Disney: VOD Starting to Impact Rental

[Damion Chaplin]

<div class='os_post_top_link'><a href='http://www.videobusiness.com/article/CA6343554.html?nid=2841' target='_blank'>http://www.videobusiness.com/article/CA6343554.html?nid=2841</a><br /><br /></div><i>"Increased video-on-demand offerings through cable companies and online are starting to cut into the video rental business, Walt Disney Co. senior VP and chief financial officer Tom Staggs told analysts at the Deutsche Bank Telecom and Media Conference Tuesday. “I think that physical rental will continue to occur, but so far, it looks to me like you’ve got a cannibalistic effect that, at the end of the day, I don’t think hurts the overall marketplace,” Staggs said. “It certainly hasn’t hurt overall revenues for us.” He said that because of its extensive library, the studio is insulated from declines in the rental market."</i><br /><br />Interesting, although not exactly unexpected news. I know a couple of times I've ordered a movie on-demand instead of driving to the rental place, so for me at least this is certainly true. However, I decided not to do that anymore because of one thing: SD TV. Unfortunately, my cable company doesn't offer VOD in high-def, which makes watching a movie on-demand a less-than-satisfying experience. For Disney movies, though, I can definitely see the advantage to turning it on and parking the kids in front of. Why go to the video store when you can just tune to a channel and give them their choice? Kids don't care about high-def pictures, they just want to see Nemo. Disney is one of the only (if not THE only) studios that could announce they're never selling another physical DVD again and they'd still get massive revenues from parents via VOD or online sales. By the way, I think Fox's estimate of 'several hundred million' in HD sales in 2006 is rather optimistic, don't you?

[Felix Torres]

Disney is one of the only (if not THE only) studios that could announce they're never selling another physical DVD again and they'd still get massive revenues from parents via VOD or online sales.

Don't encourage them; that's *exactly* what they want.
Especially in the kids market, a rental-only market becomes a money pit for the parents.
From what I've seen, the average kid tends to watch a given kid movie something like a hundred times in one year. ;-)
So, instead of a $15-20 DVD sale, Disney would get anywhere from $100-300 per household. Per movie.
Yup, they really like rentals, they surely do...

As for being the only studio that can do this, I'm thinking Warner Bros has a library that lends itself to this same kind of repeat business, what with its classic toons library and the new portfolio they've been building off the Toon network and the DC Comics characters. Plus they have Harry Potter.

Paramount has a lesser money printing franchise in the Trek series where they could argue that eternal rentals is actually cheaper than buying because of their outrageous DVD pricing schemes.

Where these direct rental operations are going to *really* start biting into the market is when they start to approach syndication as a revenue-generator. Cause at that point you'll see the emergence of content develop *exclusively* for the direct-delivery channel.

And yes, Disney is best positioned for exactly this with their Moviebeam effort. And again, I'm not sure we want to encourage this kind of stuff; on-demand content publishing is a great content but not if you're going to have ten separate STBs cluttering up the joint. Which, I suspect, is why Disney is being so aggressive in this area; they want to get their proprietary box established before generic IP-based alternatives emerge...

Hence their crowing.
If I sound ambivalent its because I am: I see all TV eventually going to a publish/subscribe/on-demand model but I want it on an open distribution system, not on a proprietary lock-in platform.
IPTV, yes; Moviebeam, please, no!

[Chris Gohlke]

Paramount has a lesser money printing franchise in the Trek series where they could argue that eternal rentals is actually cheaper than buying because of their outrageous DVD pricing schemes.

Tell me about it, I've purchased the entire Trek library on DVD. It did not seem too bad over the years as they were spaced out so there was not a huge outlay at any one time. Now I look at the shelf and see $3,000 + that I have spend on DVD's for Star Trek. It makes me smile and cry at the same time. They should have some super special bonus for the few that bought the entire collection.

[Felix Torres]

They should have some super special bonus for the few that bought the entire collection.

They should Tuckerize *both* of you in the next movie. :twisted:

[Damion Chaplin]

Now I look at the shelf and see $3,000 + that I have spend on DVD's for Star Trek. It makes me smile and cry at the same time.

Not to mention $500 on the entire Farscape series... Good thing BSG is $40 a season. :)

[Jason Dunn]

Now I look at the shelf and see $3,000 + that I have spend on DVD's for Star Trek. It makes me smile and cry at the same time.

I agree, it's sick - yet I did exactly the same thing. ST, ST:TNG, DS9, Voyager...I have them all. I haven't bought Enterprise yet because it's still somewhat fresh in my mind, and I think it's sick how expensive they are. So I'm taking my moral stand....somewhat after the fact. :lol:

[Chris Gohlke]

Don't forget the eBay copy of the Animated Series (which will be replaced with an official version if they ever release it) and the downloads of New Voyages. Plus two copies of all the movies because they had to come out with the Special Editions after I had bought all the original ones.

[Jeremy Charette]

All I want is the season finales for the spin-off series. Voyager's final episode was a tour de force.