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Friday, June 02, 2006

DVDs vs. Digital Downloads...Variable Pricing for Movie Tix?

Two items for this morning...

- Home Media Retailing this week held its fifth annual Home Entertainment Summit, the subtitle of which was `DVD's Nine Lives.' Here's the Hollywood Reporter's coverage. Apparently, execs on a panel that covered digital downloading "agreed [that] digital downloading won't have much of an impact on packaged media for at least a decade."

I think they're wrong, but...that prophecy could come true, for three reasons. First, if the studios remain restrictive about what people can do with digitally-downloaded movies -- allowing them to be played only on PCs and portable players, but not burned onto DVDs for ultimate portability -- that could prolong the life of the physical DVD. Second, if consumers decide they want to make the transition to high-definition movies, those movies will be better delivered on discs for the next few years, since they contain a lot of data (30-50 gigabytes), which is cumbersome to download, even at high speeds. (This assumes that the standards battle between Blu-ray and HD-DVD won't last long.) Finally, studios need to get comfortable with formats other than Windows Media for secure downloads, so that any user can purchase their digital content, not just Windows users (as is the case today with Movielink and CinemaNow.)

- In the San Francisco Chronicle, columnist David Lazarus has a piece about instituting variable pricing for movie tickets, something that I think theater owners would like to do, but studios are resisting. Lazarus writes:

    ...With movie theaters taking ever more heat from home-theater systems and DVDs and cable channels like HBO, why not introduce a sliding scale that makes ticket prices more attractive for films that aren't exactly the next "Lord of the Rings"?

    Kendrick Macdowell, general counsel for the National Association of Theater Owners, responded that "this is a question getting bandied about more and more these days."

    In other words, theater owners themselves are increasingly aware that the movies they show are often unworthy of the hefty ticket prices they charge. And they know they have to do something to address the problem.

    However, Macdowell said it's unclear how theater owners could introduce a sliding scale for ticket prices without the cooperation of movie studios, which can lay claim to as much as 90 percent of box office revenue from heavyweights like "X-Men," which raked in about $123 million last weekend.

    "A lot of our flexibility on pricing is limited by the studios," he said.