It was about 7 years ago that Faultine first discussed the ideas of buying online access to major motion pictures before they hit the DVD phase of their lives ‘ it seems strange to advertise a movie and get everyone excited about it, and then not allow anyone to see it without going to the Cinema, with all of the time, effort and extra expense that this entails. And then 6 months later begin the same advertising costs all over again, in order to sell DVDs.
With online or VoD delivery of major movies a few weeks after theatrical launch, movie studios can reap their monies for producing films ever sooner.
Which is perhaps why Sony, Warner Brothers and Disney have finally this week begun to look in earnest at this idea and plan to launch a cinema window service in conjunction with handful of US cable TV operators.
The talks have been confirmed to the US press by Bob Benya, chief executive officer of iN Demand, which is the VoD cable Pay-Per-View VOD provider owned by cablecos Comcast, Cox, Time Warner Cable and Advance/Newhouse.
The idea is straightforward, VoD customers of those cable firms will pay $30 or so per movie straight after they run in cinemas, a massive premium payment for viewing films before they fall to Pay Per View pricing in the $4 per film pricing range, just a few months later. $30 is not so much if you have your living room full. It would buy perhaps 4 cinema seats not counting popcorn and petrol.
One leak suggested that Disney was also in the middle of talking to Microsoft and Sony about putting its films on the Xbox and PlayStation 3 consoles under similar terms, although we think that it is likely that the Sony discussion relates purely to films which are way beyond their pay per view window and these should not be confused.
In March Sony said its PS3 network would soon be able to play films from NBC Universal giving its access to 1,300 movies and 4,500 TV episodes. Sony says that its PlayStation Network now has 9 million registered accounts in the US and 20 million globally. All these films will have been way past their PPV window and we suspect the same for the Disney discussions.
So these moves are likely to be unrelated, this is Sony calling in favors and building up its own film service for the PS3, while the iN-Demand group are really pushing something quite new in Premium content.
In the past studios have not wanted to try this $30 premium idea because it potentially undermined DVDs sales, but DVD sales have fallen anyway and we see this more as an attempt at replacing lost DVD income. Our own feeling is that if it ever gets off the ground it will be a small success, and make very little difference to overall film revenues. What’s actually needed here is an genuine online effort, preferably one with strong protection and a long term rights locker such as that used in DECE, which can be sold through every ISP on the planet. But what with that being over the internet, it will take a while before the studios reach for that solution.
Time Warner’s CFO spoke about this topic at a recent investors conference and said that it expects to test the service later this year, priced between $20 to $30 per viewing with Disney going to a test in the first quarter of next year.