Blog Post

Proof that Windows Hurt Sales?

Releasing movies for purchase on DVD and on-demand at the same time can increase sales of both, according to an experiment by Comcast and six studios: Warner Home Video, Paramount Pictures, Disney, NBC Universal, 20th Century Fox, and Lionsgate. The study, conducted between November and April, was reported today by the publication Video Business today.

Video-on-demand purchases were 50 percent higher when offered in the test markets of Pittsburgh and Denver on the same day DVDs came out. And the benefit goes the other way too; DVD sales were up 10 percent. However, DVD rentals fell 2 percent. You could reasonably conclude that the “windows” normally instated between video release in theaters, on DVDs, on-demand, and elsewhere, have the effect of suppressing sales — or at the very least, eliminating some of the windows gives sales a boost they wouldn’t have otherwise had.

VOD buy rates varied by film, depending on box-office take and genre. Horror and comedy titles saw the biggest gains, with VOD buy rates up 62% and 58%, respectively, in the test markets, according to Warner. Films with box-office grosses of more than $100 million, which tend to sell better than they rent on DVD, showed relatively little improvement on VOD, Mellet said.

As a result of the study, Warner Home Video is going to offer movies such as The Astronaut Farmer simultaneously on VOD and DVD nationwide, according to the article.

Video Business spoke with Andy Mellet, Warner Bros. digital distribution VP of on-demand, who “couldn’t say whether the gains in VOD revenue were enough to make up for the 2% drop in DVD rental, but he noted that the company gets better margins on VOD sales than on DVD rentals.”

Of course, despite the promising studies, it’ll be a while before studios collapse the windows between releasing films in theaters and for download to your computer. Now that would be sweet.