Hollywood Bringing Movies To Your Living Room, For $30 Each

Hollywood studios will soon pull the trigger on a new offering that will let viewers rent relatively new feature films from the comfort of their living rooms. Studios are hoping that movies available in a new “premium VOD” window, which cable viewers will be able to rent for $30 a piece, could stem sharp declines at the box office. Hollywood’s problem however, might not be the price or convenience of going to the theater, but the overall quality of films being produced.
According to Variety (s enl), Warner Bros., (s TWX) Sony, (s SNE) Universal (s cmcsa) (s ge) and 20th Century Fox (s NWS) have all agreed to roll out premium VOD services under the brand name “Home Premiere” beginning next month. DirecTV (s DTV) will be the first distributor to make the premium VOD service available to its 20 million satellite TV customers, with cable companies like Comcast following soon after.
The introduction of Home Premiere comes as Hollywood faces sharp declines in box office revenues and theater attendance. Box office returns for the first quarter are down 20 percent from the first three months of 2010, following an equally dismal holiday movie season. By introducing a new VOD rental window 60 days after films have their theatrical release, Hollywood studios are betting they can capture viewers in their homes with nearly-new movies they might not have watched otherwise.
While the average cost of movie tickets is today a little less than $8 a piece, the price can edge much higher, especially in metropolitan areas like New York City or L.A. And when one takes into the cost of parking, hiring a babysitter, theater concessions and the like, $30 might seem like a bargain, especially when one adds in the convenience of being able to watch a new-ish movie on your own big screen TV and high-def sound system.
But by introducing a new movie window that essentially overlaps movie theaters, the studios have angered their primary distribution partners. Last year, theater owners revolted after Disney (s DIS) announced plans to make DVD and Blu-ray discs for Alice In Wonderland available three months after theatrical release as opposed to the usual four months. A premium VOD window would potentially cut even further into box office sales.
Despite the concerns of theater owners, there’s no guarantee the premium VOD plan will actually work. After all, for most home viewers, $30 Home Premiere titles won’t be competing with potentially more expensive trips to the local cinema, but competing with $5 or $6 VOD rentals for older titles.
Perhaps more importantly, the decline in box office revenues isn’t necessarily due to the inconvenience and cost of going to the movie theater, but due to the poor quality of films that have been released over the past year. While the 2009 holiday season and early 2010 seasons were dominated by major 3-D titles like Avatar or Alice, there haven’t been any huge breakout hits in the comparable time period over the last six months. Giving users earlier access to movies they didn’t want to see in the theaters will probably not change their likelihood of paying for those movies.
Photo courtesy of Flickr user Hey Paul.