WB Floats Another VOD Test Balloon

Maybe Hollywood's traditional release windows are about to shatter. On July 10, Warner Bros. will begin a VOD trial nationally, releasing their film The Astronaut Farmer, which starred Billy Bob Thornton and grossed $11 million at the box office, on video-on-demand services at the same time it comes out on DVD. The studio will test more popular titles such as 300 in certain overseas markets later in the summer. Per the Wall Street Journal (sub required):

The move is an attempt to persuade consumers to rent movies from video-on-demand services rather than from retailers who rent out physical DVDs. Studios typically keep 15% to 20% of revenue from video-store rentals, compared to 60% to 70% of a VOD rental. The studio wants to do that without cutting into the sale of DVDs to consumers, one of its most important revenue streams. But DVD sales, a $16 billion business last year in the U.S., have been slowing, forcing studios to experiment with other sales channels.

WB and other studios have been experimenting with this kind of release timing before, in markets such as Pittsburgh and Denver, working with Comcast. WB has also worked with Time Warner Cable in Austin, and believes that this combined window won't cannibalize its DVD sales. If anything, it's a way to couple advertising efforts for both platforms. And it seems timely in light of Apple's plans to launch an online rental service. Currently, iTunes sells older catalogue titles from a few studios (Paramount and Disney) and new movies from Disney (because of the Steve Jobs/Pixar/Disney connection). Certain retailers don't seem too happy about the competition.

Experimenting with distribution has caused headaches for studios in the past. Wal-Mart Stores Inc., a leading DVD seller, has complained to studios about their dealings with Apple Inc.'s iTunes, which sells older, catalog titles from several studios and new movies from Walt Disney Co. Target Corp. briefly pulled Disney content off store shelves after it started selling TV shows on iTunes. Wal-Mart representatives weren't immediately available for comment. Target declined to comment.

[Photo: THE ASTRONAUT FARMER, Billy Bob Thornton, Warner Bros./courtesy Everett Collection]

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