Would you ever consider paying $30 to rent a movie on a one-off basis? Me neither. But that is exactly what some of the big Hollywood studios are rumored to be pitching for in a service that’s been labeled ‘Premium VOD’.
Hollywood Struggling To Evolve
In the same way the music industry failed to evolve with the technology almost a decade ago, the movie industry is failing to realize the business model of old is dying due to the Internet, online video, and consumer expectations.
The record labels are only now just realizing they need to embrace rather than fight the Web, and it seems Hollywood is intent on making the same mistakes; holding on to the past by its nails.
Premium VOD Plan
According to Bloomberg, Sony Pictures, Warner Bros. and Disney are talking with In Demand, a partnership between Cox Communications, Comcast, and Time Warner Cable about streaming films to customers within weeks of them having first runs in theaters. Disney is also keen to stream content to other Web-connected devices, including the PS3 and Xbox 360.
The waiting period between theatrical release and streaming hasn’t yet been decided upon. And nor has the price. But the latter is expected to be somewhere between $20 and $30. This compares to around $5 for a typical VOD rental, and around $8 for a ticket to a movie theater.
This means that you’d need at least four people to be watching the film to make it worthwhile, and even then it’s a colossal amount of money to charge for what is a one-off rental delivered with very little in the way of overheads by the studios.
Conclusions
‘Premium VOD’? More like ‘Extortion VOD’. I get it, we all get it, Hollywood studios are struggling to make ends meet what with the recession and DVD sales tumbling year-on-year.
But rather than plan something surely destined to fail, why not spend that time and money evolving to better fit into the new reality. Which means offering consumers VOD options at a reasonable enough rate that they won’t even consider illegal downloads.
