Editor's Corner—Chances of premium VOD for theatrical releases fade out

Last year during CinemaCon, National Association of Theater Owners (NATO) President John Fithian said a premium VOD model is “tricky but doable.” (Pixabay)

About a year ago, it seemed like progress was being made on a premium VOD service that would offer streaming access to films just weeks after their theatrical releases. But now it’s not looking so good.

Paramount COO Andrew Gumpert this week spoke with Variety and offered a dreary forecast for the future of a premium VOD service.

“There’s clearly no consensus, unless that changed in the last half hour,” Gumpert told the publication. Because of that, he said exhibitors are worried about the potential disruption to their business.

The consensus that’s been hard to reach concerns both the theatrical window and the cost of such a service. The current window for DVD and VOD releases after theatrical releases is about 90 days or 70 days for some films. Opinions varied on how much to narrow that opening.

The Hollywood Reporter said last year that Comcast-owned NBCUniversal was suggesting making films available for streaming 10 days after initial release for $40. Warner Bros.—which is in the process of being acquired by AT&T—was suggesting pricing films at $50 after 17 days. 21st Century Fox proposed a $30 price after 45 days. The Walt Disney Company was reportedly uninterested in participating in such a service.

As the report pointed out, U.S. antitrust laws also prevent studios from working with other studios, and movie theaters from working with other movie theaters. That means negotiating an agreed-upon plan for a premium VOD service, especially one that doesn’t involve a third party, is difficult.

Still, last year it seemed that inroads were being paved.

Warner Bros. movie studio chief Kevin Tsujihara said his company and others were making “progress” on shortening the release window for theatrical films.

“We’re aggressively working with exhibitors to talk about models that will grow the market instead of cannibalizing the market,” Tsujihara told investors last year during a Time Warner Inc. earnings call.

Last year during CinemaCon, National Association of Theater Owners (NATO) President John Fithian said a premium VOD model is “tricky but doable.” He said the trick is to grow home-market revenues for studios and distributors without eating into exhibitors’ slice of the pie. According to IndieWire, studios see premium VOD as an opportunity to reach younger audiences who may not be going to theaters, and lure them in at a higher price point.

“I definitely feel like we’re in the moment, whether it’s two months or a year from now. I don’t think we get to the next CinemaCon without some progress being made,” an unnamed distributor told the publication.

CinemaCon 2018 is coming up fast. It’ll be held April 23-26 at the Caesar’s Palace in Las Vegas. But if Gumpert’s comments are any indication, the annual NATO convention will pass again without a solid plan in place for premium VOD. - Ben | @fierce_video