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Directors Join Theaters Against Premium VOD

20 Apr, 2011 By: Chris Tribbey

On the eve of a new premium VOD offering from DirecTV, nearly two dozen filmmakers — including James Cameron, Michael Bay and Robert Zemeckis — have come out against the idea, writing that offering a film so soon after its theatrical run will “rashly undermine the current — and successful — system of releasing films in a sequential distribution window.”

The was made available by the National Association of Theater Owners, or NATO, which came out strongly against the studios’ and DirecTV’s plans in late March. DirecTV’s Home Premium service will allow 6 million of its more than 19 million customers to rent a film just 60 days after its theatrical debut, and before it’s available on disc. Rentals cost $30 for 48 hours, and the first title available April 21 will be Sony Pictures’ Adam Sandler comedy Just Go With It.

“The titles may overlap, and we will schedule them as the studios make them available to us,” a DirecTV spokeswoman said. “Each title will be available on the Home Premiere service for two weeks.”

Warner, Universal and Fox are the other studios that will participate in the service.

Much like NATO, the directors expressed concern that the studios are going about replacing declining DVD revenue in the wrong way.

“We in the creative community feel that now is the time for studios and cable companies to acknowledge that a release pattern for premium video‐on‐demand that invades the current theatrical window could irrevocably harm the financial model of our film industry,” the letter reads. “History has shown that price points cannot be maintained in the home video window. What sells for $30‐a‐viewing today could be blown out for $9.99 within a few years.

“If wiser heads do not prevail, the cannibalization of theatrical revenue in favor of a faulty, premature home video window could lead to the loss of hundreds of millions of dollars in annual revenue.”

The letter goes on to warn that the “cut-throat” premium VOD model would better equip pirates, result in theater closures and threaten the success of independent films.

“As leaders in the creative community, we ask for a seat at the table,” the letter reads. “We want to hear the studios’ plans for how this new distribution model will affect the future of the industry that we love.”

AMC Entertainment, which operates 5,000-plus screens nationwide, has come out against the premium VOD model, saying it “threaten[s] our industry’s future,” while two of the nation’s largest theatrical chains — Regal Cinemas and Cinemark Entertainment — have begun boycotting trailers and signage for new releases earmarked for premium VOD.

“Based on the recent announcement regarding premium video-on-demand, we are amending our policies for support of films from studios participating in the new VOD model,” Regal CEO Amy Miles said in a statement earlier this month. “It is simply not in Regal’s best interest to utilize our resources to provide a marketing platform for the release of premium VOD movies.”

Meanwhile, a recent Google research report found that online consumer interest in a film during the 60 days after its initial theatrical release was almost identical to the amount of Google queries by consumers prior to the film's release in theaters.

“There are millions of searches that persist in the 45 to 60 days post theatrical release, indicating a high enough level of awareness to introduce the movie on a new format without having to fully invest in a new marketing initiative,” wrote Debra Schwartz, head analyst with Google. “Consumers continue to have a strong desire to consume film content in the home post its theatrical run.”

Related Links :

Premium VOD: Will Studios Blink First?

AMC Issues Premium VOD Warning

Analyst: Premium VOD to Have ‘Minimal’ Impact

Theater Group Balks at Premium VOD Plans

DirecTV Eyes Premium VOD Launch

About the Author: Chris Tribbey

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