On Demand and on DVD at the Same Time
In an attempt to bolster consumer interest in paid video on demand, Comcast, the nation’s largest cable operator, has introduced an experimental program to release films on demand simultaneously with their release on DVDs.
The experiment, which will run on Comcast systems in Pittsburgh and Denver, would let customers pay $4 to see a movie the same day they could buy it at a neighborhood store for about $25, or rent it for about the same price as the on-demand service.
As new methods of movie distribution proliferate, the companies that create programming continue to experiment. Now that video on demand is in 30 million homes, and the sales of DVDs have slowed, it is hardly surprising that cable companies are seeking to take advantage of their clout and that the movie studios are willing to tweak the timing of releases.
The experimental simultaneous release of DVDs and on-demand service closes a normal 30- to 45-day gap between DVD release and on-demand release. “This is a sampling mechanism for the title,” said Andrew Mellett, vice president for the video-on-demand division of Warner Digital Distribution, which is offering “Superman Returns” and other movies via Comcast. “I don’t expect it to cannibalize sales on DVD. What we are really interested in seeing is whether this increases the buy rates.”
Comcast has declined to comment on the project, although it has been advertising films’ availability in local newspapers.
The company has been the industry leader in offering free and paid video on demand, compiling a library of 8,000 movies and television episodes to lure subscribers and to distinguish itself from satellite TV.
On-demand service has been a success compared to pay-per-view, industry experts say. On-demand service lets consumers see movies when they want, while pay-per-view lets them see movies on a predetermined schedule. That lack of flexibility has hurt the pay-per-view business as video on demand has grown.
“Comcast has done really well with video on demand,” Mr. Mellett said. He added that once customers get used to free programming on demand, they will pay for the shows they really want to see.
Blockbuster, which could be hurt by the success of simultaneous release, said that the sales and rentals of DVDs represent the largest revenue stream for the studios and “we believe that they will be very cautious in introducing any new less profitable service that could be cannibalistic to the rental and retail channel.”
The experiment is a result of pressure by the cable industry to test paid video on demand so that it could get a slice of the revenues immediately after theater release.