Comcast offers on-demand on DVD street
UPDATE: Movies from nearly every major studio available in experiment
By Jennifer Netherby -- Video Business, 12/26/2006
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DEC. 26 | The country’s biggest cable operator Comcast has begun offering movies from nearly every major studio on-demand in two markets the same day they debut on DVD, erasing the standard window between a film’s DVD release and its pay-per-view introduction.
Comcast is offering select films from Warner Home Entertainment Group, Paramount Pictures, The Walt Disney Co., NBC Universal, 20th Century Fox and Lionsgate day and date in Pittsburgh and Denver.
Comcast isn’t commenting on the experiment, which started Nov. 28 and has included Warner Home Video’s Superman Returns, Disney/Pixar’s Pirates of the Caribbean: Dead Man’s Chest and Paramount’s An Inconvenient Truth, among others.
Warner Home Video is offering all of its movies that debut on DVD during the test period, which runs through early 2007, said Warner Bros. digital distribution VP of on-demand Andy Mellett.
“We’re looking at seeing how this earlier window, which has been much touted by cable operators as growing the on-demand business, if it drives buy rates and also see if it has an impact on DVD sales,” Mellett said.
Customers pay $4 for an on-demand viewing day and date with the DVD release, the same price Comcast charges in other markets where films are available on-demand in the standard PPV window, which trails a DVD release by 30 to 45 days.
Warner and other studios will compare sales of movies released day and date on-demand in Pittsburgh and Denver with sales of those same films released on-demand in other markets in the PPV window. The studio also is watching DVD sales and rentals in those markets to gauge the impact. It’s too early to tell how the test is going since the first releases made available day and date only became available on PPV in other markets on Dec. 28. “Our bread and butter is DVD sales, and we are not in any way going to jeopardize that,” Mellett said. “We’ve always said that the on-demand user is more similar to the rental customer than the sell-through customer. The titles that overperform on video-on-demand are not the ones that people want to own.” Execs from other studios involved weren’t commenting on the offerings. Warner is in talks with one other unnamed cable operator to run a similar test, but the studio will only take part if other studios are involved, Mellett said. Blockbuster is so far the only retailer taking a vocal stance on the test. “The movie studios make far more money on the sale of a DVD to a conventional retailer versus the profits they stand to make on a video-on-demand service,” the company said in a statement. “Because the sale and rental of DVD represents the studios’ largest revenue stream (almost 70%), we believe they will be very cautious in introducing any new, less profitable service that could be cannibalistic to the rental and retail channel.” Netflix declined to comment, and Wal-Mart didn’t return calls for comment. Comcast has been pressuring studios to offer movies on-demand in the DVD window, shopping a proposal to studios last year that would allow Comcast subscribers to pay $17 to get a movie on-demand the day it debuts on DVD with the cabler also sending out a DVD of the film.