Thursday, October 06, 2011

A $60 Video-on-Demand Movie? It's Comcastic!

Fierce Cable reports that Comcast, and its Universal Studios subsidiary, will test releasing a movie to Video-on-Demand (VOD) just three weeks after it opens in theaters. The movie is "Tower Heist", starring Ben Stiller and Eddie Murphy, which opens November 4th, and Comcast will run the test in Atlanta and Portland, OR. And the price? $59.95, for which you get to watch the movie once.

(Update--October 13, 2011: Home Media Magazine reports that Universal and Comcast have cancelled their plans to release "Tower Heist" on VOD after two theater chains, Cinemark and National Amusements, said that they wouldn't show the movie if the companies went through with their plans.)

DirecTV already has a program in place with multiple movie studios to show VOD movies 60 days after they open in theaters for $29.95. Comcast's argument is that large families can save money by watching the movie at home instead of buying movie tickets, food and drink. My counterargument is that a family that's looking to save money will wait a few more weeks and get the movie from Redbox for $1, and a family that has to see the movie as soon as it comes out vs. paying $60 to see it at home will go to the theater.

The movie studios are getting more and more desperate to replace the income they're losing from the decline in DVD revenues, and Comcast is trying to fight off Netflix and Amazon by offering movies and television shows sooner than the over-the-top video providers can. However, the value proposition for a $60 VOD movie that's already been in theaters for three weeks is extremely hard to make.
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