Media Wonk

Link This | Email this | Comments (0)

The studios whisper their plea to the FCC - May 16, 2008

Every studio or studio-affiliated person I spoke with yesterday while reporting on their VOD plans as disclosed in an MPAA petition to the FCC--and they would only speak on background--tried to wave me off the story (hat tip to Jonathan Make of Comm Daily, who broke the story first). It was just the MPAA being proactive "for a change," I was told. No one put them up to it, no one has any plans for anything like an early high-def VOD window ahead of the DVD release and won't for a long time, yada, yada, yada.

None of which surprised me. The MPAA had filed the petition on a Friday afternoon and had made no effort to publicize--unlike, say, the hoo-hah they typically try to whip up over a photo-op with those lovable DVD-sniffing hounds, Lucky and Flo. Obviously--and for obvious reasons--the studios didn't want to talk about it.

But it would be a shame if their background denials were actually true (and I'm not saying they're not, I'm just saying). A limited, premium-priced high-def VOD window, concurrent with or immediately after the theatrical window, would be a perfectly sensible thing for the studios to do.

Studios spent an average of $35.9 million to market each film they released last year, according to MPAA statistics, most of it in the weeks leading up to the theatrical release to try to put butts in seats on the opening weekend. After that, spending falls sharply, especially if the movie tanks. They'll spend a little more if the movie shows some box-office legs, a little more on the DVD, and virtually nothing on the VOD release.

That's a lot of front-loaded marketing against, essentially, a single revenue stream: theatrical. But there's almost certainly a bigger potential audience out there that is exposed to the marketing but doesn't manage to schlep to the theater before the movie disappears from screens. Giving those people the option to watch it in their living rooms while their interest is at its peak--and to pay a premium for the privilege--would be an effective way to leverage the money the studios are spending on marketing anyway to create a second revenue stream.

Theater owners would of course squawk, at least initially. But careful testing could establish fairly easily whether the at-home option really cannibalizes the box-office. If you ask Media Wonk, there's a good chance you're talking about two distinct audience segments, and a studio could tap both with minimal cannibalization.

DVD retailers would also squawk. But DVD sales are declining anyway. The studios need new revenue streams. Some might argue that it would hurt Blu-ray sales, just as the market for high-def discs is getting started. But if the high-def VOD window ended with the theatrical window, or shortly thereafter, there's no reason it should affect DVD and Blu-ray sales any differently from theatrical ticket sales. It might even work to promote Blu-ray sales--especially if people who ordered the VOD were offered a discount on a Blu-ray copy of the movie when released.

The studios need new revenue streams. It's time to let a thousand experiments bloom.


[Consumer Trends]  [Digital Home]  [Discs]  [Streams & Downloads]   LEAVE A COMMENT