Home Video Smiling Over Universal Jackal Snafu

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Pay-per-view executives have estimated that Universal
Studios' debacle involving The Jackal may have cost the industry upward of $1
million. The studio's last-minute decision to move back the premiere of the movie by
two weeks forced operators to spend money to change barker-channel messages, to alter
ordering and billing procedures and to train CSRs on how to handle calls from confused
subscribers -- not to mention costing them potential revenue from the action title, which
pulled in $55 million at the box office.

But as much as operators were fuming at the studio for
making a critical scheduling mistake, they probably should look in the mirror and shoulder
some of the blame for their losses in this situation. If the PPV-movie business was
generating revenues anywhere close to those of the home-video industry, it might have been
able to maintain The Jackal's initial premiere date, despite Universal's
error.

When the scheduling mistake was realized, it's not
unrealistic to assume that the home-video retailers were upset at possibly losing shelf
time for the movie before it moved on to PPV. While Universal executives refused to talk
about the situation, industry sources said the home-video industry, which has been looking
for any excuse to advance its unrealistic fear of shorter PPV windows, threw its $8
billion movie-rental-revenue weight around and influenced Universal to extend the PPV
window, rather than shortening it and risking the loss of significant rental revenue.

Universal, knowing that moving the film's PPV-debut
date back two weeks with such short notice would cause havoc among operators, nevertheless
was forced to choose between hurting the wounded, but still substantial, video-rental
business, or the meek PPV-movie business. It doesn't take an economics professor to
know which way the studio was forced to turn.

But had the $600 million PPV-movie business even come close
to matching the revenue take of home video, maybe Universal would have had some muscle to
repel the home-video industry. Instead, home video seemingly won the battle.

Fortunately, more and more operators are rolling out
digital boxes and offering near-video-on-demand movies, and early revenue results are
encouraging. The Universal situation was a very rare occurrence. But if PPV should ever
find itself in a similar situation in the near future, hopefully, the industry will have
enough economic muscle to make the other side suffer.

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