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Cable Technology Feature Article

September 28, 2010

Hollywood Flirting with "Premium On-Demand" Movies

By Tracey E. Schelmetic, TMCnet Contributor

With declining revenue both in movie theaters and in DVDs, film studio executives are looking for other ways to capture revenue. The latest idea is by debuting so-called “premium” on-demand movies, which are movies that can be streamed to the home either while the movies are still in movie theaters or shortly after they wrap up their cinema showing, long before they appear on DVD or Blu-ray. When they say “premium,” they're also talking about the price: Bloomberg (News - Alert) has reported that movie studios have high hopes that such premium on-demand rentals could run viewers as much as $30 per viewing. Talks are reportedly underway at some of the major studios: Sony, Warner Bros. and In Demand, which is an on-demand cable service in cooperation with Cox (News - Alert), Comcast and Time Warner Cable.

Warner Bros. might be the first to give the idea a go, according to a Time Warner Cable Executive, with newer movies appearing in the $20 to $30 range. Disney also appears to be poised to try the premium video-on-demand experiment with content appearing early next year. There are rumors that Disney's delivery method of choice will be via Xbox Live or Sony’s PlayStation 3.

For the model to succeed, the movies would have to appear either simultaneous to movie theater release or very shortly thereafter. It's unlikely anyone would pay $30 to watch a movie they can get under the umbrella of their nine dollars a month Netflix plan in a few weeks.

Sony Corp. has already flirted with the model by offering the movies "Hancock" and "Cloudy with a Chance of Meatballs” on Bravia T V for $24.95, to lukewarm success.

Over the past decade, Hollywood has seen a decline both in theater viewership and DVD purchases. Blu-Ray technology, which was supposed to save the industry and rake in big bucks, has been slow to take off.

Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Jaclyn Allard