In Demand, Artisan Set VOD-Rights Deal

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In Demand, which has struggled to secure critical video-on-demand distribution deals with the major Hollywood studios, has reached an output agreement with independent producer Artisan Entertainment.

Although most industry observers don't consider Artisan to be one of the front-line Hollywood studios, the deal does get pay-per-view distributor In Demand — whose business plan depends on being cable operators' primary conduit for VOD product — into the high-stakes game of VOD film acquisitions.

Representatives from both In Demand and Artisan confirmed the deal, which would give In Demand VOD rights to approximately 10 of Artisan's upcoming theatrical films over the next three years.

That group includes Made
(with Jon Favreau and Vince Vaughn) and Novocaine
(with Steve Martin). The titles will be serviced by In Demand analog and digital technology.

The pact also allows In Demand to select titles from Artisan's movie library. The independently owned studio's biggest hit to date was the 1999 blockbuster The Blair Witch Project, but it has also distributed several other modest box-office successes, including Stir of Echoes
and Dr. T and The Women.

The VOD deal does not include Artisan-acquired titles such as Terminator 2: Judgment Day, Total Recall, Basic Instinct, Dirty Dancing
and It's a Wonderful Life.
The deal would give In Demand its first multiyear VOD output agreement with any film studio. Owned and operated by AT&T Broadband, Time Warner Cable, Cox Communications Inc. and Comcast Corp., the service has obtained VOD rights to distribute programming from basic networks such as Comedy Central, Court TV and Turner Broadcasting System Inc.

But it has failed to secure rights to top Hollywood movie product, which most observers believe will be the main revenue driver for the new technology.

Meanwhile, In Demand competitors Intertainer Inc. and Diva Systems Corp. have been able to strike VOD deals with Warner Bros., New Line Cinema and Universal Studios. Paramount Pictures, Buena Vista Television and Sony Pictures have refused to offer any of their recent releases for VOD distribution.

Several studio executives have questioned whether In Demand's role as a middleman will be as important in the VOD environment as it has been in the more schedule-heavy analog PPV business.

Hollywood has also been at odds with In Demand over VOD revenue splits. Studios want to keep as much as 60 to 90 percent of revenue per VOD buy, while In Demand wants to cut a small slice of the revenue pie for itself.

While In Demand and the studios negotiate, operators like Charter and Insight Communications Co. have launched VOD services, aligning with Diva for studio product. Other operators, like Time Warner Cable, have negotiated deals with studios on a title-by-title basis.

But Time Warner vice president of corporate communications Mike Luftman said the MSO would continue to support In Demand as the industry's VOD-product distributor.

"We've done some individual deals [with studios] but nothing's changed with our relationship with In Demand," he said. "We're still working with and supportive of In Demand."

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