Goal is to combat sagging DVD sales

Studios are collapsing video-on-demand windows in an effort to combat sagging DVD sales and cheap Redbox rentals.

Sony, which tested its first simultaneous DVD and VOD release in August, will test four more during the fourth quarter, including “Angels and Demons” (Nov. 24) and “Julie and Julia” (Dec. 8), and Universal will also do so with “Bruno” on Nov. 17. Warners, the leading studio proponent of simultaneous DVD and VOD releases, will bow “Orphan” (Oct. 27), “Four Christmases” (Nov. 24) and “Terminator: Salvation” (Dec. 1) that way.

However, the studio will hold back VOD of “Harry Potter and the Half-Blood Prince” and “The Hangover” for one week after their December DVD bows to protect holiday disc sales and keep major retailers like Wal-Mart happy. Fox, which released “Bride Wars” simultaneously on both platforms earlier this year, kept a short window for the VOD launch of “Night at the Museum 2″ (10 days).

The rest of the slated big holidays releases will debut on VOD two to four weeks after their DVD arrival. According to Rentrak, the average VOD window is 21 days after DVD release.

The stakes are high for studios: They don’t want to hurt sales, but they also want to make VOD an enticing rental prospect at a time movie rentals are making a resurgence. Studios vastly prefer VOD to disc rentals because they get a bigger cut of each transaction, regardless whether it occurs online or through a cable box.

They’d much rather consumers watch movies on VOD than pay $1 for a Redbox rental; part of the reason several studios tried to impose revenue-sharing deals with the kiosk company was to ensure they got a bigger piece of each transaction.

This fourth quarter will be a crucial period for studios. The sour economy could exact a toll on DVD and Blu-ray disc purchases, with more consumers potentially opting to rent rather than own. By shortening VOD windows, studios are trying to get make sure they get a nice slice of these transactions.

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