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MGM Eyeing Big VOD, PPV Future

As it continues to plot out its video-on-demand strategy, Metro-Goldwyn-Mayer Inc. will also look to enhance its pay-per-view product by offering additional features to its new releases and creating library-title packages.

MGM Home Entertainment Group president and COO David Bishop, recently tapped to head up the studio's PPV and VOD initiatives, said the studio has yet to reach any long-term deals with distributors. But he sees VOD as eventually becoming a significant part of the studio's overall home-entertainment strategy.

Even though some industry observers beg to differ, Bishop doesn't expect VOD to obliterate other revenue outlets, such as home video or Internet distribution. He also oversees the studio's home video, Internet and interactive division.

"What I think VOD will offer is ease of use for the consumer," Bishop said. "It's another distribution vehicle, but I don't think it will camouflage the existing businesses, but rather grow the pie for the studios."

Bishop said he's encouraged by the industry's recent aggressive consumer VOD rollouts.

"I think the market is moving as quickly as it can," he said. "VOD as a service has been available to the industry and the consumer, but there've been some technological hurdles. "I see a lot of momentum on that front, and we're on the verge of a breakthrough."

In an effort to secure such deals, Bishop said MGM has talked with "a number" of VOD distribution companies about possibly taking an equity position. He did not provide specifics.

He also wouldn't endorse Universal Studios' recent VOD deal with In Demand as the model that studios should follow over the long-term.

"Universal made a business decision they felt was best for them," Bishop said. "We'll look to make our own arrangements with the industry."

Sources said Universal's three-year deal with In Demand will provide cable operators with more favorable VOD windows than traditional PPV, but with only a 40 percent split on each VOD purchase.

The studio is also looking to drive additional revenue from the existing PPV and near-VOD technologies. As it does with DVD releases, MGM may offer additional scenes or director's-cut versions for new PPV titles.

MGM will also look to use its library titles to create "events" by packaging several films around a theme or airing several sequels back to back. Bishop said operators could charge a premium for such events.