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David Poland

By David Poland

MVODBS (More VOD Bulls***)

The “We’re All In This Together, So It’s Your Damned Turn To Spin This Ridiculous Story To The Media This Week” Tour of studio heads continues this week with WB’s Jeff Robinov and Warner Bros. Home Entertainment Group prexy Kevin Tsujihara talking to Variety (appropriately, a digital disaster story itself).

“We view exhibitors as our partners. We view them as a very important part of establishing the value of the movies, which is really important,” Tsujihara said. “If you look at the things we think have devalued movies — and our company has been pretty upfront about this — we think that services like Netflix and dollar rentals like Redbox devalue from a consumer’s perspective the value of the movie. Re-establishing premium content at a premium price helps not only the prior window in theatrical but also ancillary markets afterwards. That’s a key part of the thought process Warner Bros. had in establishing the wholesale price that drives the ultimate retail price of this product.”

You’ve already blown this one, guys. And Premium VOD will just make it worse, not better.

Who was actually responsible for driving down the value of the DVD market and how? The studios. They flooded the marketplace, kept cutting the prices, and when Netflix was being built, took stock in the company in return for price breaks. The mainstreaming of $1 rentals and streaming are obstacles that reared their heads long after the horses were out of the barn. Years after.

Studios told consumers to expect ever lowering prices in the post-theatrical environment. And now they are trying to reverse the result of their actions. Understandably. And they are asking us to believe that “this is just a test,” when the long history of all of these businesses is that once the cherry is broken, the appetites increase exponentially and irrationally.

If WB or anyone else can name a consumer product that was able to rebound significantly on price after grinding the price point down, please let us know. An industry can increase revenues by adding new products within its business that are associated with the core business. VHS and DVD are an example of this. Wireless on your phone is an example of this. But it is cheaper now to get access to the internet than it ever has been. Your phone bill may not have changed, but that’s because you are using multiple kinds of web access in 2 or 3 or 4 places and not just plugged into your one computer at home.

The only example I can think of having a major price leap after years of price competition is razor blades, which have done the trick by changing the product significantly, from 2 blades to 3 blades to 4 blades and now, 5 blades. But a Premium VOD 60 day window in not a product improvement. It is, ironically, just another window on the same old product. It adds no value to the 120 day released product. The only thing it can do, as a matter of value perception, is devalue the opening day value.

Here are your options to buy Black Swan, the Oscar nominee and winner for Best Actress, on Amazon today. Blu-ray, $21.99, DVD, $13.99, Own it digitally, $13.99, Rent it digitally, $3.99. And in 8 days, you’ll be able to get it on Netflix or Redbox.

Want the Inception Blu-ray? 17 bucks. Toy Story 3? $18.49 Iron Man 2? 20 bucks.

There are exceptions. Alice in Wonderland in Blu is still $25. But you know what I, as a consumer, think of as the standard price for a Blu-ray in 2011? About 20 bucks. And it’s getting lower every year.

None of these numbers are going up. Why would they? Should theaters double ticket prices? Would that help increase the way people value the Home Entertainment market?

“(C)onsumers came out very bullish on willing to pay a premium at 60 days.”


Have you figured out how to get them to use PPV on a consistent basis yet?

“Nearly 21% of consumers surveyed in a new report from NPD Group saying they have used paid VOD through their TVs to watch a movie over the last three months.”

That one is Variety’s “reporting.” Why is Variety running a survey if WB and DirecTV are going on record? Because this number is skewed. What is “paid VOD” and how are “consumers” defined by NPD Group? These are big questions, especially in light of the rest of the press release for the survey: “Over the past three months, 77 percent of consumers reported watching a movie on a DVD or BD, which is unchanged from last year. Those who viewed movies from physical discs reported watching an average of four hours per week, which is also unchanged from the prior year. By comparison 68 percent watched a movie on a TV or cable network channel, 49 percent at a theatre, and 21 percent used paid video on demand through their TVs.”

I haven’t been able to get an answer from NPD, but my guess would be that a “consumer” is qualified as someone who has consumed at least one movie in the previous 3 months in some way. And does “paid video on demand” include HBO, for instance, whose VOD I only have access to only because I pay for their pay-tv service? There are many kinds of VOD… and all of them are paid.

The clearer fact is, less than 1% of revenues on a film, on average, are being generated by VOD these days. Not 10%. Not 1/3. 1%.

I still think that WB should go day-n-date on Hangover 2 and Harry Potter 7A. Let’s just get it all out on the table. These will be the strongest possible titles, period. Let’s see what the top end looks like right now… this summer. Bad Teacher…. promote it with an unrated version in just 60 days! Mr. Popper’s Penguins comes home right NOW!

And then we can wonder how Cedar Rapids will do on VOD two months after it barely sold in theaters. Contrast and compare! Let’s see the studios put some skin in the game!

One Response to “MVODBS (More VOD Bulls***)”

  1. IOv3 says:

    IF they went D&D with Potter. It all but guarantees that distributors would boycott it. Seriously, this is going to be dead before it starts. It’s on the wrong service, the service it’s on has people that most likely will not take advantage of it, and it’s screwing over distributors who have shown they don’t take shit. It’s dead before it starts.

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