Would you pay $25 to watch a newly released movie at home?
Hollywood studios recently won an FCC ruling allowing them to stream movies directly to the home via a pay-per-view type service. The FCC also granted them the ability to restrict recording capabilities should they choose to pursue. MPAA secured this restriction as a play against online piracy and copyright protection. So the question is up to consumers, would you pay to watch recent movie at home only once for $25 while waiting to purchase a DVD?
Studios are increasing seeing year-over-year DVD sales figures trending downward and are looking for ideas to offset the lost revenue. One could make the case that streaming video is the next big play. NetFlix which already reports its 17 million customers are primarily streaming content agrees. Would DVD’s go away? Not hardly. Netflix, YouTube and video streaming is still in an early-adopters phase of the technology life cycle. And let’s not discount that internet service provider infrastructure is not capable of 100% streaming content in all markets. There is still room for DVD sales in this market. So where is the driver for the studios and how long will DVD’s be around? Are DVD’s bound to go the way of all technologies into obsolescence?
DVD manufacture and distribution timelines average 4 to 6 months once the movie closes in theatres. DVD sales revenues average between 10-15% of the box office ticket sales. The studios may be gambling that consumers might go the pay-per-view route to fill in the gap to bring the revenue forward. It is no surprise that in this economy all businesses are struggling. Looking for new revenue opportunities is one of many strategies. It’s a gamble in this market that they still have room to wiggle while the technology side sorts out consumer demand.
Would you pay? If not, why not?
 Data Sourced from TheNumbers.com and Boxofficemojo.com