Peter Kafka

Recent Posts by Peter Kafka

Hollywood Rolls Out $30 Rentals. Smart.

Would you pay $30 to rent a movie?

Hollywood thinks you may. Four of the big studios are rolling out a “premium VOD” offering, where renters at home can pay extra to see films that were just in theaters but aren’t yet out on DVD.

Time Warner, Sony, Comcast and News Corp.’s movie studios are all in (News Corp. also owns this Web site), and the films will start rolling out on DirectTV–and in some Comcast cable markets–soon.

And once you get past the initial sticker shock, this one makes sense. Or at least it might to a certain segment of the population that wanted to see something in theaters but couldn’t get there in time.

In fact, for some moviegoers, $30 could be a bargain. Average ticket prices hit $7.89 last year, and it’s much more in urban centers: Two tickets at my local theater in Brooklyn will set me back $25. And if you need to hire sitters, pay for parking, etc., you’ll quickly get past $30.

And if that still seems too high, no worries–you can still wait and pay less down the road.

Regardless of how this specific price point works out, the fact that Hollywood can try it illustrates why the movie business is faring much better against the digital disruption that has blown apart the music and newspaper businesses: Hollywood has conditioned moviegoers to the notion of “windows,” which gives it the ability to charge different prices at different times in a product’s life.

Even if you have no idea what a window is, you know you pay a certain amount to watch a movie in a theater, a different price to buy it on DVD, a different price to rent it via Apple’s iTunes, or a certain amount a month to get it via Netflix, etc.

That flexibility is now the envy of other media businesses that are just now trying to get there.


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