Home Media Magazine has run an interesting article in which BTIG Equity Research analyst Richard Greenfield asserts that Hollywood is getting close to achieving its windowing ambitions for new release movies that place kiosk and by-mail rentals at the bottom of the food chain.
The article states that the studios’ preferred sequence of windows for new release titles would include offering, after a two-month theatrical window, “new releases as premium priced (from $25) video-on-demand (VOD) on cable and the Internet, followed by electronic sellthrough on iTunes, Amazon VOD, Wal-Mart’s Vudu, DVD/Blu-ray sellthrough, electronic rental via cable/web VOD, store-based rentals, kiosks and lastly, subscription-based rentals such as Netflix.”
With the recent FCC waiver decision enabling video-on-demand releases the day titles hit theaters, Greenfield sees this channel taking off in the coming months:
“We would expect premium priced, early release VOD movies to become a reality before year-end,”
Greenfield also believes that it’s in the studios’ best interests to quickly get their preferred windowing sequence in place before physical media reaches its nadir:
“Hopefully, the studios actively embrace and push out these sequential release windows before digital, IP content eliminates half of the aforementioned windows,”
In addition, Greenfield expressed incredulity that Disney will be allowing its hit film Alice in Wonderland to be available at Redbox, etc. on the day of its release to the home video market. Said Greenfield:
“Consumers cannot rent a movie (legally) the day it hits the movie theaters, why should they have easy access to renting it for $1/day the same time it hits Wal-Mart for sale at $16? We understand what a consumer wants, we just see no reason why the studios should enable that behavior.”
What do you think, Insiders? Is Greenfield right in saying that the studios should not be giving consumers what they want (cheap day and date rentals) in this case? Is there a large group of consumers out there that are willing to pay $25 to view a movie at home the day it launches in theaters? Are the studios underestimating the public’s willingness to trade instant gratification for cost savings?