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Will you pay $30 to see a film at home that's still in theatres? The studios hope so

Can you imagine paying $30 for a first-run movie in your own home? According to a leaked report in Variety last week, four of the six major studios - Warner Bros., Universal, Sony and Fox, but not Paramount and Disney - were preparing to begin a new premium video on demand service at a $30 price point starting later in April to the 20 million subscribers of the U.S. cable television service DirecTV, followed by other cable companies at a date to be announced. So far, no news about Canada.

The controversy the announcement has raised is not about the price, but about the timing of these releases to home viewers just two months after the movies hit the theatres. The Variety story landed on the last day of CinemaCon, an annual schmooze-fest between studios and movie distributors held in Las Vegas. The National Association of Theatre Owners issued a terse, wounded reply, decrying the studios' secrecy in this "misguided venture" that it said would upset the economic balance of the industry and promote piracy by getting pristine digital copies of movies out there even earlier.

The studios, mostly off the record, argue the earlier VOD release is unlikely to hurt theatre revenues much, and the early video releases represent an untapped market. For an underperforming movie such as 127 Hours (which earned just over $18-million domestically), the early VOD release could help. Over all, the box office numbers support their position. In 2010, the top 25 biggest grossing theatrical releases of the year had earned 95 per cent of their total box office by their 60th day in theatres. Early VOD is just a way of squeezing out a few more drops.

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The issue is more about the shifting balance of power between studios and theatres. If 60 days works, why not reduce it to 30, or even video on the same day as the theatrical release? By cannibalizing their own profits early, the studios could be hurting the entire film business in the long run. As Ellis Jacob, chief executive officer of Canada's largest theatre chain, Cineplex Entertainment, put it, the studios may be "trading a quarter for a dime."

Some theatre chains are fighting back. Regal Entertainment, the largest U.S. theatre chain, has told the four studios that, effective April 15, it is halving the number of trailers it will play for their films and will not run a spot for any film that is slotted for premium VOD. A second chain, Cinemark, says it will offer no theatre signage or trailers for any film from the studios until it is told, in writing, whether the film is slotted for premium VOD. Prominent directors James Cameron and Todd Phillips ( The Hangover) have expressed their support for the theatres. There are also threats that theatres will renegotiate the box-office split (which currently slightly favours the studios) for companies that go to VOD.

Through all this, the most puzzling thing is trying to imagine the target audience for this pricey video plan. Children's parties? Summer camp? According to a PricewaterhouseCoopers study, recently reported in Time magazine, the research doesn't justify it. Only 29 per cent of those polled said they'd be interested in paying more to see a movie sooner. The cost of movies, not timing, is what concerns most consumers. The price point they thought was fair for a new movie on video was $3, not $30. "Many consumers said if they really wanted to see the movie, they would have seen it at the theatre," the study said.

Finally, there's the quality of those early titles that have been announced: Adam Sandler's Just Go With It, Cedar Rapids and the Liam Neeson thriller Unknown. Let's see now: The Adam Sandler comedy that I didn't want to see eight weeks ago is now available in my home for three times the price? Maybe I can hold on until the next time I'm trapped next to someone I don't want to talk to on an airplane.


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Film critic

Liam Lacey is a film critic for The Globe and Mail. More

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