Hollywood will close its initial test run of premium VOD through DirecTV after several of the participating studios offer up their fourth films in the coming months — but that doesn’t mean the end for PVOD.
Twentieth Century Fox, Sony, Universal and Warner Bros. teamed with the satcaster to launch Home Premiere on April 21 to offer select films to rent for $30 around 60 days after their theatrical bows.
Specific terms of the roughly six-month test were not fully revealed at the time of the launch, but the move was considered a way to gauge whether consumers would be interested in ponying up higher rental fees for films before their traditional homevid window.
Despite the ire of theater owners, who feared a new premium window would hurt ticket sales, studios went forward with the test as they increase efforts to find new revenue streams for their pics.
Only 20th Century Fox’s drama “Water for Elephants” is currently available through Home Premiere, which has caused many in the biz to believe the majors and DirecTV are about to shutter the premium VOD window.
But Variety has learned that more films are coming from all of the participating studios to satisfy a four-film commitment with DirecTV before weighing their options to continue a test through other VOD services or add more titles. Some titles aren’t expected until September.
In addition to “Elephants,” Fox has already offered up “Cedar Rapids” and “Diary of a Wimpy Kid: Rodrick Rules”; Sony went with “Just Go With It,” “Battle: Los Angeles” and “Soul Surfer”; U provided “The Adjustment Bureau,” “Paul” and “Your Highness”; and WB’s titles were “Hall Pass” and “Sucker Punch.” Each film was available for two weeks.
All of the deals were made independently, and terms vary per studio given Hollywood’s concern over any signs of collusion.
Studios typically shy away from brokering such VOD deals with a single company in order to generate the most digital dollars, but DirecTV landed an exclusive window after it proved to studios that it had the necessary antipiracy technology on its newer set-top boxes to prevent pics from being illegally copied and distributed, which could have hurt disc sales weeks later during the traditional homevid window.
“We were ready to go and they had the technology,” said one top studio homevideo exec. “They were the only ones that had the security in place.”
A number of other providers, including Comcast, are still perfecting their own anti-piracy tools, however, which will enable studios to reach a wider audience when they’re ready to expand the test of premium VOD later this year.
Home Premiere was available to only 6 million of DirecTV’s 19.4 million subs at the end of March, limiting its impact.
The majors are not disclosing sales figures, but execs told Variety they were “encouraged” by the results over the last several months — enough so that should Home Premiere roll out across a number of providers, premium VOD “could become a viable business,” said one.
At the very least, it’s helped put a larger spotlight on the overall VOD biz, which offers films for around $5-$6 per title starting in the sell-through DVD window.
Still, with every test, there are lessons to take away.
Studios would like to see Home Premiere marketed more heavily. DirecTV agreed to pony up considerable promotional coin around the test as part of its exclusive deal, but despite TV spots and emails and ads sent to subscribers, studios felt the marketing wasn’t on the level expected.
Moving forward, studios are also considering several options, including offering digital downloads of films to own as an incentive to pay the premium price.
The digital version to own would be made available during the electronic sell-through window — the same time when DVDs and Blu-rays typically hit store shelves. Studios already offer that kind of carrot on discs to move more units.
In order to make that work, however, the majors would have to deal with some technical issues like providing a token that can be universally used across a variety of platforms.
They’re eyeing the launch of UltraViolet, later this fall, as a way to solve that very issue, considering the product is meant to provide consumers with a way to buy and play films across a slew of digital devices.
For now, DirecTV remains tight-lipped on the test.
“We don’t publicly discuss the terms of our agreements with our programming partners,” said one spokesman. “We will evaluate with the studios after completing our test and make decisions from there.”