Will Hollywood Break the Window?
How costly will this new early (or "premium") VOD be? Try $20 to $30 per view. That's the pitch Time Warner is making to Disney, Universal, Sony, Paramount, and Fox. If some of them sign up in the fall, we could start seeing major titles on early VOD by year-end or 2011. See The Wall Street Journal.
But there's a major snare in the early-release scenario. Theater owners hate it. From their historic perch at the top of the staggered-release heap, they resent the prospect of their position being encroached upon by early VOD. The New York Times reports: "One senior theater executive, who spoke on condition of anonymity because he was not authorized to speak for his chain, said theater owners had made clear to film distributors that they simply would not book films that were simultaneously available in another medium."
If early VOD does wiggle into the release-window structure, early-adopter HDTV households will be thwarted from participating. First-generation HDTVs use component video as the only high-def entry point and Hollywood will use selectable output control to prevent the analog interface from passing signals (because it's allegedly not pirate-proof enough).
But with the steep pricing, it's questionable whether even viewers with HDMI-equipped sets will want to rent movies for up to $30. And if theater owners retaliate over the release-window change, the studios would see a major source of revenue wither. They may end up finding SOC wasn't worth the wait after all.