Published:
08-Feb-08
US cable company Cablevision is making titles from Universal and Warner available through its video-on-demand (VoD) service day-and-date with DVD through a partnership with Popcorn Home Entertainment. However, in order to access titles Cablevision users must purchase the same title on DVD. The service is being offered to all of Cablevision's 2.6m VoD customers.
Under the scheme, the customer orders and pays for the DVD online and is then granted access to the title on a VoD basis for 24 hours via their Cablevision set-top box. The DVD order is shipped by Popcorn, with Cablevision being paid a share of the revenues from each sale. New releases are priced at $19.95 whilst catalogue films are priced between $9.95 and $15.95, plus shipping costs.
Popcorn has secured VoD rights to all new releases and select catalogue titles from Universal and Warner in the DVD window, and claims to be in advanced talks with two other major studios. The deal with Cablevision is not exclusive and the company is keen to offer the same service for other cable providers.
Our take...
This is a significant development for the US VoD business as it enables services to circumvent the traditional release window for some titles. Ordinarily, studios impose a window of 30 to 45 days between a title's DVD release and its arrival on VoD platforms in an effort to maximise revenues across the value chain. However, by bundling VoD access with the DVD purchase, studios can forgo the VoD window without risking cannibalising DVD sales.
It is not the first time that studios and VoD services have experimented with the VoD window. Warner has tested the strategy with Cablevision rival Comcast, determining that buy rates for VoD and DVD rose in test locations, while DVD rentals fell slightly. Following the trials, Warner has continued to make select titles available on a VoD basis day-and-date with DVD in the US—by the end of the first quarter of 2008 the studio will have launched six titles simultaneously on DVD and US VoD platforms.
It seems the impact that the closure of the VoD window might have on the DVD rental business is not a major cause for concern for the studios. Arguably more pertinent is the opportunity the Popcorn service might offer to boost the US DVD retail business which declined for the first time in 2007.
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