Theater Owners Pressure Comcast To Abandon $60 Premium VOD Test
Comcast customers in Portland, Ore. and Atlanta may not get the opportunity to spend $59.99 to watch Tower Heist in late November.
Regal Theaters has joined the Cinemark movie chain, threatening not to exhibit the Ben Stiller-Eddie Murphy action comedy if Universal Pictures (now a subsidiary of Comcast) goes ahead with its plan to offer the movie as a premium video-on-demand feature just three weeks after its November 4 theatrical debut.
Universal may withdraw the plan this week, according to a savvy Washington entertainment insider who was privy to the negotiations. The two big chains control about 60% of U.S. theatrical screens.
Moreover, Comcast’s announcement last week of the Thanksgiving weekend VOD screening apparently riled the film’s director Brent Rattner; he had opposed previous plans for VOD offers that cut into the traditional three-month theatrical release window before DVD distribution. Although Universal claimed that Rattner had approved the early Tower Heist VOD release, Rattner now says that the first he heard of the plan was when the studio announced the deal, according to my sources.
Corporate executives didn’t return calls seeking comment over the holiday weekend.
About 500,000 Comcast subscribers in the two cities would be able to buy the VOD movie and watch as frequently as they (and their families and guests) cared to see it during a 48-hour purchase window. The very high price for a movie that has not yet been reviewed was double the $29.99 that DirecTV tested in April for an Adam Sandler movie, Just Go with It. Buy rates for that venture have never been revealed, suggesting that viewers didn’t care to pay that fee for a lackluster film.
When Universal announced the Comcast $59.95 plan last week, it said, “This experiment will allow the two companies to sample consumer appetite for this film in this window at this price while allowing the film to achieve its full potential at the box office.”
Universal has even indicated that it would seek a way to compensate theatres for revenue lost to the VOD delivery, although no details are available about the compensation process. Theater owners are also worried that cable home viewing of a three-week old movie during the Thanksgiving weekend would keep audiences away from theaters to see other movies they are showing at that time.
Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com
SteveH commented:
Sixty bucks? Ben Stiller and Eddie Murphy? For a movie that will already have disappeared from theatres at the three week mark? No disrespect intended, but on *which* planet….? (I’m with Bill, above)
Not Jack Valenti commented:
Theater owners have always fought the next advancement in technology to their business. First it was TV, then the VCR, then Cable TV pay channels. If they would just worry about keeping rude people out of the theaters, and making the customer experience worthwhile, then they wouldn’t need to worry about the competition.
Bill Sheppard commented:
This experiment seems to me completely devoid of value. I’d be surprised if the total number of buyers of a $60 VOD movie exceeds three digits. Perhaps if you bundled the VOD purchase with a Blu-ray Disc of the title (especially if you could get the disc in advance of the general release), or if this was the next installment of a widely-loved franchise (such as Star Wars Episode 8), a non-trivial number of well-heeled consumers might bite, but the way this is structured will only lead to alienation of the theater backers.
Observer commented:
Are the theater owners risking claims of restraint of trade, collusion, etc.??