Wednesday, October 5, 2011

Universal to offer Tower Heist on Video On Demand 3 weeks after theatrical debut.

It could be a game-changer or could just be an irrelevant blip (it's so hard to tell sometimes).  The Los Angeles Times is reporting that Universal has announced a (very) limited test run with offering premium-priced Video On Demand for Brett Ratner's all-star caper comedy Tower Heist (trailer) just three weeks after the film's November 4th theatrical debut.  Long-story short, if you live in Atlanta or Portland and get your cable TV via Comcast (which now of course owns Universal), you will have the option of purchasing a (I presume) one-time viewing of the Ben Stiller/Eddie Murphy film for 'just' $59.99 just three weeks after the theatrical opening weekend (which I presume means the start of its fourth weekend in theaters).  Other online or cable companies will allegedly have the option to offer this same service at the same time, but we'll see if anyone else bites.  The price point is obviously intended to appeal for larger families or large groups of friends who don't have to see the newest releases right away, but don't want to wait until DVD and the other various home-video platforms.

If you live in LA, New York City, and I presume other big cities, a first-run evening ticket is about $12.  So factor in a family of four seeing an evening show is going to run them $50 alone before concessions and any parking fees are included.  Even in cities where tickets still remain under $10 (less than you'd think), the bill can easily end up topping $60 when you add in family-sized refreshments and the like.  The difference between this VOD offering and last Spring's disastrous 'Premium VOD' is that this will offer consumers the chance to see the movie while it's still in first run theaters and well-before it's available on DVD and other OnDemand-type sources.  So while I can think of no one who would pay $60 to see a first-run film at home by themselves or even with another party, I do see the theoretical appeal of a bunch of friends or a larger family getting together and taking it in.  What's your thoughts? Is this another botched attempt to circumvent the theatrical experience, or does the swiftness of said debut make it a more attractive option for larger parties?

Scott Mendelson  

1 comment:

HW said...

This is DOA. $60 is a nonstarter. There must be leprechauns and unicorns in the world Universal executives live in because they ain't living on planet earth.

The most noteworthy question at hand is not whether this will catch on (it won't) or will even be a blip (it will be too small to even be considered a blip), it's why Universal chose to look so desperate and clueless in such a public fashion (especially hot on the heels of the Netflix price hike fiasco).

Really, the stench of desperation and cluelessness emanating from Universal with this move is truly pungent. They're flailing, and are grossly miscalculating what audiences will pay for their product on Planet Earth and are grossly miscalculating how consumers' minds work.

People pay $12 each to see a movie...IN A THEATER. When they watch movies on their couch they pay $1 (Redbox) or $4 (Blockbuster) or $5 (premium VOD), regardless of whether they're watching it alone or with eleven friends. $60? Hmm...anyone who thinks movie-watching audiences adapt well to sudden price hikes in their product needs to take a look at where the Netflix stock was two months ago and where it is now. And that was even a relatively reasonable hike for their service -- $60 is la-la land.

Sure, a group of four friends will collectively pay $50 to see a movie in a theater, which seems ridiculous compared to a $4 Blockbuster rental, but consumers' minds don't work that way. "Hey, we as a group sure saved a lot of money!" So what? The group of friends is not a cohesive financial unit with shared financial interests.

Each person still experiences the movie individually, and paying $12 for their own ticket for a superior experience compared to the cheaper DVD rental is not that crazy when considered from the individual's perspective. Say I want to see a movie in a theater and am willing to pay $12 to do that. Well, some friends point out that AS A GROUP it's cheaper to watch it on VOD. So I'm stuck on the couch watching it? I'm supposed to be comforted because AS A GROUP we just collectively saved a few dollars?

But the number crunching justifications ("Hey, $60 isn't bad for four adults plus parking plus babysitter!") also misses another point. People go to the movies to GET OUT of the house. That's the point. To get the heck OUT of the house (and away from the kids) and forget about the laundry and the dishes piling up in the sink for just a couple hours. And to change out of the sweat pants and to see and be seen. And for couples to do something together. And yes, tickets ain't cheap, but they're still cheaper than dinner in a restaurant and live music and pro sporting events. Cheaper by a long shot.

If people want to stay at home and lounge in their sweatpants, they'll play Xbox or surf the internet or play a board game or watch a movie on cable or one of any number of things that do not cost sixty freaking dollars.

Again, I think this is a non-starter. More worrying is that Universal is one of the major studios, and is this move is at all reflective of their thinking and grasp of reality it is NOT a good sign for the health and future of a major industry player.


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