DirecTV: Would you pay $30 to see a new release in your living room?
On Wednesday, DirecTV airs the first of its 'premium video on demand' films, bringing major Hollywood movies – that debuted only 60 to 70 days before – to a living room near you.
Studio City, Calif. — Blowing the foam off his double-espresso latte, Jeff Tandy says he can’t wait to check out Adam Sandler’s film, “Just Go With It,” which he can watch at home today via DirecTV – just 69 days after the film premiered in theaters.
“I think he’s nuts,” says his buddy, Brad Bone, rolling his eyes. “Thirty bucks is just way too much money when it will be available on DVD in a month anyway. I guess if you have money to burn for lattes, like Mr. Money bags here, you can afford it. But otherwise, what’s the attraction?”
The two comments frame a debate that has been percolating since March when DirecTV – a direct broadcast satellite service based in El Segundo, California – announced plans to launch premium video on demand, a service which will make major studio movies available on TV sets sooner than ever after the theater release of the film. Sony Pictures is first out of the gate today, and will soon be followed by Universal Pictures’ “The Adjustment Bureau,” Fox Searchlight’s comedy, “Cedar Rapids,” and “Hall Pass” from Warner Bros. – all available less than 60 days after their theatrical debuts. Studios will receive from $21 to $24 of the rental price, reports the Los Angeles Times.
Theater owners have expressed fears that the new service will further erode their sinking profits – down by a third in the first quarter of this year – by giving moviegoers another way to skip theaters to stay home. The US’s three largest theater chains – Regal Entertainment, Cinemark Holdings, and AMC Entertainment – have all stated they won’t play trailers for movies offered this way, and may take other self-protective or deterrent strategies.
Studios say the service might appeal to families with kids who have a hard time getting to the theater and who are anxious to save on time, parking, hassle, and refreshment costs. One limiting factor is that only about one-third of DirecTV’s 19.2 million subscribers have the necessary, high-definition digital video recorder necessary for access.
Several analysts say the studios shouldn’t be so worried. “This isn’t a big deal for now: one movie at a time, crazy price, and the need for an HD player. I doubt anyone but a fool will pay $29.99 for a new release,” says Nancy Snow, professor of communications at California State University at Fullerton.
“At that price, I’d expect one of the stars to come to my door,” she says.
She and others wonder if the days of driving to movies for a new release are numbered – but most think that the bigger threat is from Netflix, which has offered flat-rate rental-by-mail since 1997, and more recently video streaming. “I can download tons of films instantly and order relatively current movies for about 10 bucks a month,” says Snow.
Paul Levinson, author of “New New Media,” also thinks the price point is too high to be threatening.
“It makes sense for them to go ahead and try,” says Levinson, adding that it could be more successful if bundled with other products. “But I will be surprised if this catches on, because all the growth in new movie watching has come from applications that are either free or very cheap.”
The social aspect of moviegoing hasn't changed, says Levinson. “Everyone thought that when TV came along, movies were going to die,” he says. “But that hasn’t happened and it’s been several decades. Movies still serve a social purpose that staying home doesn’t.”
Sean Phillips, Yahoo! Movies executive producer, agrees the service does not threaten movies and suggests it will actually expand interest in them altogether. “The more ways people can see movies, the better off everyone is,” he says. “It keeps the level of excitement about movies up, keeps them in the news and gives another way to digest content.”
He points out that people can stay home and watch baseball on TV, but prefer to go the park for the visceral experience of eating a hot dog and being outside with people. Same with movies, he says. “This is not an instance in which each segment of the industry gets a smaller piece of the pie, but one which expands the pie itself,” says Phillips.
Others say the movie industry is in such dire straits that no amount of tinkering with delivery can help. “Studios need to stop worrying about stuff like this and get back to making movies that people want to go to in the first place,” says Chris Lanier, president of Motion Picture Intelligencer.