Paramount has signed a deal with In Demand that will funnel the studio’s current movies and some of its library titles to the video-on-demand giant.
“Four Feathers” has already started showing up in VOD, and “The Hours,” “How to Lose a Guy in 10 Days,” “Star Trek: Nemesis” and “Jackass: The Movie” are in the VOD pipeline.
In Demand regards the signing as a coup because Par and Blockbuster Video are sister companies within Viacom; Blockbuster regards VOD as a natural enemy that robs videostores of customers who decide to stay at home and rent movies from the comfort of their living rooms.
“I think Paramount realized that it has an obligation to explore every additional form of revenue available in the marketplace,” said Steve Brenner, prexy-CEO of In Demand.
Jim Stroud, media analyst and head of Blackbird Communications, said that, through its corporate ties with Blockbuster, Paramount will be uniquely situated to track the effect of VOD rentals on the sales and rentals of Par movies on DVD and videocassette.
If DVD/cassette revenues don’t fall off substantially as a result of movie rental on DVD, Par may be emboldened to shorten the exclusive videostore window, which now averages 45 days and frustrates Brenner. In Demand has published studies showing that when studios experiment with getting movies more quickly into video-on-demand, VOD rentals go up noticeably.
Brenner cites VOD’s advantage over DVD rentals: People can order VODs more easily, they can pause and rewind the movie like a prerecorded cassette in a VCR, there are no late fees, and the studios get more money from each rental than they do from that of a DVD or cassette. Paramount pockets 60% of each VOD rental dollar, a percentage that drops a bit if the window delay stretches beyond 45- 50 days.
With the Paramount deal, In Demand now has VOD rights to the movies of every major studio except Walt Disney. Stroud said Disney keeps holding back at least in part because its animated movies usually sell so well on DVD and cassette and the studio is afraid VOD will cannibalize those revenues.