Monday, September 10, 2012

Fox to offer movies online before stores

Movie studio and distributor 20th Century-Fox has announced that it will offer digital copies of both new releases some three weeks before DVD and Blu-Ray versions are available, and at prices that undercut typical list prices for home videos.  And it will do so on a global basis.
  Called Digital HD, the initiative is slated to launch Sept. 18 with Ridley Scott's Prometheus.  The initiative will also make some 600 older titles from its movie library available at the same time.  Fox chairman and CEO Jim Gianopulos indicated that the initiative was intended to take advantage of the explosion of digital devices, and help redefine digital ownership.  He indicated that the move wasn't likely to affect theatrical release, as availability will occur well outside the theatrical release window, or Blu-Ray sales, as the hard disk versions offered extras and improved resolutions.

  It also shouldn't hurt that Fox will likely make more per sale as the sole player in the distribution net (even at below list prices) than it will off of sales of physical DVDs and Blu0Ray discs.  The physical media not only have production costs that digital versions don't, they also don't have to account for substantial wholesale and retail markups that can account for half (or more) of retail list prices.  The movie industry in the U.S. has been taking small steps in this direction for the last few years (see posts on UltraViolet and Miramax's trial) but this is the first large-scale direct digital sales initiative.  Expect more.

Update: I forgot to discuss another important aspect of the Fox Digital HD initiative - the plans for Digital HD to not only open in the US, but in 49 other countries as well.  It's likely that Fox sees that not only as expanding into those markets directly, but as a move to combat online piracy.  Studies suggest that one of the prime attractions of pirated films outside the U.S. is the fact that US movies typically are not made available in those markets until much later.  Making films available simultaneously across the major international markets - legally, and at reasonable prices - could well blunt the demand for pirated versions.

Source - Fox Shakes Up Home Entertainment Market, Will Offer Movies Early Online for $15Hollywood Reporter.

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