National Association of Theater Owners (NATO) president John Fithian recently outlined the organization’s views on plans for studios to make films available in homes in a new premium VOD window. According to Hollywood Reporter, he is calling them bad business, but saying he is cautiously optimistic.
He hopes studios will be able to create a new revenue stream without encroaching on the theatrical market, which is the strongest business, right now.
Fithian called the idea to make films available via cable and satellite distributors soon after their theatrical releases would “sacrifice a couple of dimes” by hurting their theatrical business. He went on to say that it makes complete sense to make movies available on VOD ahead of DVD releases, which these days often come three weeks before DVDs.
I write for a couple of movie sites where promotional companies contact me about VOD movies release dates before DVD release dates. They propose that I announce each simultaneously for that particular newsworthy movie. It was very apparent during the week prior to the Oscars, encouraging the public to view the movies VOD before the awards were handed out.
An interesting point of view, Fithian says studios should ensure that VOD availability comes in the current home entertainment window, while further pushing “way back” films’ availability via Netflix and Redbox. That way, studios could test if people may pay more for VOD ahead of DVD.
Fithian’s thinking is that VOD is the model that will stick.
However, there is a business challenge of premium VOD. High priced release in the home ($20 to $40) could lead people to invite the whole neighborhood into their homes.
In the THR article, Fithian went further to say that studio “shot themselves in the foot” by allowing Netflix and Redbox to teach consumers they can get movies in their homes cheaply.