Closing the On-Demand Gap

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In a rare departure from traditional pay-per-view movie windows, TVN Entertainment is working with upstart Hispanic-targeted entertainment company Maya Entertainment to premiere a film on video-on-demand concurrent with its theatrical release.

Sleep Dealer will simultaneously debut April 17 on 30 screens in Los Angeles and New York, as well as on VOD via TVN-affiliated systems representing 10 million homes, according to Maya Entertainment co-chairman Jeff Valdez. The science-fiction thriller, directed by Alex Rivera, won the 2008 Sundance Festival feature film and screenwriting awards.

Traditionally, the window between a theatrical opening and an on-demand premiere is three to six months, with most movies getting an additional 30 or more days of exposure on home-video shelves before debuting on cable VOD platforms. Most movie studios have been reluctant to simultaneously debut titles in theatres and living rooms for fear that the practice would hurt the box-office business.

Companies including Rainbow Media-owned IFC and HDNet have debuted select and mostly independent or art-house films on demand, either at the same time or close to their cinema debuts.

But Valdez, who also oversees Hispanic-targeted cable network Sí TV, said Sleep Dealer will benefit from both a financial and awareness standpoint from a simultaneous theatrical and on demand debut.

“We're feeling pretty ahead of the curve with the fact that we have an overall day-and-date with TVN,” Valdez said. “I think people like having choices and if you don't give them the choices, they'll make them for you.”

TVN president and chief operating officer Doug Sylvester said that as more movie studios and distributors look to maximize revenue for their content, the windows separating a movie's theatrical, DVD and on-demand release will shrink or be eliminated altogether.

“The cost of marketing movies is so high, and the competition for consumer attention is so great, that releasing movies quickly across multiple platforms allows studio marketers to capitalize on and exploit the consumer awareness they've created,” Sylvester said. “Also, offering convenient and legal versions of movies across various platforms and formats is a very powerful tool against piracy.”

Valdez said he's not concerned about cannibalizing theatrical audiences by premiering Sleep Dealer on PPV, adding that the VOD exposure may actually boost promotion for the film.

“That's the big fear of everybody, but people had the same fear that videocassettes would kill theatrical attendance, and that didn't happen — in fact, quite the opposite happened,” he said. “I think we have nothing but upside in pursing this strategy.”

Sylvester said he wouldn't be surprised if other studios followed Maya's lead but would not reveal specifics.

“Every studio is building in the flexibility to offer titles in VOD at the same time as the DVD release and, in some cases, earlier than the DVD release,” he said. “As VOD grows over the next few years from 46 million households to 65 to 70 million, and as consumers use VOD for more and more of their TV viewing, the importance of VOD revenue to studios will only grow.”