Study: $30 Too High For Premium VOD

A plan by movie studios Warner Brothers, Universal, Sony Pictures and 20th Century Fox to release certain movies to pay-per-view 60 days after their theatrical release will have a big hurdle to clear, according to research house The Diffusion Group - price.
The four studios are expected to announce the service - dubbed Home Premiere - later this month. The notion of accelerated windows has been mulled about by several studios for months. Normal theatrical-to-VOD windows are around 90 days.
Time Warner Inc. chairman and CEO Jeff Bewkes has been a big proponent of accelerated windows and said in Frebraury that its offering would be released in the second quarter. Last week, Hollywood trade magazine Variety broke the news that the studios would unveil the service ths month, starting with select films proced at $30 each. DirecTV is expected to be the first distributor to launch the service, with others to follow.
But according to research house The Diffusion Group that price is way too high.
According to its latest report Premium Video on Demand Rental Windows - The Consumer Speaks, the $30 price point is six times the $5 average price for a VOD movie in the current 90-day window. In a survey, only 8% of respondents said they were willing to pay $25 for a VOD movie the same day it was released in theaters. That number jumped to 21% when the price was lowered to $10 for a same day release.
In its report, TDG noted that if so few consumers were willing to pay $25 for a VOD movie the same day it was released in theaters, the numbers willing to pay $30 for a 60-day window could be minuscule.
"The tactical terrain between theatrical debut and the 90-day rental horizon is vast," said Michael Greeson, TDG founding partner and author of the report, in a statement. "So the industry has a variety of timing and pricing options available. And, yes, the 60-day model may have a future, but not at these price points."