“There was good news for Apple and Comcast, but bad news for Blockbuster woven into Time Warner’s conference call with investors today,” Saul Hansell reports for The New York Times.
“Jeff Bewkes, Time Warner’s chief executive, said that the company’s Warner Brothers studio will now release movies for video-on-demand systems on the same day they are released as DVDs,” Hansell reports.
“Until now, people who wanted to watch movies on cable pay-per-view systems or rental download systems like Apple TV had to wait a few weeks after the same movie was released as a DVD,” Hansell reports.
“Warner Brothers has been experimenting with the new approach for the last few months. It has found that DVD rentals only fell by 3 percent to 5 percent and sales of DVDs actually increased,” Hansell reports. “‘Taking a customer and moving that person over from rental-physical over moving them to VOD day-and-date is like a 60 to 70 percent margin instead of a 20 to 30,’ Mr. Bewkes said. ‘So it’s about a three-to-one trade.'”
“All this represents the beginning of the end for the Hollywood system of sales “windows” that are used to extract the most profits from a movie,” Hansell reports.
“I spoke briefly this afternoon to Kevin Tsujihara, the president of Warner’s home video unit. He said that we are moving to an era when there will be thousands of titles available to rent on systems like Apple TV,” Hansell reports.
Full article here.