Encouraged by a 21% uptick in video-on-demand rentals, Hollywood is offering more of its high-profile films, including Warner Bros.’ “Harry Potter and the Deathly Hallows: Part I,” via VOD the same day that their DVDs and Blu-rays hit store shelves.
At the same time, as studios prep to experiment with premium VOD, a consortium of cablers, satcasters and studios are also readying to relaunch a pricey ad effort to promote Movies on Demand in a campaign that puts a bigger spotlight on viewing films at home.
Comcast, the nation’s largest cabler, in particular, has upped its efforts over the last five years to offer consumers more current films via VOD, especially after rentals of newer titles helped overall VOD sales for the entire industry surge to $1.8 billion in 2010, according to the Digital Entertainment Group.
The most recent “Potter” pic will bow on Comcast’s On Demand and Xfinity TV services and through other VOD vendors starting today. Rentals will start at $5 for standard and $6 for HD versions.
Comcast initially tested its day-and-date strategy, which aimed to eliminate the 45-day window between a DVD launch and VOD availability, in 2006 in two markets before expanding it nationwide with WB’s “The Astronaut Farmer” in 2007. Although not a hit at the B.O., the film outperformed expectations on VOD and encouraged WB and other studios to follow suit with additional titles.
“At the time everyone was nervous,” said Diana Kerekes, VP of Xfinity On Demand at Comcast. But because the film wasn’t a big performer at the B.O., the studio didn’t feel like “they had much to lose.”
Two years later, bigger pics like Sony’s “Angels and Demons,” Universal’s “Bruno” and Sony’s “The Ugly Truth” were released day-and-date, and the biz has grown since then to include Summit’s “Twilight” franchise, WB’s “Inception” and “The Town” and Fox’s “Wall Street: Money Never Sleeps.” “Avatar” was not among them. This month, Disney’s “Tron: Legacy,” U’s “Little Fockers,” Screen Gems’ “Country Strong,” Fox’s “Gulliver’s Travels” and TWC’s “The King’s Speech” bowed at retail and VOD at the same time.
In 2007, 13 films were released day-and-date on Comcast’s service alone. Last year, the tally grew to more than 200. Over 80 titles have been released so far this year, the cabler said.
The results have been similar for VOD distrib In Demand, which in 2007 offered 4% of its films day-and-date. Last year, 60% of its pics, or 130 titles, were offered the same day as their DVD and Blu-ray bows.
Films are available to watch an unlimited number of times for between 24 and 72 hours, depending on the studio. Disney offers films for three days.
Comcast launched On Demand in 2003. Service is available to 20 million of its 22 million subscribers, with older library fare offered for up to $4 per pic. Indie pics released before their theatrical run are offered for $10. Premium VOD would offer studio pics 60 days after their theatrical release for $30.
According to Comcast, video is viewed 350 million times a month on its On Demand service, logging 18 billion views since its introduction. Comparably, Apple’s iTunes service, launched around the same time, has crossed the 10 billion milestone.
Not all the videos are movies, however, Comcast stresses, with TV shows, kids and music fare ranking high.
“Films released the same day as the DVD release are performing extremely well, enticing studios like Warner Bros. to bring more major movies to customers’ homes,” Kerekes said. “In the coming year, we will continue to work with studios to bring our customers more of these movies On Demand and online.”
Comcast was one of at least eight cablers and satcasters to help launch a 12-week, $30 million marketing campaign spearheaded by eight of the major studios last year to promote Movies On Demand, a new brand backed by the slogan “The Video Store Just Moved In.” The campaign hoped to educate digital cable customers on the ease of renting a movie with a remote control through a series of TV, print and online ads.
Ads began March 1 and run through June 6. Effort was not supported by Disney or Paramount.
Those studios are among the 10 distribs onboard the new ad campaign, along with Relativity and Image Entertainment as other newcomers. The 12 cablers include Atlantic Broadband, Armstrong, Bend Broadband, Bright House, Cablevision, Charter, Comcast, Cox, Insight, Mediacom, Suddenlink and Time Warner Cable. Atlantic Broadband and Mediacom are new partners in 2011.
Campaign, which will be relaunched in the coming days with more industry backers, paid off, studios say, with purchases up 18% among new MoD users; and revenue up by 36% among “light users” of the service, adding $2.13 per set-top box.
The effort also boasted a 40% recall rate among respondents surveyed, and after being exposed to the campaign, 12% indicated an intent to use Movies On Demand to rent movies, according to Frank N. Magid Associates.
The timing of the releases — and rental pricing — attracted consumers who don’t want to wait 28 days before Netflix and Redbox can offer the same films, reps said. And with Blockbuster and Hollywood Video stores also shuttering across the country, consumers have found it easier to pick up a remote rather than make the trip to find a videostore.
The renewed ad effort for Movies on Demand “is hoping to keep this trend going,” a rep said.
What should help to make VOD a little more attractive is that studios are willing to promote rentals by offering DVD-like bonus features with purchases. Comcast’s “Deathly Hallows: Part I” release will include four new behind-the-scenes features on the making of the film.
And as consumers demand their entertainment across mobile devices, from smartphones to tablets, Comcast and others are adding to their online libraries, with Xfinity TV customers available to access films on XfinityTV.com.
“Cable companies and movie studios have demonstrated we can provide customers with a product they want, when they want it and at a price they can afford,” said Joe Rooney, senior VP of branding, advertising and social media for Cox Communications and co-chairman of the Movies on Demand initiative. “The current movie rental climate is a pivotal time for us to join together and promote a long list of hit titles to avid movie fans and frequent On Demand viewers, along with light users and customers who are still unaware of the service.”