Thursday, March 3, 2011

DirecTV's New Bet on Video On Demand

Worlds are colliding! Worlds are colliding! According to the Los Angeles Times, DirecTV is in talks to start offering early video-on-demand, bringing first run movies to television screens as little as sixty days after their release in theaters, and a month before they hit DVD. The cost of the service is steep - the tentative estimate is $30 per title - but it's a clear sign that content exhibition windows are shrinking again and the fight between content providers and distributors is heating up. Theater owners, of course, are screaming bloody murder because the plan threatens to cut into their profits by shortening the length of time a film stays in theaters. Also, shorter theatrical exhibition tends to negatively impact smaller films that take time to build their audiences, and pretty much any film that isn't front-loaded at the box-office.

I've never used video on demand, so I'm not the best person to evaluate the financial feasibility of this new DirecTV venture. I'm still trying to work out how this is any different than films on pay-per view services, which traditionally come a few months after a film's DVD release. Personally, it sounds like a pretty unlikely bet. $30 doesn't seem like a hefty fee when you consider that it's equal to the cost of about two or three movie tickets, but wait another month, and you can pick up a rental disc from Blockbuster for $6. Wait another month, and it's down to $1 a night from the local Redbox kiosk. The convenience of ordering a movie from home probably counts for something, but unless you're in an area that doesn't have video stores in close proximity or isn't in the service area of Netflix or other rental services, I don't understand the appeal. I can understand spending $30 to go out and see a film in a theater, and prices for souped-up IMAX screens and 3D surcharges are already pushing ticket costs close to the $20 mark in some areas, but not for a home viewing experience.

The only time I could see myself using the service is with limited releases, simply because they take so much longer to reach DVD than widely distributed films, and their release patterns can be erratic. I found out too late that a local art house theater was playing "The Illusionist" for a week, and now I'll have to wait several months to see it by rental. I'd happily pay $30 now if I didn't have to wait until August or September for the DVD release, but this is really an access issue. If there were a theater nearby still playing the film, then I would never conisder it. Of course, I'm sure there are people out there who hate going to movie theaters or simply can't go to movie theaters, who would love to have this kind of service. But are there that many impatient moviegoers with major access issues out there to make this into a viable revenue stream? I get the sense that DirecTV expects that a first-run movie can be treated and priced like a special event, and I think that can work for some titles, but not many. $30 to hold a big home viewing party of the new PIXAR film while it's still in theaters? Sure. "Big Mommas: Like Father Like Son"? Eeep.

It's also worth mentioning that movie theaters are increasingly looking to alternate content like National CineMedia's Fathom events, which distribute live opera and theater performances, concerts, sports matches, business meetings, and even church services. I tried and failed miserably to find tickets to the special screenings of the National Theater "Frankenstein" performances happening in a few weeks, being distributed through BY Experience. These event-based screenings have higher ticket costs, and feature the kind of content that seems more suited to higher price premium video-on-demand than regular old feature films, which takes us right back into comparisons to traditional pay-per-view television. Just as television is encroaching on the domain of movie theaters, theaters are starting to encroach on the domain of television. I've already seen a few special event screenings built around television content, including the series finale of "Lost" last year, featuring a Q&A with the series creators. I wouldn't be surprised, in a couple of years, if they start beaming new episodes of premium cable television series right into movie theaters.

I guess it's all going to come down to the audience's venue preferences eventually. I, for one, prefer seeing movies in theaters, but DirecTV is betting there are a lot of people out there who don't.


  1. I read that article this morning and I was left a little baffled as well as to who DirecTV is targeting for this feature. The window between the early VOD of a movie and its DVD release only a month later just seems too short to justify the $30 for home viewing. And it is a rental, right? I can bare to wait.

  2. It is rental, probably for a limited number of days. I read a few articles where they were suggesting housebound people or people stuck in remote places who couldn't go to theaters as potential customers. Honestly, I think they're grasping at straws. On the other hand, the pricing for this service will probably go down, which means all this will just end up moving pay-per-view dates up by several months to cut into theatrical releases. Probably rental too.

  3. Yeah, this doesn’t make much sense to me. 30 bucks to see a movie? I know you mentioned the cost of going to a theater, but a person by themselves or with a friend can go to a matinee sometimes for as cheap as 12 bucks, plus you get to see the movie in the theater. I just think as a DISH customer/employee that if there was a movie I was THAT excited about 1)I would have seen it in the theater or 2)I’d probably just wait a month and buy it on DVD for 15 bucks, or rent it for 5 bucks, or just get it from Netflix. Not sure who would actually do this…