Hollywood Wants Direct-to-TV Shortcut

Major Hollywood studios are said to be in talks with the nation’s largest cable television provider to facilitate sending newly-released movies to TV within weeks of their box office debuts.

This shortcut in how movies are delivered and viewed would completely alter how film distribution takes place and would likely have huge implications for the rental market.

Time Warner Cable broke the news of its “Premium Video on Demand” at a cable industry convention earlier in June. The cable giant presented several scenarios for how it could work; the one receiving support from most studio executives seems to be the idea of taking movies 30 days into their box office release and sending them to pay-per-view viewers at home.

This shortcut-to-home would mean that those willing to spend the money to see the new movies before they hit video (a full three months early) would pay a premium to do so. That premium of $20-$30 could mean a large income for studios and TW.

Talks are ongoing and nothing is finalized, say insiders, but some studios may sign before the summer’s end and these Premium Video on Demand offerings could be available as early as December 2010 or the first quarter of 2011.

Those likely to be most affected by this shakeup would be secondary theater venues, which often receive movies well after their original debut, and rental outlets, which are already suffering from a sluggish economy and streaming options such as Netflix. These businesses thrive on the staggered system that Hollywood currently uses to promote movies, pushing them to premier theaters, then secondaries, then DVD release for rental and purchase and then cable or satellite TV.

The proposal was pitched to most major studios in Hollywood including Warner’s own Warner Brothers, Walt Disney, Universal, Paramount and others.

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