The Stupidity Of The 30 Day Studio Window
The Wall Street Journal broke a story that Time-Warner Cable was making a pitch to studios for a 30-day VOD window for a $20 – $30 price point.
It’s moronic.
But it’s also interesting.
It’s another iteration of the ongoing interest in figuring out whether VOD will ever really work… because it still doesn’t on a studio level. It never really worked at 24 weeks… it doesn’t really work at 16 weeks… so “let’s try it at 4 weeks at a premium (though non-“fight”) price.”
WSj notes the DVD downturn as a motive for all this window-bashing… and I don’t know if the authors know how right they are. Studios, it is seeming more and more, are looking for The Next DVD… and they are willing to be reckless to try to create it when it cannot be created.
The sad part of this idea – the 28 day window – is that it is wrong in almost every way. Besides cannibalizing theatrical, which is now more important than it has been in a decade, it seems to completely misunderstand the market. In the arthouse world, things are quite different… anything to find a wider paying audience is worth the risk. But for studio movies, I have never seen a study of any kind or any historic fact that suggests that the audience that wants to see wide release movies will be motivated to pay a premium for home viewing after 30 days of not going to the movie theater… and we are talking about pricing that is roughly the cost of two movie tickets.
The one category of films that might work in this 30 day idea is blockbusters that have a lot of buzz after 30 days and may have an audience of impulse buyers.
But again… big problem. The vast majority of impulse buyers of movies are… under 25s. But they don’t control their own purse strings, as a rule. The first time the cable bill arrives with an extra $50 charge on it for a single viewing of MacGruber and Iron Man 2 is the last time Billy gets to buy VOD in all but a tiny percentage of households where money is loose.
The value proposition for high priced PPV is diminished dramatically by a 30 day window. If you are going to jeopardize the theatrical window, you might as well just take the leap to day-n-date and see how it works with non-franchise movies. My take is that after a honeymoon of a few months – people love to kick tires – it starts being a clear loser. But let’s find out.
The slippery slope here is that you start the experiment with the $20 – $30 idea. It has mixed negative response. So the logical next step is adjusting the price. But as the price drops, the cannibalization starts to grow.
What journalists who write about this subject tend to miss is that the “old-fashioned” idea of windows in the marketplace is not actually what I think anyone in the industry thinks is the future. Right now and for years now, there are five or six windows. In the future, there will only be one real window… between theatrical and post-theatrical.
It seems to me that anyone excited enough about a movie to pay $20-30 to see it isn’t going to wait 30 days for the privilege especially when they don’t actually “own” it after like with a DVD. Then again that $20-30 will allow multiples of people to see it depending on the home theater set up. I could picture casual movie goers who don’t see a movie every weekend coughing up the money for the latest-greatest and inviting friends over or something.
I think this VOD concept for certain blockbusters could work…but only on opening weekend.
Imagine the next BATMAN opening on 4000+ screens AND offered for $20-$30 on VOD that same weekend.
There would still be massive attendance for the film in theaters and the VOD would go through the roof for those who don’t want face the crowds. Even someone who went to the theater on Friday, might spend all day Saturday thinking about it and order it on VOD that night. Talk about a theater and VOD double dip.
Then after the first weekend, pull the VOD and watch the first $400 million 3 day weekend cash flood in.
But waiting 30 days — no thanks. DVD is only 60 days away from that. I can (and others) will wait.
“In the future, there will only be one real window… between theatrical and post-theatrical.”
David: Are you saying this is the best way to go, or simply that it’s where the industry is headed? I know you’ve written a lot about how bad collapsing windows is for the industry. But do you mean reducing the number of windows, or reducing their size?
I guess I’m asking where you think the industry needs to be, with respect to windows, to be as financially healthy as possible.
One economics columnist, whom I read on a regular basis, predicted this last year at the beginning of the holiday season. Read the section on “Price Competition.”
There is no way in hell I’d pay $20-$30 to see a movie at home 30 days after its theatrical release. Movies hit OnDemand the same day they are come out on DVD (so 3-4 months after the theatrical release), and the window from theaters to cable keeps getting shorter and shorter. 8-9 months (and sometimes even less) between theaters and Starz, HBO, or Cinemax. I can’t see this idea catching on.
Chucky, that person is not a reputable economist. He is a crazy person trying to sell books to gullible and ignorant souls.
That economist is not looking at three or six or 12 months down the road. He is looking at the longer term. Instead of going Bill O’Reilly on me, jeffmcm should read this passage:
With the rise of YouTube and … Netflix, the movie theaters are going to be limited to date night for teenagers. The movie theaters will not be crucial to the distribution of profitable movies.
It’s already happening on the arthouse side of the industry and it’s bound to happen with mainstream movies.
Chucky: “Teenagers” already dominate the multiplexes. But because of Netflix and YouTube (both of which are primarily popular with the same demographic), other people are going to abandon theaters?
Look, older audiences *already* abandoned theaters. And they are not abandoning them in greater numbers now because they’d rather fire up Dog Plays The Piano on YouTube. Theaters survived television, pay cable, and video tape, and they’re surviving the advent of fancy home theaters. Business may well dwindle, as new entertainment technologies emerge to compete. But they’re not going away.
People have been paying to get out of the house and sit somewhere in the dark for longer than movies have existed. All these other entertainment options we have now are great to have, but they haven’t even put a dent in theatrical revenues, despite all the paranoia (see the 2005 slump paranoia, which was nonsense at the time and demonstrably so now) that it’s dying.
Netflix, YouTube, etc, have proven to be popular and successful. But if you’re gonna tell me they’ll *replace* theaters, I’m going to laugh in your face and not stop laughing until you show me even one single fact that shows it to be happening.
It’s all well and good to speculate that new entertainment technologies will make some old one obsolete. But with zero supporting evidence, that’s exactly what it is: speculation.