Premium VOD Reactions

There has been a lot of discussion of the studio push toward premium video on demand (VOD) lately. A small number of studios have made plans to experiment with releasing films on VOD at $30, just two months after their theatrical premiere, essentially creating another window where studios can seek to profit from controlled access to their films. This approach was given its initial test run this week when Sony released the Adam Sandler comedy, Just Go with It (an oddly appropriate title, given the circumstances), despite significant complaints from theater owners, who feared that premium VOD would cut into their profits.

Now that Just Go With It has been out on premium VOD for one weekend, we have a small baseline for thinking about how this might work. As Daniel Frankel at The Wrap points out, Sandler’s film grossed about $200,000 this weekend on 265 screens, a 26% drop from last week’s gross. Of course, such a comparison tells us little. Given that the film debuted before the new VOD window was announced, audiences couldn’t have predicted how quickly it would be available for home viewing, and once it was known when it would be available, it’s unclear how many people delayed seeing it so they could view it at home. Matt Dentler suggests in his reading of the numbers that the impact was “non-existent,” but I think that reading relies too closely on looking at one small set of numbers. I think we need to see how audiences respond once they become conditioned to the new windows structure before we make any real conclusions about the potential impact.

Further, as David Poland observes, this is likely only the first stage of experimentation with price points and windows for premium VOD. Noting that DirecTV did little to promote the premium release of Just Go With It, Poland predicts that the $30 price point will decrease, while the window between theatrical and premium VOD will shorten, as well. Thus, it seems significant that MPAA head Chris Dodd is reaching out to theater owners regarding the conflict over premium VOD, stating that the industry doesn’t make movies for “the small screen,” not so much because Dodd said anything of substance, but because it’s an acknowledgement that our perceptions of film as a medium continue to evolve to the point that we may have little reason to refer to those giant boxes out by the mall.

2 Comments »

  1. Jason @ Filmmaking Stuff Said,

    April 26, 2011 @ 12:50 pm

    I think if people want to watch movies, they will do so. In this example, they keep taking about a movie that I have no interest in seeing. If the movie was good, I’d go to the theater. If it was good and I was feeling lazy, I may buy the movie via VOD. But since the movie is not interesting to me, I’ll just wait – same as usual – and watch it sometime… Maybe.

  2. Chuck Said,

    April 26, 2011 @ 1:58 pm

    You’re right, of course, that in many ways, this is nothing new. People will pay to watch a movie in the format that fits their needs at the “best” available cost (conscious and unconscious, financial and other). I think the concern that theaters have, and it’s likely an overreaction on their part, is that eventually the costs of seeing a movie in a theater–ticket costs plus gas plus snacks plus travel time–will eventually outweigh the costs of waiting a few days or weeks to watch that same movie at home.

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