Studios to Cable: Push VOD

Executives Urge Distributors to Exploit Their Edge

By R. Thomas Umstead -- Multichannel News, 10/25/2010 12:01:00 AM

New Orleans — Studio executives are bullish about the future of the video-on-demand business and are continuing to market and promote both current theatrical releases and library titles in an effort to drive revenue for the category.

“We are in the midst of an unbelievable sea change — everybody wishes they had the pipe into the home, and cable has it,” Michele Edelman, vice president of marketing for Warner Bros., said at last week’s Cable & Telecommunications Association for Marketing Summit here.

Over a few short years, the cable industry has transformed the home-video business to the point where VOD now serves as the first home rental window for many movies after their theatrical release.

‘FLIPPED THE WINDOW’
Much of that change is due to recent studios deals with DVD-by-mail company Netflix and retail DVD kiosk company Redbox to delay release of new titles 28 days after they’re available on-demand and for sale at retail.

“We’ve now flipped the window — it used to be rental and retail had a 30-day runway, now we have three or four studios that have a 28-day window before Netflix and Redbox,” Edelman said.

Providing the most day-and-date theatrical releases in its history, Twentieth Century Fox has seen VOD revenue grow four-fold in the past few years on a relatively small number of titles, according to Aubrey Freeborn, senior vice president of marketing and product management for the studio.

“We’re committed to the category and we feel that now is the time for everyone on the studio and operator side to take advantage of all the momentum that we have,” Freeborn said.

One way the studios are looking to seize that momentum is through increased promotion of the short VOD windows. Warner’s upcoming multimillion-dollar campaign for Sex and the City 2 prominently mentions both the movie’s availability on DVD and VOD — something that was unthought of two years ago.

“Warner’s philosophy is, buy it on Blu-ray and rent it on movies-on-demand, and that’s the message we’ll go out with from now on,” Edelman said.

Warner will also be aggressive in promoting Sex and the City 2’s availability on VOD 30 days before it hits Netflix or Redbox — something the studio has the right to do as part of its contract with those retail outlets. Edelman encouraged cable companies to be equally aggressive in running the spots.

“We’ve had some resistance from people saying that they were afraid to run them. Don’t be afraid, because we’re not afraid,” she said. “You have the window. It is the truth and the reality, so use it.”

While new titles draw the lion’s share of revenue, Freeborn said the studio’s catalog films also provide a major revenue opportunity for operators.

“A lot of people have seen that the Internet platforms have a lot of titles — many of them in HD — and we have to make sure that the cable industry is building that library and making it available to consumers on a dayto- day basis,” she said.

‘PINK RIBBON’ HITS
Warner Bros. has tried to package older titles under themes to make them stand out more to consumers. It recently partnered with breast-cancer awareness charity Susan G. Komen For the Cure to promote 16 studio titles within a “Pink Ribbon” VOD channel.

In the two weeks since the campaign launched, Edelman said, revenue per title was up 600%.

Edelman said cable needs to make movies available via broadband to reach the young 12-to-18-year-olds that will become their future subscribers.