Sony picks online deal over DVD for 'Cloudy With a Chance of Meatballs'

Sony’s decision to release its animated hit “Cloudy With a Chance of Meatballs” via its Blu-ray players and Internet-enabled Bravia televisions before releasing it on DVD is a dramatic change of pace for a motion picture studio that usually is in lockstep with its brethren. But it may be doomed to failure (and perhaps that’s the intent) as it comes to market with a $24.95 price tag for a one-day rental starting Dec. 8.

DVD sales, a major cash cow for Hollywood in the past, have fallen off into the abyss, down nearly 14 percent in the third quarter as spending on home entertainment in general has contracted. Studios--which are used to earning a significant portion of their revenues from home entertainment sales--should be looking for change in their release strategy. But is charging more for a 24-hour rental than a DVD will cost to buy just 30 days later the right way to do it?

Sony seems to be trying to appease retailers with the pricing, as CEO Howard Stringer told the New York Times: “We don’t need a war with Wal-Mart or any other organization, and I don’t think they are hostile to this. It will make televisions more valuable, and that’s a good thing.”

Pail capital analyst Richard Greenfield, meanwhile, told the Times that, while “the time when the majority of consumers have Internet-enabled TVs is a long way off, (Sony’s new strategy is) moving the ball in the right direction.”

We'll find out soon enough. "Cloudy" earned Sony some $174 million at the box office since its September release. The DVD is set for release Jan. 5.

For more:
- see this New York Times article

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