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News Corp., Disney team on VOD

System to shrink time between theatrical, ppv bows

News Corp. and the Walt Disney Co. will start the inevitable process of closing the window between the premiere of movies on homevideo and cable by launching a video-on-demand service next year that will debut first-run theatrical films before they are available on pay-per-view.

That window has traditionally been 45-60 days.

Neither Disney nor News Corp. would say how much they intend to shrink the window, but sources indicated it would likely be about 30 days.

In addition, Salil Mehta, senior VP of strategic planning at Disney, said the companies will run those movies exclusively on VOD in that window, in the hope that regulators see the strategy as competitive, not anticompetitive.

The two companies Wednesday formally announced the joint venture to create an Internet-based video-on-demand system that has been in the works for months.

Others ahead

The announcement comes after five other studios formed a joint venture last month to do the same thing. Both are expected to launch early next year, although the unnamed Sony-Warner-Universal-Paramount-MGM service could launch by the end of this year. Movies on that service will debut in the traditional PPV window.

More so than the five-studio venture, Disney and News Corp. plan to go after the cable broadband market in hopes of capturing a bigger market than the high-speed Internet market.

At best, Internet download times will be at least an hour; there would be no download time on cable.

The only studio not involved is DreamWorks.

The shrinking of the window after homevideo is both strategic and safe. With far less product to offer than the competing service, the Disney/News Corp. venture needs to have something distinctive.

As had been expected, the News Corp./Disney service will use Disney’s Movies.com Web site, which will become an operating company owned equally by News Corp. and Disney.

The Disney, Miramax and Fox film units then will license movies and “other content” to the venture, such as behind-the-scenes footage, conversations with cast and crew, movie trailers, interactive movie-related sneak previews and additional film footage.

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