New report suggests premium VOD will be killed off

Theater executives can breathe a little easier today as one of their greatest fears seems destined to falter. Premium VOD may be abandoned (at least temporarily) by movie studios as they face even more pressing concerns – that is, faltering ticket sales and a public split on theatrical 3D. A new report from market analysis and credit rating firm Moody’s Investors Service paints a bleak picture for the controversial business maneuver.

Moody’s findings argued that premium VOD, like forced 3D, may not be the weapon of choice against consumer apathy towards the box office. Rather, it could actually harm other distribution methods.

Deadline reports that the analysis cites video games and web browsing as just two entertainment options that are impacting the movie industry’s bottom line. The inclusion of gaming is particularly noteworthy, as the bulk of new titles cost $60. Compared to the standard $10- $15 ticket prices at theaters, games are a much greater investment. Then again, with many developers now boasting realistic graphics, summer blockbuster-esque stories and engaging multiplayer components it likely boils down to perceived value. Why pay $15 for a two-hour popcorn flick when you could spend $60 for an interactive experience that will last exponentially longer?

Additionally, the report states that “3D isn’t a cure” but rather an option that may occasionally hit big with the public – a notion proven by this year’s summer releases. 3D versions of “Green Lantern: Rise of the Manhunters” and “Pirates of the Caribbean: On Stranger Tides” failed to lure in more viewers than their 2D counterparts in the U.S., while last week’s “Transformers: Dark of the Moon” performed noticeably better (albeit with some important caveats).

Karen Berckmann, the analyst behind the research, was suitably terse about filmmakers relying too much on 3D films to do the heavy lifting. According to industry news site Home Media Magazine, Berckmann called those decisions “complacent” and urged studios to “rethink” certain strategies if they want to succeed.

“Despite the ups and downs of the summer box office, we think U.S. movie-theater attendance growth will continue to weaken,” said Berckmann.

While Moody’s seems down on premium VOD, entertainment news site Variety reported on Friday that DirecTV is moving forward with previous plans and will bring more content to its nascent platform, Home Premiere. Disney, which previously teased that it was developing its own exclusive service dubbed “Keychest,” has remained relatively quiet on the subject since announcing the “Disney Studio All Access” platform in February.

Premium VOD, which offers newly-released films for home viewing at the provocative price of $30 per rental, made headlines this spring thanks to a publicized kerfuffle that saw theater owners threatening studios who planned to support the model. The National Association of Theater Owners (NATO) also remains a staunch critic of pVOD, citing a possible impact on box office numbers.