Movies

Studios and cable cos for video-on-demand services

MUMBAI: Battling a massive decline in DVD sales, film studios including Warner, 20th Century Fox, Focus Features, Lionsgate, Rogue, Sony Pictures, Summit Entertainment and Universal have decided to toe the line of video-on-demand services.


“Having a robust digital platform for the rental of movies is good for consumers and good for the industry,” Warner Brothers Home Entertainment Group president Kevin Tsujihara said.


For years, film studios have not made an impact in their video-on-demand offerings worrying that creating too much noise would anger powerful retail partners like Wal-Mart and Best Buy that had prominence on DVD sales while film rental companies like Blockbuster could not create their own brand of video-on-demand cheerleading.


On Tuesday, Blockbuster warned in its annual report that competition and declining sales “raise substantial doubt about our ability to continue as a going concern.”


In contrast, on-demand usage rose 20 per cent last year. On-demand rentals are also more profitable for studios than traditional rental options. Blockbuster gives studios about 25 cents of every dollar spent on movie rentals; on-demand services deliver as much as 65 cents of every dollar to the studios.


Studios are of the view that a delay of days or weeks before traditional rental companies like Blockbuster and Netflix get access to new titles.

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