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Disney on Premium VOD: ‘Nothing Substantial Has Come of It’

Despite attempts by Disney to explore the premium VOD window — which offers up home video versions of movies closer to their theatrical release — “nothing substantial has come of it,” the studio said.

That should give theater owners a little bit of relief as exhibitors worried that earlier than usual VOD releases would leave them with empty seats. They might have a few more years to remain calm, outside of the continued experimentation by independent filmmakers and smaller distributors.

“I don’t see any substantial changes (in premium VOD growing from the major studios) in the next few years,” said Walt Disney Studios president Alan Bergman on Wednesday at the Bank of America Merrill Lynch 2014 Media, Communications & Entertainment conference.

Instead, Disney is focused on digital ownership through the electronic sell-through window, which generally makes films available through digital retailers three to four weeks before disc releases.

“We’re trying to jumpstart electronic purchases and it’s been effective,” Bergman said. “It will be something we will continue to do.”

That’s especially true as consumers shift away from building large physical DVD and Blu-ray libraries at home, with disc sales off around 8% to 10% each year, Bergman said. On the flipside, digital sales are up 37%.

“Clearly the physical business has had a difficult five or six years and continues to decline,” said Bergman, although he stressed “it’s still a very significant business,” that’s expected to generate $8 billion in 2014. “We have titles people want to buy on physical but digital is the future and that’s why we put resources behind movies on demand. In the longterm, we want people to buy our movies on digital platforms.”

SEE ALSO: Premium VOD War Is Back: Disney, Sony Early Releases Sure to Enrage U.S. Exhibitors

To encourage more digital sales of its titles, Disney launched the Disney Movies Anywhere service in February that enables users to watch Disney, Pixar and Marvel movies online and on the go, while providing them exclusive extras and rewards.

The service’s app has been downloaded over 4.5 million times so far, Bergman said.

The goal is to now expand Disney Movies Anywhere to make it accessible on more devices and function with more retailers, not just Apple’s iTunes store.

“The goal is interoperability,” Bergman said, to let consumers “buy a movie where they want and watch it where they want.” He did not specifically mention new kinds of deals Disney would make, nor UltraViolet, the digital storage locker most studios, retailers and electronics makers have backed to boost digital purchases.

SEE ALSO: Will ‘Veronica Mars’ VOD Release Kickstart New Trend in Hollywood?

With a strong slate of tentpole films coming from the studio in 2015 and 2016, and “Frozen” and Marvel Studios releases performing strongly at the box office, Bergman naturally pushed the moviegoing experience at the multiplex.

“We want these movies to be seen in theaters,” he said. “They’re the best place to see these movies.”

But “theater owners need to make sure that the experience is great,” he stressed, referring to the quality of seating, sound and picture. “If we both hold up our bargain, we’ll be in good shape.”

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