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DirecTV to launch premium video on demand Thursday with 'Just Go With It'

April 19, 2011 | 12:35 pm

JustGoWithIt After much feuding among studios and theaters over early delivery of movies to the home, DirecTV is ready to "Just Go With It." The  El Segundo-based satellite television provider will launch so-called premium video on demand Thursday with the Adam Sandler comedy, just 69 days after the film premiered in theaters.

Consumers will have to pay $29.99 to rent the Sony Pictures movie for 48 hours. That's the first time a major studio movie has been available on television sets that soon after playing in theaters and at that high a price.

It will be followed soon by three other movies: Warner Bros.' comedy "Hall Pass," Universal Pictures' thriller "The Adjustment Bureau" and Fox Searchlight's quirky comedy "Cedar Rapids." Exact dates for those films have not yet been set, but they will be available a minimum of 60 days after their theatrical debut. Each movie will be offered for two weeks before disappearing and then, a few weeks later, reappearing at the standard video-on-demand price of about $5.

Studios will receive from $21 to $24 of the $30 rental price, according to a person familiar with the arrangement.

The initial four films are among the first wave of premium VOD titles expected to come from other cable and Internet companies as well. DirecTV's agreement with the four studios calls for them to provide additional films in the future. Among the remaining Hollywood studios, Paramount Pictures is not participating in premium VOD for the time being, and Walt Disney Studios is weighing its options.

Since the Los Angeles Times reported in March about DirecTV's plans to launch premium VOD this spring, theater owners have complained publicly that the initiative could undermine their business by encouraging consumers to skip theaters in favor of waiting to watch films at home. Regal Entertainment, AMC Entertainment and Cinemark Holdings, the nation's three largest theater chains, have all said they won't play trailers for movies that are offered on premium VOD and may take other retaliatory economic measures.

Studios, however, believe the service could appeal to people with young children who have a difficult time getting to theaters. With DVD revenue down about 40% from the market peak and box-office revenue and attendance off 20% this year, many in Hollywood are eager to experiment with new business models.

Derek Chang, who is overseeing the program that DirecTV calls "Home Premiere," said he thought it would generate new revenue before the DVD release, when movies are often not legally available. "This gives the movie new life in between existing windows," he said. "It's hard to say we're going to be taking revenue from movies that aren't even playing in theaters."

Only about 6 million of DirecTV's 19.2 million subscribers have the high-definition digital video recorder necessary to access premium video on demand. But the big question for the satellite TV company and studios is how many people will be willing to pay $30 for a movie that already has played in theaters and will be available to rent on DVD for a few dollars in as soon as a month.

One person close to the situation said expectations among DirecTV and the studios for the premium VOD launch are muted and the number of people who rent each film would likely total in the tens of thousands, at least initially.

"We'll see whether or not it works, but it's definitely worth a try," Chang said. "I'm not sure that the industry in its current state is a model that perpetuates well, so we have to keep looking for new ways to innovate."

-- Ben Fritz

RELATED:

DirecTV poised to launch premium video on demand as theater executives voice outrage

Photo: Brooklyn Decker and Adam Sandler in "Just Go With It." Credit: Tracey Bennett / Sony Pictures

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