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DVD unaffected by VOD day-and-date

by Barry Flynn

I’m fresh back from Informa’s TV Evolution Summit in Lisbon (where I was chairing some of the panels) with a notebook full of interesting stats. Chief amongst these was new data from Warner about their experiments with so-called ‘day-and-date’ release of VOD movies with DVD in Europe.

Many readers will be aware of the fact that VOD buy-rates remain rather low in Europe, because not much blockbuster content is made available, and those premium titles that do make it onto operators’ VOD servers tend to appear several months after theatrical release (and generally at least 90 days later than DVD).

One of the main reasons for this is that the Hollywood majors are worried about VOD possibly cannibalising DVD rentals and sales if the same title were to emerge at the same time on both platforms.

This is an entirely reasonable fear given that it’s so much easier to press a button on a remote to watch a film than it is to take a trip down to your local video store. However, it’s thought that this long release ‘window’ encourages people to download illegal copies of movies in the meantime because they’re unwilling to wait long enough for them to appear on TV on a pay-per-view basis.

Joanne Williams, Warner’s Executive Director of International Digital Distribution for the Benelux and Nordic reasons, has accordingly been carrying out experiments to discover if the studios’ cannibalisation fears are justified.

The short answer seems to be ‘no’, she told the Summit. In a recent live trial with consumers in the Benelux and Nordic regions, Warner released over 130 movie titles onto VOD at the same time as they became available on DVD.
The results, said Williams, were that the VOD buy-rate went up by 50% (as one might expect), but that DVD sales actually increased by 6%. DVD rentals, meanwhile, remained stable. The uplift was apparent across all types of title, not just A-list or B-list ones.

Williams acknowledged that a “strong combined marketing campaign’ was required to achieve these results, so a question remains as to whether one would achieve such an outcome under standard conditions.

But my guess would be that the money you save by doing joint promotions of a title across both types of media would enable the marketing effort to be spread more evenly – not just reserved for a few blockbusters.

Interestingly, consumers also appeared to be prepared to pay more to get premium product earlier on VOD, said Williams.

These results, which resemble those from trials in the USA, suggest that the studios may indeed be prepared to transition to a day-and-date model reasonably soon, which would revolutionise the European VOD market.

Some concerns about content security on VOD would also have to be addressed, presumably, but these results remain extremely encouraging. If fears of cannibalisation prove groundless, the majors would be able not only to obtain a net increase in revenues from VOD, but reduce their losses from piracy.

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