Ops Concerned Over Movie-Windows Increase

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After seemingly thwarting last year's attempt by the
home-video industry to significantly increase pay-per-view windows, operators are bracing
for a slight increase in windows over the next three months.

Beginning in February, the window for the top PPV-movie
releases is slated to average 52 days in home-video stores before reaching addressable
homes. For PPV distributors, that's a significant increase over the 48 days that the
industry averaged last year, according to Request Television. The expanded windows also
affect direct-broadcast satellite services.

While sell-through, or price-discounted video titles, make
up the lion's share of titles with windows of 50 days or more, a number of rental
titles are expected to carry longer windows, including Buena Vista's April releases
of Good Burger (60 days) and GI Jane (55 days), as well as Paramount's
March Event Horizon (50 days), according to sources close to the situation.

Unlike past, well-publicized PPV-window-expansion efforts,
the studios are making their most recent moves much more quietly. Many operators contacted
weren't even aware of the upcoming increase.

But those that were are hoping that the upcoming increase
is only an aberration.

'I hope it's only a bump for now, but certainly,
we're concerned about windows if it develops into a trend,' said Gregg Graff,
senior vice president of marketing, programming and advertising for Coaxial
Communications.

While most studio executives were attending the NATPE
(National Association of Television Program Executives) convention last week and could not
be reached for comment, one official said PPV windows are still determined on a
movie-by-movie basis. He did say, however, that he's receiving some heavy pressure
from the home-video business to increase windows.

'It's getting harder and harder to maintain
traditional PPV windows based on performance,' said the executive.

The studios have long complained that PPV-movie performance
has been too poor to stop the relentless pressure from the home-video industry to increase
windows. The Video Software Dealers Association, blaming PPV windows for the 5 percent to
10 percent decline in home-video rentals, mandated a universal 60-day window for all
movies, and some video retailers have lobbied for 90-day windows.

The studios are hoping that the advent of digital
compression, which will provide near-video-on-demand services in a multichannel PPV
environment, will increase PPV-movie revenues. But operators have thus far been slow to
install digital boxes, while analog movie buy-rates continue to perform well below
alternative distribution outlets, such as DBS service DirecTv Inc.

But one PPV executive did find a silver lining for the
industry; while windows for rental titles may be rising, windows for sell-through titles
are actually dropping.

At one point averaging 90 days to 120 days, sell-through
titles such as 20th Century Fox's Soul Food and Columbia Pictures' My
Best Friend's Wedding
are slated for 60-day and 54-day windows, respectively.

'The studios are trading off on some of the bigger
titles,' said the executive. 'They're increasing the windows on titles that
typically don't perform well on PPV for shorter windows on titles that are big PPV
draws.'

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