DECEMBER 28, 2009, 6:19 A.M. ET Studios Make Bigger Push for Digital Sales
By SARAH MCBRIDE Wall Street Journal http://online.wsj.com/article/SB10001424052748703521904574614671253849410.html?mod=WSJ_newsreel_technology The Showtime cable-television network has begun selling episodes of its hit series "Weeds" online, weeks ahead of the DVD release. The tactic, by "Weeds" producer Lions Gate Entertainment Corp., is the part of a more aggressive effort Hollywood is taking to boost online sales of digital movies. Studios have become bolder in how they push their shows and movies over digital channels. Earlier this month, Sony Corp.'s Sony Pictures started making online rentals of its hit movie "Cloudy With a Chance of Meatballs" available for owners of some Sony TVs and other devices, well before the film's Jan. 5 release on DVD. A Sony spokesman declined to say how many consumers were taking the offer. For years, studios have been betting that online distribution of movies and TV shows would turn into a robust business. Instead, they barely budged. A few years ago, Walt Disney Co. began pushing out its movies online at the same time that the DVDs became available. Many others have followed suit. Online movie sales will bring in just $237.7 million to studios this year, calculates Tom Adams, president of Adams Media Research. That compares with the more than $10 billion that will go to studios from sales of DVDs and Blu-ray discs. Meanwhile, DVD sales, traditionally one of Hollywood's biggest money makers, have fallen off a cliff. Consumers had plenty of reasons not to embrace online movies. Internet speeds in many homes weren't fast enough, and most people still prefer to watch movies on TVs rather than computers. Studios have had some success with video on demand, which allows consumers with digital cable to order up a movie using their cable set-top box. Video-on-demand sales totaled $1.27 billion this year, but that falls short of early expectations. In 2002, for example, some consultants were predicting the business would reach $2.8 billion by 2006. Many studios have begun throwing in a free digital copy with the purchase of Blu-ray discs. Typically, the digital copy comes on a separate disc that consumers can copy onto their computers, or is available at a Web site where consumers download a copy after entering a code. Thomas Gewecke, president of digital distribution at Time Warner Inc.'s Warner Bros., says consumers redeemed about 20% of free digital copies of "The Dark Knight" that came with the Blu-ray disc last year, a record for the studio. This year, "The Hangover" is one of the studio's most-watched online titles. "The real issue with digital is there hasn't been an obvious reason to use it," because most consumers want to watch downloaded movies on their TVs, says Kevin Lewis, senior vice president for digital entertainment at Blockbuster Inc. That is why he and other online movie purveyors are looking for a boost from new Internet-connected TVs, digital recorders and DVD players that will be hitting stores. Many connect wirelessly and come with buttons that connect consumers directly to movie sources such as Blockbuster.com and Netflix.com. "Now the big hope is connectivity to the TV set will unlock the market in a big way," says Mr. Adams. According to research firm NPD Group, about 8% of all flat-panel TVs sold in the U.S. this year came ready to connect to the Internet, up from 3% last year. Some studios are looking to connected devices that already are in millions of homes: gaming consoles like Sony's PlayStation 3 and Microsoft Corp.'s Xbox 360. "There is a growing opportunity for [digital sales] with devices connected directly to the TV, like PlayStation and Xbox, especially as the demo of those products broaden beyond the core male gamer," says Aubrey Freeborn, senior vice president for VOD and electronic movie sales at News Corp.'s Twentieth Century Fox, which sells movies on PlayStations and TV shows on both services. News Corp. also owns The Wall Street Journal. -- ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 Mail: antunes at uh dot edu *********************************** * POST TO [email protected] * *********************************** Medianews mailing list [email protected] http://lists.etskywarn.net/mailman/listinfo/medianews
