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Premium VOD, also known as home theater on demand, would represent a formation of a whole new window for in-home exhibition of films just a few months after they’ve been in theaters with a rental price of just $25-30. Just last week, Time Warner (NYSE: TWX) chairman Jeff Bewkes was talking up premium VOD and hinting it could be available in the middle of 2011. But one of News Corp.’s top digital chiefs today described the deployment of premium VOD as “the slowest product rollout I’ve ever seen.”
Peter Levinsohn, president of new media and digital distribution at Fox Filmed Entertainment, gave a candid assessment of the complexities all studios are facing given the risks associated with cannibalizing revenues for films that cost hundreds of millions of dollars. “You don’t want to go far up against theatrical and impact that business,” said Levinsohn.
Levinsohn would not put a timetable on News Corp.’s own entry into premium VOD, ticking off a list of obstacles beyond just risk, including building up enough content to go to market with enough films that would prevent the offering from being sporadic. Other challenges Levinsohn identified ranged from fine-tuning the technology to figuring out exact timing and pricing of the film post-theatrical window. Then there’s the matter of bringing together enough distributors to hit critical mass. “I’m not sure we want to go out with one distribution platform alone,” he said.
Levinsohn, who oversees digital distribution for Fox’s TV and film properties, noted that he sees premium VOD not pulling people out of theaters, but reaching out to a segment of the population that doesn’t go to theaters much for a variety of reasons, including the demands of child-rearing. “It’s not about day and date (releases) and seeing how we disrupt,” he said. “It’s about going after a segment that isn’t going (to theaters). We’re trying to be accretive, not cannibalistic.”