December 22, 2010

Studio plans to introduce premium video-on-demand (VOD) - access to new movies in advance of their release on disc - could prove to have value in the overall revamping of studio pricing and windowing strategies. Although they are sensitive to concerns expressed by exhibitors and retailers, studios see premium VOD as one way to increase the perceived value of the in-home movie experience. Network operators would presumably jump at the chance to participate in offering a one-night electronic rental 1 or 2 months after theatrical release for $30-$50, even with only a 20% gross margin for them. A typical hit movie today drives total studio-level domestic revenue of about $292m from theaters and all the in-home transactional markets. In one reasonable scenario, premium VOD could drive a net 9.9% increase to $321m.

Tables and charts included:

• Video-to-VOD windows in first nine months of 2010
• Proportion of total box office takings by week
• Annual home entertainment transactions per US TV HH
• What effect has shrinking windows had on box office?
• Potential scenario for Premium VOD impacts

Pages: 12

Tables & charts: 5

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