Premium VOD Is Doomed If This Piracy Study Is Correct

8mm movie film

A new PricewaterhouseCoopers study casts serious doubt on consumer willingness to pay for movies on digital platforms. Warning: Film-industy executives interested in reading further may want to first increase dosage of any anti-depressants they might be taking.

If, as recent comments made on media-conglomerate earnings calls would suggest, studios are gearing up to charge consumers $20-25 to watch movies in their homes two months or so after theatrical release, the new revenue stream known as premium VOD is headed for quite a bumpy ride.

The PwC study, which surveyed 202 adults last September who engaged in piracy, found that while 76 percent of respondents said “they are somewhat willing to pay a nominal fee if the content can be accessed closer to its release date,” consumers said they were willing to pay no more than $3 to download a movie and less than $1 for a TV program.

Note that’s “download,” which means to own, not the premium-VOD rental model. And it gets worse because even if the pricing was remotely comparable, two months is too long a wait: 83 percent of those willing to pay want the content within one month or less.

While things look bleak, let’s rain on a few more parades. If the industry thinks whatever it is doing now is discouraging pirates, it may be time to rethink that: 81 percent responded that are at least somewhat likely to use pirate websites over the next six months.

And those ad-supported sites like Hulu that were supposed to give pirates a legal alternative? Most (70 percent) of those who pirate also acquire free content legally from ad-supported websites. Which leads PwC analysts to conclude: “The growing number of ad-supported websites is contributing to increased piracy. Such sites may be causing confusion as to what is pirated content and what is legitimate, free content.”

Now let’s take some sting out of these numbers: Note that PwC only spoke to those engaged in piracy, not the general population. Extrapolating conclusions from this survey as to what the overall public might do is a big stretch because the attitudes and behaviors of acknowledged pirates may be completely different than that of non-pirates. What’s more, there may be more than enough non-pirates out there to build a sustainable market for fairly priced long-form video content.

PwC analysts make a number of recommendations on making radical changes to existing digital business models, but why? Unless there’s demographic evidence that pirates either outnumber non-pirates, or that both of these market segments harbor the same attitudes toward consumption (just different behaviors), altering pricing plans is pointless.

Let’s leave this on a heartwarming note. The study found that most said they do not pirate “in an effort to detract from studio profits.”

So don’t feel bad about those consumers who are destroying your livelihood. Turns out it’s nothing personal.


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