‘Premium Video-on-Demand’ Slated for Second Quarter, Says Time Warner’s Bewkes
Warner Bros. could be one of the first major studios to distribute movies still in their theatrical run directly to U.S. consumers’ homes, with the company looking to offer a “premium video-on-demand” service by the second quarter of next year.
Time Warner chief executive Jeff Bewkes told analysts yesterday that the studio was “near agreement with our distributors on the right window and the right price point” for premium VOD (earnings call transcript via Seeking Alpha). Previously Warner Bros. had hinted that such screenings may cost between $20 and $30 each. But Variety reports that Warner is now considering a higher price range of between $30 and $50 per film.
The even higher premium may be linked to Warner’s plan for the new VOD service to eventually offer new 3D releases as well. In any event, the range is in line with current pricing for pay-per-view events on cable and satellite networks — as well as the cost for a family of four to see a film like “Harry Potter and the Deathly Hallows” in theaters ($45 for two adults and two children at an AMC theater in Manhattan).
Talk among major studios of premium VOD’s potential is not new. But Warner’s comments nevertheless came to the consternation of major theater chains, which fear the home screenings will undermine their business.
Exhibitors “assume that Warner Bros. would discuss new models with their existing exhibition partners prior to finalizing radical agreements that could damage the entire movie industry,” John Fithian, president of the National Association of Theater Owners, told Variety.
From Warner’s perspective, premium VOD would build on the studio’s successful implementation of a 28-day sales window for new DVD and Blu-ray releases.
At the Blu-con conference in Beverly Hills, Calif. earlier this week, Warner Home Video president Ron Sanders said the delayed DVD access to Netflix and Redbox has yielded a 10%-15% sales lift for the studio’s top new releases. But Sanders also mused during a panel discussion that 28 days might not be long enough to maximize sell-through.
Bewkes followed up on Sanders’s point in his earnings discussion with analysts. “We’re not religious” about the length of windows, he said. “We’re just trying to maximize the value of our content as we see these alternatives develop. What we think is that so far the 28-day window has clearly been a success versus no delay.”
The idea of a longer window to protect DVD and Blu-ray sales “is very much under scrutiny,” Bewkes said, adding that if it saw promise in a longer window, “we can do that next year because that’s when our deals all come up for a decision by us.”