VOD Headed For Collision Course With DVDs; Comcast Biggest Gainer

As VOD increasingly moves into the mainstream, it is headed on a collision course with DVDs, especially in the area of the rental market, Merrill Lynch says in a research note today. After a disappointing decade for pay-per-view and VOD revenue, analyst Jessica Reif Cohen finds that higher quality films are finally becoming more available for VOD. And as the digital cable becomes the norm, cable operators have more room on their systems for more VOD products. All which means that movie studios, which are timing VOD releases closer to the time DVDs hit the rental shelves, will see greater revenue over the next several years, rising from a current $640 million annually to $3.7 billion a year by 2011.
Other findings include:
— Comcast, the industry