In a conference call discussing Time Warner’s earning for the third quarter of 2010, CEO Jeff Bewkes indicated that the company is “near agreement” with movie distributors to launch a premium video-on-demand service to its customers. What would make this service special? It would offer customers access to movies that are still in theaters, potentially enabling home viewing within days of a film’s theatrical release. The catch? Although Bewkes did not discuss price points, industry reports indicate access to these “premium” films might run anywhere from $30 to $50 each.
Hollywood studios have been pondering ways to increase revenue from video-on-demand services to make up for revenue declines that the industry is largely attributing to piracy and the proliferation of inexpensive online content through outlets like Netflix. Providing access to movies that have just been released in theaters—at a premium price—might be a way for studios to reach into the pockets of its biggest fans—the ones who are already shelling out lots of money for home theater gear and (of course) Blu-ray movie titles.
Studios’ rationale is that the cost of premium video-on-demand films for home viewing will appeal to home movie watchers looking for family entertainment: although the cost might be prohibitive for a movie fan who wants to watch an art-house picture in the middle of the night, a family of four enjoying some rated-G or rated-PG fare in the comfort of their own living room might be getting off cheap. Movie theater tickets are now routinely $10 apiece: after parking and oh-so-expensive theater snacks, a high-prices video-on-demand version of a movie still in theaters might have a strong appeal.
Bewkes offered no concrete details when a service might launch, implying only that Time Warner might be able to launch the service by summer 2011.