Studios approach sliding windows with caution
Warner strongest advocate of simultaneous DVD, VOD release
By Jennifer Netherby -- Video Business, 7/13/2007
JULY 13 | Most Hollywood studios remain cautious about collapsing the video-on-demand and DVD windows, despite Warner Home Video’s recent assertions that a simultaneous window helps DVD sell-through as well as VOD buy rates.
“There are 30 million households that have access to VOD, 10 million households that actually use it, versus 80 million or 90 million households that have DVD,” 20th Century Fox Home Entertainment president Mike Dunn said. “I think caution needs to be observed about moving a window when you’ve got a huge consumer base that doesn’t have access to the product.”
Universal Studios Home Entertainment president Craig Kornblau said that the studio isn’t leaning toward a window change. “We think the window makes sense,” he said.
An informal survey of recent releases on Comcast, Time Warner and Cox cable shows that most movies still debut on VOD 30 to 45 days after DVD release, about the same as during the last few years, with some variances by studio.
Paramount Home Entertainment, Sony Pictures Home Entertainment and Universal, for instance, have stuck closely to a six-week window for their recent releases, including Dreamgirls, Ghost Rider and Children of Men. Walt Disney Studios Home Entertainment, Fox, Warner and Lionsgate more often release films on VOD 30 days after DVD.
Disney wouldn't discuss its VOD plans, but as part of its VOD deal with Microsoft Xbox Live, the studio will debut all of its films day and date with their DVD release. The studio also recently offered Primevil on MovieBeam two weeks after the small-budget horror flick debuted on DVD.
No studio has been as vocal about collapsing windows as Warner, which on July 10, released The Astronaut Farmer on DVD and VOD nationwide as part of a broader windows test.
That followed a multi-studio test with Comcast in Denver and Pittsburgh that showed, according to Warner, that releasing films on VOD during the DVD window boosted both VOD buy rates and sales of DVDs, although it hurt DVD rental. Warner maintains that may be a beneficial trade off because the studio makes more profit on VOD than it does on DVD rentals.
Disney, Fox, Universal, Paramount and Lionsgate also participate in VOD window tests with Comcast and Time Warner cable, but none have released results.
Several studio sources said the test is so far inconclusive. One exec said DVD sales of major releases did worse when the film debuted simultaneously on VOD, whereas niche titles sold better.
Warner president Ron Sanders said he doesn’t expect a dramatic shift in windows this year, but the studio will continue experimenting.
Other studios say they aren’t considering moving the window, noting the size of the business compared to DVD. Roughly 30 million households have access to VOD, according to VB sister publication Broadcasting and Cable. A recent study showed that only half of those households with VOD have used it, and just 30% use it regularly.
Sony is the only studio that didn’t take part in tests with Comcast or Time Warner. Sony worldwide president David Bishop said the studio hasn’t seen any change in the VOD business.
“We certainly won’t be a leader in that market,” he said. “But we’ll continue to watch what’s happening in the market and ultimately seek to follow consumer demand and maximize revenue.”
Some retailers and industry execs have speculated that Warner is pushing the window because of its ownership of Time Warner Cable.
Warner’s Sanders noted, however, that the test with Time Warner was started after the test with Comcast.
“We're pushing VOD to try and grow revenue in a flat video market,” Sanders said. “But we’re going slow and testing it to make sure that it doesn't impact DVD.”
