Entertainment Industry

Category: video-on-demand

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

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

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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

Theater chains escalating fight with studios as premium video-on-demand looms

With the launch of a new premium video-on-demand initiative that will get movies from the theater to the TV screen a lot quicker around the corner, the nation's largest theater chains are waging a public war with the Hollywood studios involved.

Representatives from Regal Entertainment and AMC Entertainment have been meeting with movie studios this week to inform them that they will not play or promote any movies that will be part of "premium VOD," through which the movies would be available to rent in homes for $30 eight weeks after they launch. The exhibitors think some people wouldn't go to theaters to see movies that are available to rent so soon and that theaters would end up a marketing vehicle for a business in which they don't participate.

Regal, the nation's No. 1 chain, has taken it a step further. It is reducing the number of trailers it plays from the four studios that are poised to launch premium VOD soon -- 20th Century Fox, Sony Pictures, Universal Pictures and Warner Bros. A person familiar with the matter said that's because Regal has not been informed which movies will go premium VOD.

Regal and AMC want studios to tell them ahead of time which movies will be released on premium VOD so they know which to play and promote and which to ban, according to people close to the situation. The chief executive of Cinemark USA, the third-largest exhibitor, recently expressed a similar sentiment in an interview with the Hollywood Reporter.

Combined, those three companies represent about 16,000 of the nation's roughly 40,000 movie screens.

By cutting back on trailers and banning certain movies, the exhibitors could cost themselves ticket sales in the short run. That's an indication of how big a threat they believe premium VOD is to their businesses and how high-stakes a game they are willing to play.

"It is simply not in Regal's best interest to utilize our resources to provide a marketing platform for the release of premium video-on-demand movies," Amy Miles, chief executive of Regal, said in a statement this week.

Similarly, AMC said in a statement, "As [release] windows shrink and threaten our industry's future, it is only logical to expect AMC to adapt its economic model."

This is far from the first time that theater owners have expressed their fierce opposition to such plans. When the Los Angeles Times reported in March that DirecTV was poised to become the first provided of premium VOD and that its chief executive had floated a time frame of four to six weeks after theatrical launch, Miles and AMC chief Gerry Lopez said they wouldn't play movies under such circumstances.

Tensions have only heightened since then, as news has leaked of specific movies that may launch on premium VOD as soon as late April, such as Sony's Adam Sandler comedy "Just Go With It."

Distribution executives at several studios declined to comment on the matter, citing the sensitivity of ongoing talks.

RELATED:

Hollywood firming up launch plans for premium video on demand

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

-- Ben Fritz

Hollywood firming up launch plans for premium video-on-demand

Hollywood's plan to start offering $30 video-on-demand rentals of movies about eight weeks after they hit theaters is expected to start around late April through satellite television provider DirecTV.

Though a precise launch date and plans have yet to be finalized, Sony Pictures' Adam Sandler comedy "Just Go With It" will likely be among the first movies offered, according to people familiar with the matter. Others under consideration are 20th Century Fox's low-budget comedy "Cedar Rapids" and one of two pictures recently released by Universal Pictures: the Matt Damon thriller "The Adjustment Bureau" or the alien comedy "Paul." Warner Bros. is also expected to be one of the suppliers in the first wave of so-called "premium VOD" movies from DirecTV. Likely candidates from the studio include the comedy "Hall Pass" and the drama "Red Riding Hood."

As previously reported by The Times, DirecTV has emerged in the last few months as the company that will first launch premium VOD. Sony, Fox and Warner Bros. were always expected to take part, but Universal has changed its position after initially keeping its distance, said a person with knowledge of the matter.

Other cable television and Internet providers are expected to follow DirecTV's lead in offering movie rentals for $30 about two months after they hit theaters. People at studios familiar with the situation said they would offer only certain movies via premium video-on-demand. They would typically be pictures that have already disappeared from theaters and appeal largely to adults who rarely rush out to see movies in the first few weeks and would be willing to pay a higher price to watch in the comfort of their own homes.

Theater operators have been publicly blasting the plan, arguing that it would discourage consumers from buying movie tickets if they know they could watch the picture in their living rooms within a short period of time. A report about the plan in Variety on Thursday generated outrage in Las Vegas at CinemaCon, where theater owners and studio executives are gathering this week for the exhibition industry's annual convention.

"Theater operators were not consulted or informed of the substance, details or timing of this announcement," the National Assn. of Theatre Owners said in a statement. "It's particularly disappointing to confront this issue today, while we are celebrating our industry partnerships at our annual convention -- CinemaCon -- in Las Vegas."

A spokesman for DirecTV declined to comment.

-- Ben Fritz

DirecTV poised to launch premium video-on-demand as theater executives voice outrage [Updated]

DirecTV is in advanced talks to be Hollywood's first partner for early video-on-demand, a plan that is putting it in the cross hairs of the nation's top theater chains.

People familiar with the matter said the satellite TV company would likely be the first distributor to launch so-called premium VOD, through which consumers would pay about $30 to rent a movie via the Internet or cable 60 days after it opened in theaters and at least a month before it would become available on DVD.

The plan represents a significant step in Hollywood's strategy to make movies available in the home earlier and in new ways to generate fresh revenue as DVD sales continue to fall and domestic box office has been stagnant. It has previously taken a minimum of three months for films to shift from theaters into the living room.

DirecTV is looking to introduce its product by the end of June with movies from 20th Century Fox, Sony Pictures and Warner Bros. Walt Disney Pictures is also in talks to join the initiative, the people said, while Paramount Pictures and Universal Pictures are not expected to participate initially.

In a conference call with Wall Street analysts Feb. 23, DirecTV Chief Executive Michael White said his company was talking to studios about launching a "trial" by the middle of the year in which "perhaps we'll try something that's four to six weeks from theatrical release."

A spokesman for DirecTV, the nation's second-largest pay television provider with 19.2 million subscribers, declined to discuss the VOD plans. White’s statement set off alarm bells in the exhibition community, however, where top executive believe such a shortening of the wait to see a movie at home would discourage consumers from going to theaters.

"If a film has a four-to-six week window to a home, we're not going to give it screen time," said Amy Miles, chief executive of the nation's largest theater chain, Regal Entertainment. "That's outside the realm of any conversation we have had with the studios."

Gerry Lopez, chief executive of second-largest theater chain, AMC Entertainment, was equally adamant. "We do not intend to screen movies released under such circumstances," he said. "We understand the problem that studios are facing when DVD sales are nosediving, but we don’t see premium VOD as any kind of solution."

People close to the six biggest Hollywood studios have said they aren't considering VOD earlier than eight weeks. But while theater owners aren't threatening to boycott releases under such a scenario, they have said that even that amount of time would be destructive to the box office business.

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