DirecTV to offer movies a month before they come out on DVD

After feuding between studios and movie theaters over earlier availability of movies to the home, DirecTV Inc. is ready to "Just Go With It." The El Segundo satellite television provider will launch so-called premium video on demand Thursday with the Adam Sandler comedy — just 69 days after the film opened in theaters.

Consumers will have to pay $29.99 for a two-day rental of the Sony Pictures movie. That's the first time a major studio movie has been available on television sets that soon after playing in theaters and at that high a price. Typically, consumers must wait at least three months before a mainstream Hollywood picture becomes available on DVD or standard video on demand, or VOD.

The comedy will be followed soon by three other movies: the Warner Bros. comedy "Hall Pass," Universal Pictures' thriller "The Adjustment Bureau" and Fox Searchlight's quirky comedy "Cedar Rapids." Exact release dates for those films have not yet been set, but they will be available on the premium service a minimum of 60 days after their theatrical premiere. Each movie will be offered for two weeks before disappearing and then, a few weeks later, reappearing at the standard VOD price of about $5.

The initial four films are among the first wave of premium VOD titles expected to come from other cable and Internet companies as well. DirecTV's agreement with the four studios calls for them to provide additional films in the future. Among the remaining Hollywood studios, Paramount Pictures is not participating in premium VOD for the time being and Walt Disney Studios is weighing its options.

Theater owners have complained that the premium VOD initiative could undermine their business by encouraging consumers to skip theaters in favor of waiting to watch films at home. Regal Entertainment Group, AMC Entertainment Inc. and Cinemark Holdings Inc., the nation's three largest theater chains, have all said they won't play "coming attractions" trailers for movies offered on premium VOD and might take other retaliatory economic measures.

Studios, however, believe the service could appeal to people with young children who have a difficult time getting to theaters. With DVD revenue down about 40% from its peak and box-office revenue and attendance off 20% this year, many in Hollywood are eager to test new business models.

The studios will receive $21 to $24 of the $30 rental price, according to a person familiar with the arrangement.

Derek Chang, who is overseeing the program that DirecTV calls Home Premiere, said he thought it would generate new revenue for movies in the period between when they first appear in theaters and when they later are released on DVD. "This gives the movie new life in between existing windows," he said. "It's hard to say we're going to be taking revenue from movies that aren't even playing in theaters."

Only about 6 million of DirecTV's 19.2 million subscribers have high-definition digital video recorders, which are necessary to access premium video on demand. But the big question for the satellite TV company and studios is how many people will be willing to pay $30 for a movie that already has played in theaters and will be available to rent on DVD for a few dollars only a month later.

One person close to the situation said expectations among DirecTV and the studios for the premium VOD launch were muted and the number of people who rent each film would probably total in the tens of thousands, at least initially.

"We'll see whether or not it works, but it's definitely worth a try," Chang said. "I'm not sure that the industry in its current state is a model that perpetuates well, so we have to keep looking for new ways to innovate."

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