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WB Unspools VOD Premieres

2/08/2008 7:00 PM Eastern

In a rare move for a Hollywood studio, Warner Bros. is debuting nationally on VOD three Hollywood movie titles — including the 2008 Academy Award-nominated Michael Clayton — in February on the same date the movies hit video store shelves.

The move, spurred by positive buy results from “day-and-date” tests in local Comcast and Time Warner Cable markets, is part of an aggressive push by Warner Bros. to maximize VOD revenue while maintaining strong DVD sales, according to Warner Bros. senior vice president of video on demand Andy Mellett.

Eschewing traditional 30- to 45-day VOD windows, Warner Bros. last week debuted the Jodie Foster revenge thriller The Brave One ($36.8 million in domestic box office) on the same day as the movie’s home-video release, and will do the same with the Catherine Zeta-Jones family drama No Reservations ($43 million) on Feb. 12 and the George Clooney-starrer Michael Clayton ($38.4 million to date) on Feb. 19. Of the three, Clayton has the highest profile: It was nominated for seven Oscars, including best picture and best actor for Clooney’s performance as a lawyer trying to clear his scrupulous client’s name.

In addition, Warner Bros.’ sister studio, New Line Cinema, is debuting two additional titles simultaneously on VOD and home video: The Martian Child ($7.4 million) and Rendition ($9.7 million).

Most studios, fearing a potential drop in their $24.2 billion home-video business, have been reluctant to offer titles to VOD suppliers at the same time they reach home video retailers Blockbuster and Netflix.

But Mellet said results from limited Comcast and Time Warner Cable day-and-date tests launched last year has convinced the studio that offering certain titles on VOD day and date with home video can boost the business for both titles.

While he would not disclose specific buy or revenue figures, Mellet said Warner Bros. titles such as Superman Returns and The Departed that were part of the Comcast day-and-date tests in Pittsburgh and Denver performed more than 40% above expectations. In addition, Mellet said such day-and-date titles did not harm home video sales and rentals.

“We thought we had enough data points that supported the day-and-date-with-home-video-release strategy as being a good proposition with consumers and helping across the board in terms of visibility for the title,” Mellet said. “We’re also actually seeing an increase of sell-through activity in the markets [where] the title was released day and date for the test.”

While adult-targeted titles like Michael Clayton work well as day-and-date candidates, Mellett said kids-targeted titles like the Harry Potter series or blockbusters like Ocean’s 13, which tend to drive DVD sales, may not see an early VOD window.

“We did not release Harry Potter and The Order of the Phoenix [this past January] day-and-date because that’s such a crucial sell-through title — parents want to buy that for their kids so they can watch it over and over again,” he said. “But it was released to VOD 30 days after home video.”

Mellett says by 2008 potentially a quarter to half of all Warner Bros. movie releases could premiere on VOD and in home video stores at the same time.

“Assuming things go as they have been going, that’s definitely realistic,” he said.

September