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Will cable shatter the DVD window?

Cabler operators, studios contemplate PPV/DVD combo

The major studios and cable operators are closing in on a plan to release a theatrical movie day-and-date with its DVD premiere.

One of the sticking points is the retail price.

One model touted by Brian Roberts, chairman-CEO of Comcast, is to charge about $17 for a movie, which would give Comcast subscribers an immediate showing via video-on-demand, followed by a DVD copy of the movie by mail arriving a few days later.

The studios could live with the Roberts plan because they’d pocket a big chunk of the $17. Comcast insists the revenues would be so robust from the PPV/DVD combination that they’d more than make up for any losses the studios would suffer from a decline in DVD purchases at local retailers.

But the studios remain nervous, because DVD sales account for more than $16 billion a year; the last thing they want to do is jeopardize that mother lode. So any deal would start modestly, with experiments in a few midsized markets to gauge the economic impact.

Another cable-op blueprint would be a standard PPV price of, say, $3.99 to call up a day-and-date title, cutting out the hassle for consumers of shlepping to their local Blockbuster to rent a DVD.

Since DVD rentals in vidstores deliver, on average, less than half the revenue of DVD sales, the studios would be less worried about cannibalization, particularly if they could negotiate a better share of each $3.99 than they pocket from vidstore rentals.

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