What would it be like to be able to access the next big blockbuster from home – on the same day it hits theaters? According to a Wall Street Journal report, this concept may be closer to reality than you might think.
A proposed service aims to make this a reality and could leave Hollywood full of both fear and fascination. There is a catch, though. Don’t expect to have access for low rates. Prices currently being discussed by Prima Cinema – the startup touting the service – will ensure these movies reach only the most well-to-do of living rooms.
Prima intends to charge customers a one-time fee of roughly $20,000 for a digital-delivery system and an addiction $500 per film. The company already has about $5 million in backing from the venture arm of Best Buy Co., and General Electronic Co.’s Universal Pictures. Delivery through this platform could happen as soon as one year from now.
Mixed reactions have emerged from Hollywood over the steep pricing of the service. Some executives wonder if it will be possible to build a market beyond a few thousand users. Others say the high price could create an exclusive, super-premium niche market without cutting into existing sources of revenue.
Prima's founder and chief executive, Jason Pang, noted that the company is not in business to replace anything, but is instead trying to create new revenue streams for studies and new viewing opportunities for moviegoers.
The Prima system could introduce a twist in the ongoing debate over the future of “release windows,” or the practice of staggering the distribution of movies through different channels to maximize the profits in each. This system has already come under pressure due to plummeting DVD sales and rising digital piracy.
A hot-button in the debate has been an early, “premium” video-on-demand window. This service would also cable subscribers to pay $30 or so to watch a movie or two after its debut in theaters.
Studios no longer make as much from the sale of DVDs and U.S. consumers are spending less in the DVD market, by as much as 20 percent from 2009. At the same time, consumer spending on video-on-demand services rose 17 percent from 2009.
To date, Prima has met with all six major studios and a number of smaller, independent studios, to discuss the licensing of their films. Prima anticipates securing contracts from several of them when the company officially launches its service in late 2011.
Will you be on hand with a $20,000 check and $500 budgeted for each movie? I think I’ll take the $10 ticket, overpriced popcorn and theater seating.
TechZone360 Contributing Editor
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