Movie Studios Split On Same-Day DVD And Digital Releases
This story was written by David Kaplan.
Poring over entertainment companies Q2 earnings results, NYP identifies a sharp divide in the way the studios are starting to regard the push toward releasing movies for same day DVD and online VOD release of movies. On one side, Time Warner (NYSE: TWX) and Sony (NYSE: SNE) are fairly positive about expanding "day-and-date" VOD releases, while Viacom (NYSE: VIA), Disney (NYSE: DIS) and News Corp (NYSE: NWS). are much less sanguine about pursuing this format. The advantage for Time Warner and Sony in widening their VOD play has much to do with adding benefits to their distribution and hardware systemsi.e., TW's connection to Time Warner Cable (NYSE: TWC), though it is being spun off by the end of the year, and Sony's Bravia hi-def TV line. Plus, the two have vast film libraries, and both would like to see more revenue from releasing products that are otherwise gathering dust in a vault.
But for Disney, Viacom and News Corp., the fears of cannibalizing their physical DVD businesses outweigh the relatively ancillary benefits from day-and-date VOD. During the company's Q2 earnings call, News Corp. COO Peter Chernin expressed fears about digital VOD eroding DVD sales, adding, "What's paramount is protecting our margins." In the end, the studios will likely embrace day-and-date, whether they do it enthusiastically or grudgingly. And so, Jupiter Research analyst David Card, expects consumers to face higher charges for the these VOD releases. "It should almost cost like event VOD, like for a Friday night boxing match," he told the Post.
By David Kaplan