VOD

Studios to Cable: Push VOD

10/25/2010 12:01 AM Eastern

New Orleans — Studio executives
are bullish about the future
of the video-on-demand business
and are continuing to market and
promote both current theatrical releases
and library titles in an effort to drive
revenue for the category.

“We are in the midst of an unbelievable
sea change — everybody wishes they had
the pipe into the home, and cable has it,” Michele
Edelman, vice president of marketing
for Warner Bros., said at last week’s Cable &
Telecommunications Association for Marketing
Summit here.

Over a few short years, the cable industry
has transformed the home-video business to
the point where VOD now serves as the first
home rental window for many movies after
their theatrical release.

‘FLIPPED THE WINDOW’

Much of that change is due to recent studios
deals with DVD-by-mail company
Netflix and retail DVD kiosk company Redbox
to delay release of new titles 28 days
after they’re available on-demand and for
sale at retail.

“We’ve now flipped the window — it used
to be rental and retail had a 30-day runway,
now we have three or four studios that have
a 28-day window before Netflix and Redbox,”
Edelman said.

Providing the most day-and-date theatrical
releases in its history, Twentieth Century
Fox has seen VOD revenue grow four-fold in
the past few years on a relatively small number
of titles, according to Aubrey Freeborn,
senior vice president of marketing and product
management for the studio.

“We’re committed to the category
and we feel that now is the time
for everyone on the studio and operator
side to take advantage of all
the momentum that we have,” Freeborn
said.

One way the studios are looking to seize
that momentum is through increased promotion
of the short VOD windows. Warner’s
upcoming multimillion-dollar campaign
for Sex and the City 2 prominently mentions
both the movie’s availability on DVD and
VOD — something that was unthought of
two years ago.

“Warner’s philosophy is, buy it on Blu-ray
and rent it on movies-on-demand, and that’s
the message we’ll go out with from now on,”
Edelman said.

Warner will also be aggressive in promoting
Sex and the City 2’s availability on VOD
30 days before it hits Netflix or Redbox —
something the studio has the right to do as
part of its contract with those retail outlets.
Edelman encouraged cable companies to be
equally aggressive in running the spots.

“We’ve had some resistance from people
saying that they were afraid to run them.
Don’t be afraid, because we’re not afraid,”
she said. “You have the window. It is the
truth and the reality, so use it.”

While new titles draw the lion’s share of
revenue, Freeborn said the studio’s catalog
films also provide a major revenue opportunity
for operators.

“A lot of people have seen that the Internet
platforms have a lot of titles — many of them
in HD — and we have to make sure that the
cable industry is building that library and
making it available to consumers on a dayto-
day basis,” she said.

‘PINK RIBBON’ HITS

Warner Bros. has tried to package older titles
under themes to make them stand out more
to consumers. It recently partnered with
breast-cancer awareness charity Susan G.
Komen For the Cure to promote 16 studio
titles within a “Pink Ribbon” VOD channel.

In the two weeks since the campaign
launched, Edelman said, revenue per title
was up 600%.

Edelman said cable needs to make movies
available via broadband to reach the young
12-to-18-year-olds that will become their future
subscribers.

September