Panelists Talk Premium VOD2 May, 2011 By: Chris Tribbey
MARINA DEL REY, Calif. — Candace Carlo, partner and chairwoman of the entertainment group at entertainment law firm Greenberg Glusker, is not a fan of premium VOD, mostly because her clients aren’t.
“From a talent perspective, it’s ‘How does this affect us artistically and on a financial basis?’” she said at Variety’s Entertainment and Technology Summit, the kickoff event of the annual spring Digital Hollywood conference. “They make a film released in theaters with certain [video and sound qualities]. To have a situation where … you can watch it on a television set, it diminishes the value.”
DirecTV April 21 debuted Home Premium, a VOD service that offers films just 60 days after their theatrical debut for $30. Carlo said premium VOD will result in fewer theaters, and fewer art-house type films like this year’s Best Picture Oscar winner The King’s Speech.
“The day of the DVD in the family room is over, and the interest of talent is to distribute as widely as possible,” she admitted.
But studios should be focusing on digital distribution angles like UltraViolet, the buy-once, play-anywhere open standard for digital entertainment distribution.
Studio representatives with her on the panel were not convinced.
“You’re always looking for a new place to attract revenue,” said Steve Mosko, president of Sony Pictures Television. “The DVD business is really hurting the core of the movie business,” and premium VOD is “an attempt to strengthen the financials for everyone.”
Kevin Beggs, president of Lionsgate Television, said premium VOD should be approached on a case-by-case basis, but reminded those attending that “our job is to maximize revenue out of every ancillary business outside of [theatrical].”
“We’re really focusing on this transition that’s happening between digital and physical,” said Thomas Gewecke, president of Warner Bros. Digital Distribution, adding that higher sales of Blu-ray Disc combo packs that include digital copies “shows consumers want choice.”
“Figure out what your consumer wants, and give it to them every way you can,” he added.
Sean Bailey, president of Walt Disney Studios Motion Picture Production, said what’s most important when it comes to the premium VOD debate is “we have to be wary of scratching and clawing” at each other.
“The explosion of all these different distribution channels can be an exciting thing,” he said.
For DirecTV, Tom Adams, principal analyst at Screen Digest, said it’s easy to see why premium VOD is an attractive option.
“At this point they’re getting a couple bucks out of a $5 rental,” he said, adding that the profit margin for the cable or satellite company is a lot bigger with a $30 purchase.
“We’re at a critical juncture, and the studios have taken the first critical step, at the risk of the wrath of the theaters and retailers,” Adams said.
Outside of premium VOD, panelists spoke about how while DVD sales are taking a beating, broadcast TV is doing great. Mosko pointed to a combination of higher advertising rates, syndication and the move of TV across multiple screens.
“As you look at the television business, you have to say to yourself, ‘Follow the money,’” he said, adding that Sony’s ad-supported streaming site Crackle.com is seeing “tremendous growth.”