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Cable Technology Feature Article

April 01, 2011

Hollywood Due to Launch VOD Service; Theater Owners Furious

By Michelle Amodio, TMCnet Contributor

“Hooray for Hollywood” is not exactly what theater owners are singing these days.

The movie capital of the world is firming up its plans to launch a premium video-on-demand service which will release movies to at-home viewers a mere 60 days after their theater premiers.

The deal, which most movie theater owners wished was a hearty April Fool’s Day joke, will be featured by DirectTV late next month, with Comcast (News - Alert) and VUDU trailing right behind.

According to insiders, Warner Bros., Fox, Sony and Universal are all on board with the deal. For users, the pricetag of each movie is, no joke, $29.99.

The movie releases will be available to users before they're out on DVD, which is typically three months after leaving theatres. Netflix gets those movies even later than that. The $29.99 fee is for a two or three-day rental.

Apparently Hollywood thinks that people will jump at this opportunity. Once you calculate the cost of packing up the family, purchasing tickets, overpriced concessions, gas to and from the theater and other costs associated with going out to the movies, the big guys feel families will look at this as a steal.

Theater owners are simply fuming about the news.

"(T)he length of a movie's release window is an important economic consideration for theater owners in whether, how widely and under what terms they book a film," National Association of Theater Owners president/CEO John Fithian said in a statement.

"Theater operators were not consulted or informed of the substance, details or timing of this announcement. It's particularly disappointing to confront this issue today, while we are celebrating our industry partnerships at our annual convention – CinemaCon – in Las Vegas," Fithian continued.

"In the end, the entire motion picture community will have a say in how the industry moves forward. These studios have made their decision in what they no doubt perceive to be their best interests. Theater owners will do the same." (via Reuters)

Reps for DirecTV (News - Alert) refused to confirm that a date certain had been established for Premium VOD.

"We're still in talks," a DirecTV spokesman said. "The situation is still fluid."

Michelle Amodio is a TMCnet contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Janice McDuffee