.

“It gives consumers the ability to know that if they buy [a movie] on DVD, or if they buy a digital version from digital stores, they will be able to access that movie at any time on any device,” he said. “I don’t know if this is the total answer, but it is definitely a step in the right direction.”


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