According to the studio head of 20th Century Fox, a deal allowing customers to watch movies in their own home just weeks after they’ve debuted in theaters is likely to be finalized in the next 6-12 months — with prices set at “less than $50.”
Up until now, media companies like Apple have been pushing for some kind of premium on-demand deal, but negotiations have been slow due to studios dragging their feet. However, at this week’s Bank of America Merrill Lynch media conference in Los Angeles, Fox studio boss Stacey Snider says that finally talks, “have started to coalesce around a concept.”
Rethinking a changing industry
Previous reports suggested that talks between Apple and a number of major studios were being held up over the price that Hollywood wants to charge for new rentals.
The issue is that, in a world with Netflix, the theater industry is no longer booming like it once was, and sales of physical films on DVD and Blu-ray are falling. However, while some big shakeup is clearly needed, it’s not easy to get studios to change a business model that hasn’t fundamentally changed in decades.
A price point until $50 would probably be important. A startup by Napster pioneer Sean Parker called Screening Room has tried to do home screenings of recently-released theatrical movies — with a $50 price point attached — but has so far failed to gain traction.
What’s not clear from the new report is whether the 6-12 month timeframe and “less than $50” pricetag would refer only to Fox itself, or a collection of multiple studios acting together.
It’s also not apparent which company they’ll choose to work with. A previous report claimed that Apple is the first choice for studios and exhibitors when they eventually agree to go down this route due to the company’s history of working with studios.
Back in the late 1990s, Apple’s movie trailer website became a great source of collaboration between Apple and studios. Apple got access to movie trailers for free, thereby increasing traffic to its site and showing off its impressive QuickTime technology. Studios, meanwhile, got to advertise their product without having to pay for bandwidth. The result was a win-win for all involved.
With Apple seemingly dipping its toes into the movie and TV production business, however, it will be interesting to see whether this hurts or helps its association with major studios.
Would you shell out money to see brand new movies on-demand in your own home? What would be an acceptable price point for you? Leave your comments below.
Source: Bloomberg
