So according to the WSJ, majors Disney and Sony are both running tests to see the take up of VOD films for big new movies.
These trials involve Disney’s Wreck-It Ralph and Brave and Sony’s Django Unchained and see the movies available to South Koreans just a few weeks after theatrical releases. It makes sense for the studios as they get to collect a bigger slice of the profits though understandably cinema owners are not happy.
“A short window or simultaneous release muddies the value proposition being offered to consumers,” Patrick Corcoran, National Association of Theatre Owners trade group.
In the US, some smaller distributors offer short theatrical runs with simultaneous VOD, but generally cinema owners have managed to shut out VOD for major movies long enough to ensure they get a good run in their theatres.
In 2011, Universal’s Tower Heist was planned to be available via VOD a few weeks after its theatrical release but this was shut down by NATO.
But clearly that hasn’t dissuaded the studios…
“I know that if we don’t experiment we’ll have a business problem that will affect all of us. We have to find a way to claw back some of that revenue.” Universal Chairman Adam Fogelson at CinemaCon
South Korea is a technologically advanced society so trialing “Super Premium VOD” there seems to make sense. Apparently the Korean DVD market is all but dead so VOD could be a winner. South Korea however has been steadily contributing to worldwide box office over the past few years so Hollywood studios have to be careful they don’t kill this growing market before it hits maturity – especially with an option that might not even take off.
Some still think both distribution models can co-exist by side:
“Movie-going is a cultural experience, VOD is like watching TV,” he said. “I expect their markets will remain separate.” Kim Young-gi, Korean Film Council
And this could just be the beginning. By 2015, Ernst & Young predict that the majority of media and entertainment revenue will be digital. According to their survey, revenue from digital delivery of content and services will jump from 47% to over 57%.
Consumers are way more tech-savvy these days and platforms like iTunes have made the idea of digital delivery familiar and safe. As this extends to other media like movies and video games, consumers will start to abandon physical products for digital – be it digital download or streaming.
This means media companies have be proactive about adopting new technology – you don’t want to take it easy only to see your rivals leaving you behind in the dust.
“These technologies can help M&E digital leaders who broke ahead of the pack in the early stages of digital to extend their advantages, as well as offer opportunities for those who fell behind to adapt quickly and catch up,” Pat Hyek, Ernst & Young Global Tech Industry Leader.
So while Disney & Sony’s VOD experiment might not replace the current cinema model just yet – films like Avengers 2 might be coming to your TV sooner than you think!
So what do you think? Let me know below!
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