Premium VoD offerings priced too high, study says

A study from The Diffusion Group (TDG) puts into words what many already think: premium VoD service with prices as high as $30 per rental are "priced too high to support significant demand." DirecTV (Nasdaq: DTV) and Comcast (Nasdaq: CMCSA) have already voiced support for the services and Warner Bros, Sony, Universal and 20th Century Fox have offered up content.

TDG looked at two "aggressive" models that have already been put forth for DVD and VoD rentals: same-day and day-after theatrical release of DVD titles for an extra $20. It found that only 8 percent of customers were highly likely to spend that much to rent a title, while 21 percent were highly likely to pay an extra $5 for a same day release.

A $30 price tag for a release 60 days after it's been in theaters, the report said, is "unrealistic," although other price points may have a better chance.

"The tactical terrain between theatrical debut and the 90-day rental horizon is vast, so the industry has a variety of timing and pricing options available. And yes, the 60-day model may have a future, but not at these prices," said report author Michael Gleeson, TDG's founding partner.

For more:
- see this news release

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