June 24, 2013
Hollywood studios are experimenting with a new business model in South Korea that offers movies through video on demand while they are still screening in theaters. “Django Unchained” was made available to rent online or via cable weeks after premiering in Korean theaters. A similar approach was taken with animated features “Wreck-it Ralph” and “Brave.” If the “super premium VOD” tests prove successful, they could impact how the studios view exhibition.
“The experiments, by Walt Disney Co. and Sony Pictures Entertainment, mark the first time major American studios have offered viewers anywhere the option of buying a ticket to see a movie or to rent it at home from a cable, Internet or satellite-television provider,” reports The Wall Street Journal. “Executives at the four other major Hollywood studios said they are watching Disney and Sony’s tests in Korea and may follow suit.”
Studios have experimented with new release windows in the past by offering VOD titles closer to theatrical releases at premium rental fees, but the results were considered disappointing and in some cases the experiments were met with opposition from exhibitors.
“At the Cinema-con industry convention in April, Universal Chairman Adam Fogelson argued for more early-VOD experiments,” notes the article. “He and others in Hollywood believe some consumers, such as parents with young children, are unable or unwilling to go to theaters and would pay a high price to watch a new movie at home.”
“It’s way too early to say if this will be a policy for any [Hollywood] studio or even a norm, but it seems to have potential,” said one individual close to the testing.
“Movie-going is a cultural experience, VOD is like watching TV,” said Kim Young-gi, a researcher at the government-supported Korean Film Council. “I expect their markets will remain separate.”