You will be redirected back to your article in seconds

TW busts windows in VOD move

Conglom aims to take back control of homevid biz

Leading Hollywood’s effort to take back control of the home­vid biz, Time Warner is planning to launch a premium video-on-demand service in the coming months and lengthen the delay that prevents rental companies like Netflix and Redbox from offering new releases.

Conglom will significantly shorten the window between a film’s theatrical release and its VOD bow from 90 days to 60 and will charge about $30 for the pic on the earlier date, mostly via cable operators.

Company sees premium VOD (which would be offered before DVDs and Blu-rays are released) as an opportunity to collect more coin on films after they bow at the megaplex considering that 90% of their box office is generated within the first four weeks of release.

Time Warner is said to be eyeing a pricetag of $25-$30, though analysts believe such premium services could potentially charge as much as $60, depending on the property.

First title is expected to bow sometime during the second quarter — Time Warner had previously said the rollout would occur during the first three months of the year, but chose to delay the move.

Warner Bros. Home Video declined to disclose whether it had yet chosen a title to test through the new premium VOD offering.

So far this year the studio has released only exorcist thriller “The Rite,” starring Anthony Hopkins, in theaters; it bowed Jan. 28. Liam Neeson actioner “Unknown” follows on Feb. 18.

Time Warner chief Jeff Bewkes hasn’t shied away from wanting to wage war against Netflix and Redbox. Exec said Wednesday that “a clear acceleration in consumer usage” of those movie rental outfits has forced the conglom “to re-evaluate the terms” of its deals with them in order to protect the amount of coin DVD and Blu-ray discs generate at retail.

Bewkes said the homevid biz’s transition to digital is “arguably the area of our business going through the most change right now,” and many other studio toppers would agree.

As a result, the exec wants to protect a lucrative area of Warner Bros.’ bottom line by imposing a longer delay than the 28 days to which Netflix and Redbox have currently agreed before offering up new releases once a DVD or Blu-ray becomes available in stores. That could increase to as much as 45 days, industryites say.

That may not only boost disc sales but also increase the window Warner Bros. and other studios are looking to create with premium VOD.

At the same time, Bewkes told analysts the conglom will consider increasing the price it charges those rental firms for the discs they either stock in their kiosks or offer as digital streams. “The current pricing and window are not commensurate with the value those kind of films are extracting,” he said. “We just think the value that our company should get from that (window) is considerably higher than what is there now.”

Move comes as studios saw the first sign of blood in the water last month: Redbox was caught offguard by the effects of the 28-day delay during the fourth quarter, saying it “severely underestimated” the impact; company lost $6 million-$8 million in revenue from 14 million fewer rentals during the last three months of 2010 as a result.

While Redbox has clearly been impacted by the delay, there has been no slowdown in the number of new customers drawn to Netflix’s streaming service, especially its digital streaming service — Netflix now has more than 20 million members.

Time Warner has discussed its premium VOD plans for some time and got the greenlight to launch such a service last May when the Federal Communications Commission approved a request by the Motion Picture Assn. of America to allow recently released films to be transmitted to U.S. households via a “secure high-definition transmission line from their cable or satellite providers” prior to DVD or Blu-ray release.

The changing homevid sector made shaking up Hollywood’s release windows inevitable. Traditionally, pics were released on DVD four months after their theatrical run; on VOD 45 days later; on pay TV channels 18 months after that; and then shown for free on ad-supported broadcasters two to three years later.

Studios have already been experimenting. Last year Disney made “Alice in Wonderland” available 88 days after its theatrical run. Paramount had previously made “G.I. Joe: The Rise of Cobra” and “The Goods: Live Hard, Sell Hard” available after 88 days in theaters.

So far, Par has said it’s not interested in pursuing a premium VOD strategy.

Naturally, the decision has ruffled the feathers of the National Assn. of Theater Owners, whose members believe a shorter theatrical window would hurt the amount of money they can collect at the box office.

Patrick Corcoran, director of media and research for the National Assn. of Theater Owners, told Variety the org hasn’t changed its stance on the issue since Warners first alluded to a proposed VOD platform last year.

In June, NATO made its opinion clear when it placed an ad in the trades, describing shortened windows and price points as “a potentially destabilizing change in the existing windows platform” (Daily Variety, June 16). Corcoran said studios need to continue to work with exhibs to find a suitable VOD platform for both parties.

(Andrew Stewart contributed to this report.)

More TV

  • Taika Waititi Star Wars IG-11

    'The Mandalorian': Taika Waititi Compares Droid IG-11 to the Terminator

    Taika Waititi wants to clear up any confusion surrounding his character in the Disney Plus “Star Wars” TV series “The Mandalorian.” “The droid’s name is IG-11, a lot of people presumed it was IG-88 because he looks very much the same. [It’s] IG-11 actually.” Waititi explained to Variety. “I’ll be very honest with you. I [...]

  • Disney-Plus-Logo

    Disney Plus Launch Snafus: What Went Wrong?

    For some users, Disney Plus was a Disney Minus on its big launch day Tuesday. In its Nov. 12 debut, the service was beset by multiple problems, including Disney Plus customers being unable to log in to the service, access specific content, or use certain streaming devices — while some who called Disney’s customer service [...]

  • Richard Plepler HBO

    Former HBO Chief Richard Plepler Close to Signing Apple TV Plus Production Pact

    Former HBO chief Richard Plepler is close to signing an exclusive production pact with Apple TV Plus. Apple declined to comment and Plepler could not immediately be reached for comment. It’s understood that Plepler plans to launch a boutique production company designed to focus on a handful of high-profile projects. Among his advisors in pulling [...]

  • Byron AllenVariety Inclusion Summit, Inside, Los

    Byron Allen, Comcast to Square Off in Supreme Court on Racial Discrimination Case

    Byron Allen’s racial discrimination case against Comcast Corp. on Wednesday heads to the Supreme Court, where justices will consider Comcast’s argument that the case should hinge on two words: “but for.” Allen filed a $20 billion lawsuit against Comcast in February 2015, arguing that the nation’s largest cable operator was discriminating against his company, Entertainment [...]

  • Point Horror Books

    HBO Max to Develop Anthology Series Based on 'Point Horror' Books (EXCLUSIVE)

    HBO Max is developing a series based on Scholastic’s “Point Horror” books by R.L Stine, Variety has learned exclusively. The project hails from Picturestart and Lionsgate Television. The show, which is currently titled “Point Fear,” is described as an anthology series that exposes the horrors of being a teenager. Each episode of the show will [...]

  • The Mandalorian

    TV Review: 'The Mandalorian' on Disney Plus

    SPOILER ALERT: This review discusses some spoilers for the first episode of Disney Plus’ “The Mandalorian.” A vicious killer with a tragic past and the faint glimmers of a beating heart is no stranger to television, a medium particularly suited to telling winding stories about rises, falls and redemptions. And yet it’s still something of [...]

  • Roger and Cowan Promotions

    Rogers & Cowan/ PMK Promotes Executives in Entertainment Division

    Rogers & Cowan/PMK has promoted Lindsay Galin, Jeff Raymond, Dennis Dembia, Michael Donkis, and Marian Koltai-Levine to executive positions in its entertainment division. Galin and Raymond have been named co-presidents of talent. Dembia and Donkis have been promoted to co-presidents of entertainment and business strategy, and Koltai-Levine will serve as president of film, content and [...]

More From Our Brands

Access exclusive content