Monday, December 20, 2010

Is Video On Demand Trying to Kill the Theatre?

Just as consumer demand has given rise to Netflix and caused problems for the cable industry (wrote about this topic in post Netflix vs Cable/Media Company), NY times Brooks Barnes reports it has now encouraged video on demand (V.O.D) for newly released films. His article “A Hollywood Brawl: How Soon is Too Soon for Video On Demand?” states that while movie theatres have 120 days of exclusive showing for released films– some studios want to put those movies on V.O.D. in 45 days. Thus, cutting theatre exclusivity down to 75 days.

For major studio produced movies, theatres are not happy with the idea of losing exclusivity and possible ticket sales. For independent films, theatres have been a little more open. According to Barnes, within the independent film industry “experiments with the timing of video-on-demand have been occurring for some time.” Considering that independent films usually have limited releases in theatres, theatres can gamble a little more with sharing films with V.O.D. The case study for the article is the film “All Good Things”. The film was actually released first on V.O.D, in which the film made $10 million in sales. Then in theatres, “ticket sales averaged about $19,000 a theater — a strong performance by specialty film standards.”

Theatres might be willing to work with the independent film industry, but with major film, that future is not to close.  Many within the film industry spend a lot of money and time making theatre-ready films. Blu-rays and HDTV have given at home viewers the ability to get theatre-at-home experience but it still isn’t the theatre (unless you are the few lucky who have actual theatres in your home). Also, according to article, V.O.D could run from $10 to $30 per rental. This price is the same as movie theatre ticket prices. Movie theatres will fight for their right to 120 days of major studio films and their consumers might not be so easy to give up the theatre experience considering the only convenience is watching from home.

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