When Napster and Facebook entrepreneur Sean Parker first revealed his plan to offer major studios releases day-and-date at home for $50, the industry recoiled. Cinema owners in particular balked, fearing their already dwindling audience might start staying away in bigger numbers, while filmmakers were split on the issue. As for the studios themselves, Parker’s idea intrigued them, though not enough to work with him. Instead, it was revealed earlier this year, that Fox, Universal and Warner Bros. were all considering their own variations on premium VOD. Now, one of the biggest tech companies in the world may become their partner.
Bloomberg reports that Apple and Comcast are in talks with Warner Bros. and Universal about going down the premium VOD road, although there are still all kinds of huge questions remaining to be answered. The main issue right now is the studios’ relationships with exhibitors, and they have been trying to negotiate some kind of deal for months now that will keep everyone happy, but to no avail. It’s reached a point where studios are now considering pushing ahead with their premium VOD plan whether exhibitors like the terms or not, but it seems to be a solution no one wants.
It’s also unclear what shape the premium VOD plan might take. Each studio has their own idea of when to offer their new releases digitally, with some discussing a model where 17 days after a theatrical debut, new movies will be available for $50, or four to six weeks from release for $30. And while 2018 is being eyed as the potential launch date for all of this, studios may opt to try it overseas first and see how it works out, before giving it a whirl in the United States.
So, why the urgency for premium VOD? Besides the obvious audience trend toward streaming thanks to Netflix and Amazon, studios are desperate to find a replacement for home video sales which have plummeted over the past decade. It’s a major revenue stream that has taken a huge hit, and so far, nothing has quite made up for that gap — except the rise of digital options.
However, not everyone in the industry is ready to start dramatically closing release windows. Disney is fine with the status quo, but then again, why shouldn’t they be? Each of their movies is essentially a massive blockbuster, and they own two of the biggest IPs right now in Marvel and Lucasfilm. There’s no real urgency for them to race to premium VOD when their films stick around in cinemas for weeks and weeks and each flirt with a billion dollars worldwide.
The question is whether or not consumers will leap at the opportunity to pay $30 or $50 for a new release when Netflix or other services give them plenty of options for a low monthly subscription cost. There’s only one way to find out….