$30 Premium VOD Under Consideration

Earlier this year came word that six of the seven biggest Hollywood studios were pushing for a premium VOD service that would offer major films in the home from around seventeen days after their theatrical debuts.

A rough plan suggested by Warner Bros. CEO Kevin Tsujihara was that each rental would last for around 48 hours and come in at a fairly steep $50, and a percentage of digital revenues would go to exhibitors.

Currently, most major movies are only made available to rent or buy on physical disc some 90 days after their release, though some studios offer films for sale electronically (aka. Digital HD) roughly 70 days after their bow in cinemas at around $15-$20.

Now, a new piece in Variety indicates the plan is changing up a bit. Some of the studios felt that $50 was too steep a price to ask and are now trying to get exhibitors to agree to a plan that would involve a lower price rental ($30) but at a slightly later date.

Universal, the most aggressive negotiator in these talks, wants things to remain in the 20 day range and to do it for their entire slate. Fox and Warners on the other hand want to push it back to the 30-45 day range, and/or follow a different release pattern for different movies – so bigger franchise films would get longer runs in cinemas. Sony is still in very early stages but are more about sticking with higher price points and later dates.

The talks have been going on for over a year, and are still very much in flux, with many issues to be resolved before a final pact is in place. Adding to the confusion is that a number of different models are being circulated.

Due to antitrust laws, the studios can’t collaborate on these agreements either – each studio has to basically do it on their own. The only studio not interested in shortening the release window is Disney, a studio whose entire slate consists of just a handful of tentpole films that tend to have long runs in cinemas with a scope that works on the big screen.

No deal is imminent and either way exhibitors are sticking firm to one point – if premium VOD is established with a shortened exclusive access window, then the standard 90 day window for cheaper VOD rentals and disc sales will be cemented in place for years to come – up to a decade in fact.