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Author
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Topic: High-priced pay-per-view in 30 days proposed
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Mike Blakesley
Film God
Posts: 12767
From: Forsyth, Montana
Registered: Jun 99
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posted 05-23-2010 09:24 PM
This came in our email from NATO so I don't have a link to its original source. It talks about the "selective output control" legislation which was passed by Congress, and the new idiot idea from studios to put movies on pay-per-view 30 days after their theatrical debut.
They just won't be satisfied until they kill us, will they?
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MEDIA & MARKETING
MAY 22, 2010
Hollywood Eyes Shortcut to TV
New Films Would Hit Homes in 30 Days
By LAUREN A.E. SCHUKER and ETHAN SMITH
Major Hollywood studios and one of the country's largest cable operators are in discussions to send movies to people's living-room TVs just weeks after films hit the multiplex, a step that would shake up film distribution.
During a cable industry convention last week, executives from Time Warner Cable Inc. made the first formal pitch to the Hollywood studios for what is known as "home theater on demand." The cable company presented a variety of scenarios. But the main one, which has received early support from some studio executives, would allow consumers to watch a movie at home just 30 days after its theatrical release—far earlier than the usual four months—for roughly $20 to $30 a pop.
That proposal is still being debated and talks are fluid. People close to the matter say that several studios could sign on to a version of it as soon as the fall, making the first movies available on such a system by the end of the year or early 2011.
Among the studios who have reviewed the proposal are Time Warner Inc.'s Warner Bros., Walt Disney Co.'s Disney Studios, General Electric Co.'s Universal Pictures, Sony Corp.'s Sony Pictures, Viacom Inc.'s Paramount Pictures and News Corp.'s Twentieth Century Fox. News Corp. is the parent company of The Wall Street Journal.
While the plan could be a boon for consumers, it stands to be highly disruptive for the movie business, particularly theater owners. Hollywood would essentially be overhauling the "windowing" system which has sustained the industry for years.
Studios now maximize revenue by staggering a movie's theatrical release date and the window, or time period, when it is released later on DVD or cable TV. DVD sales don't diminish a movie's box-office take, since the discs are sold long after a theatrical run.
But maintaining windows has grown more difficult as consumers have grown accustomed to an array of devices that make it easier watch movies whenever and wherever they want.
For years, theater owners have closely guarded the theatrical window to preserve revenues. But as Hollywood's own fortunes have declined recently, studios have become more willing to challenge that system. Though box-office receipts were up by 10% last year, based almost entirely on the success of higher-priced 3-D movies, that hasn't been enough to compensate for the sharp decline in DVD revenues, which have dropped by 27% since their 2004 peak of $12 billion, according to Adams Media Research.
Early this year, Disney Chief Executive Robert Iger caused a furor among theater owners when he announced that the company would release the DVD of "Alice in Wonderland" roughly four weeks earlier than usual, shortening the exclusive theatrical window to three months from the traditional four.
Premium video on demand offerings would only create incremental revenue at first, according to industry experts, who say that an average studio, which releases roughly 20 movies annually, would initially stand to bring in just $100 million in additional revenue a year. However, the studios believe they must aggressively respond to rapidly changing consumer habits in order to retain control of their business models.
Many studio executives remark that the music industry was slow to adapt to consumer demands and was powerless when new technologies upended their industry.
Time Warner Inc. Chief Executive Jeff Bewkes highlighted the balancing act at an investor conference in March, saying: "We have every interest in maintaining the strength and the resources of our theatrical distributors to make the film in a theater experience, a live experience. It's also true that people demand the films earlier in their home." (Time Warner spun off its cable operations into a freestanding company in early 2009.)
Theater owners argue that early home-viewing options would eat into ticket sales.
Tony Kerasotes, chief executive of Kerasotes Showplace Theatres LLC, said that an offering like Time Warner Cable's "would be very destructive to our business," noting that plenty of films continue to do big business in their fifth or sixth week at the box office.
"A lot of theater owners would be resistant," he said. He described a possible scenario in which exhibitors might refuse to show films that were offered too soon on video on demand. "I would hate to see things to come to that, but I could see it happening if things get bad enough."
Despite concerns over theater owners, some studios could decide to test a Time Warner Cable's proposal with smaller movies—what one media executive called a "trial balloon." That would give other studios a chance to gauge the level of theater owners' opposition, along with the damage the offering would do to DVD sales.
There are other obstacles. Premium cable channels like HBO have pre-existing deals with movie studios. A new V.O.D. offering could complicate those arrangements, which are based on pre-established release windows. Companies such as Netflix Inc., which offer movie rentals, would be less affected because they make movies available several months after they have run in theaters.
Not all the studios are eager to make their movies available at home while they're still in theaters. News Corp.'s Twentieth Century Fox Chairman and CEO Jim Gianopulos has told exhibitors that while his studio is exploring premium V.O.D. offerings, it is contemplating making movies available only during the period after they leave theaters.
Viacom Inc.'s Paramount Pictures doesn't appear likely to sign up initially, according to a person briefed on the proposal.
Other studios, however, have expressed strong interest in pursuing premium video on demand, especially in the wake of massive losses from declining DVD sales and a tough economic climate that has forced studios to make fewer films.
Sony Corp. has experimented with early release of its own studio's films to its Internet-enabled Bravia televisions. Last year, for instance, it offered Bravia owners the chance to watch "Cloudy With a Chance of Meatballs" for about $25 a month before it was released on DVD.
Sony has also explored licensing films from other studios, but has gotten little traction to date.
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Edward Havens
Jedi Master Film Handler
Posts: 614
From: Los Angeles, CA
Registered: Mar 2008
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posted 05-26-2010 02:16 PM
The Paramount Decree has not been actively enforced in many years. To this date, Mann Theatres is wholly owned by Paramount Pictures and Warner Brothers Pictures. Loews Theatres was wholly owned by Tri-Star Pictures from 1985 to 2002. Cineplex Odeon was 49% owned by Universal Studios during the 1980s and 1990s.
Fact of the matter is, no matter what harebrained home viewing scheme that's been thrown out by the studios since the mass acceptance of television, it either was soundly rejected by consumers, embraced by a niche group that didn't affect overall cinemagoing, or temporarily caused a dip in attendance. In 1989, we did not have DVD and Blu-Ray. We did not have XBox and PlayStation. We had only a handful of cable channels, just a couple PPV choice and VOD ability was just taking off. And the internet? Fuggedaboutit. Cinema attendance was at 1.26B that year. In 2009, we got all this and much more, and cinema attendance was at 1.41B. Granted, it's down a bit from the high of 1.57B in 2002, but what it shows is that no matter what, many people still want to get out of the house and be entertained from time to time.
And I guarantee anything remotely hit-worthy (Avatar, The Dark Knight, The Hangover, etc.) will ever show on this PPV scheme as long as it's still earning decent money in theatres.
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Lyle Romer
Phenomenal Film Handler
Posts: 1400
From: Davie, FL, USA
Registered: May 2002
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posted 06-04-2010 06:52 AM
Below is the dumbest argument for simultaneous theatrical and VOD I have ever read. So, let me get this straight. Rather than illegally downloading a high quality bootleg for free somebody is going to pay $20 - $30 for a single viewing?!?!?!?! The way to put a dent in movie piracy is to keep high quality digital copies out of distribution so that the only things available for download are camcorder copies. I don't understand why (with today's technology) screener DVDs are made. Why not develop a secure streaming video box that can be used by the people that normally get screeners?
The napster/music industry argument doesn't work. The music industry put a huge dent in illegal downloading by making songs cost .99 to download. The other myth about illegal downloading is that people do it because they want the content when they want it on whatever device they want it. No, they illegally download because they want it for free.
If the studios want to do this short 30 day to premium PPV then the film terms should go way down as soon as a movie is available on PPV. This way theaters can charge less for month old movies and be price competative with the PPV on a per viewer basis.
As Mike said and I have said in the past, the recent decline in DVD sales is due almost completely to Netflix and Redbox making it so cheap to rent. There are very few movies that are good enough to be worth owning for $20+ when you can rent them for $1.
Here is the text of the commentary from Hollywood Reporter (that was sent to me via NATO email):
quote:
Hollywood Reporter
Commentary: It's time for an early VOD window
Day-and-date distrib'n model for films could eliminate piracy
By Schuyler M. Moore
June 2, 2010, 05:53 PM ET
Boy, the times they are a changin'. Just a few months ago, Disney fought a major battle just to move up the DVD window for "Alice in Wonderland" to 12 weeks after its theatrical release. But now, a cold wind of piracy and drooping DVD sales is forcing all the studios to look hard at closing the window and going day-and-date for at least VOD, though the first step might be a 30-day hold-back as a sop to theaters.
It is none too late to close the window because right now we have, in order, the theatrical window, the piracy window and the VOD/DVD window. Gee, I wonder whether there is any relation between increasing piracy and sagging DVD sales? Do you think the music industry might offer a useful analogy?
The first indication that studios are getting serious on this issue was the recent FCC waiver, permitting them to encode VOD programming with a signal that will disable recording technology until the earlier of 90 days after the theatrical release or the date of the DVD release. This ruling was requested by the MPAA specifically to let studios prevent copying of films that are distributed by VOD commencing any time after the theatrical release, and one doesn't apply for a concealed-weapon permit unless one plans to use it.
The latest sign of changing winds came from a story on the front page of the Wall Street Journal that Time Warner Cable was pitching the studios to release films on VOD shortly after theatrical release. Given the secrecy with which these discussions typically take place, the "leak" of the story likely was an intentional trial balloon to see how loud the theaters would kick and cry, for movie-house owners are the only impediment to closing the window.
The primary purpose for this paradigm shift is to protect content and stop piracy. The film industry must offer a legal alternative to satisfy the demand for films during the current piracy window, or it risks being Napsterized by illegal downloads, as was the music industry.
With authorized downloads, it is possible to limit the copying and sharing of films beyond the home and mobile devices of the recipient. In contrast, pirated films can be shared freely over peer-to-peer networks; many films are pirated online before the popcorn is gone on the first screenings. I have talked to kids from around the world who brag about the ability to download perfect-quality films and watch them on a large-screen TV within days of the U.S. theatrical release -- if not before. No wonder DVD revenue is being hammered.
Another important reason for this shift is to use the advertising expenditure that accompanies the theatrical release to best advantage, instead of having to gear up the marketing machine for each window.
Although this window-shattering approach causes angst to theaters, the angst is more emotional than economic for several reasons: First, the size of the current VOD market is not substantial enough to have a significant impact on any other media. Second, VOD usage typically is an incremental increase and does not cannibalize other media. For example, VOD is not a replacement for the primacy of the theatrical release; people like to get out of the house, and theaters offer a group emotional experience that transcends the home experience.
The most commonly expressed fear about moving up the VOD window is the risk of piracy, but this fear is misplaced. VOD over the Internet is targeted at consumers who are more technologically savvy -- and thus more likely to pirate a film if no legal downloading alternative is available. Although all copy-protection technologies can be circumvented, VOD is more secure than DVDs because DVDs use a single, uniform method of protection, which was broken long ago by a program now widely available for free, whereas VOD protection can be updated at will to limit the ability of the films to be copied or shared. Thus, the fear that VOD will result in more piracy is a bugaboo.
In summary, (a) there is an incremental increase in revenue to be made off VOD with an early window, (b) films delivered via VOD are more secure than DVDs and (c) providing an early VOD window is likely to eliminate piracy for all but a hard-core few that are willing to commit crime just for the fun of it.
VOD in an early window is a distribution model whose time has come, and you don't need a weatherman to know which way the wind blows.
Schuyler M. Moore is a regular commentator for The Hollywood Reporter. A lawyer at Stroock, he is the author of "The Biz, Taxation of the Entertainment Industry, and What They Don't Teach You in Law School." He is an adjunct professor at UCLA Law School and the UCLA Anderson School of Management. He can be reached at smoore@stroock.com.
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