Comcast announced that they will begin offering certain HD video on demand titles the same day those titles are released on DVD. Comcast joins other operators, including DirecTV, which are experimenting with same day VOD (or PPV in DirecTV’s case) releases. These developments are shrinking typical release “windows,” which normally have a 30 to 45 day delay between DVD and VOD/PPV releases. Hollywood studios and their content distribution partners (Comcast, DirecTV, etc) are experimenting with same day releases to figure out the impact on revenue models. Studios have historically made the lion’s share of their motion picture release revenue from DVD sales and rentals. They now want to find out if they can match (or hopefully exceed) DVD release revenue with VOD and PPV revenue. Hence the release experiments.
Should these release experiments prove successful, there is even talk of theater and VOD releases happening simultaneously. In this possible future scenario, consumers could go to the theater for $10 to watch a new movie release, or they can order the new release on demand for viewing in their “home theater” for $30. We’re a long way off from that, but these shrinking release windows are pointing in that direction. There are competitive implications hidden in these experiments as well. Vertically integrated media companies like Time Warner for example, may have the opportunity to provide Time Warner Cable with blockbuster releases on better terms (or windows) than Time Warner Cable’s competitors. Or maybe Comcast’s market power allows them to negotiate better release window deals than their competitors. Telecom competitors like Verizon will have some negotiation leverage as well. Their vast wireless distribution network gives them an advantage over cable competitors. Movies are extremely valuable in the multichannel subscription video competitive landscape. All service providers should watch these developments closely.
2 thoughts on “Shrinking Movie Release Windows May Harbor Competitive Advantage”
Wouldn’t there be some serious antitrust concerns if cable companies started getting preferential treatment for movie releases?
What’s the studios take on that $30 – 99%!