Movie theater chains ready to fight against premium video-on-demand offerings

Summary:We have no idea yet whether the decision by a group of film studios to test offering new movies on demand for $30 per pop a mere few weeks after they are released will be a hit, but it is already successful in ticking off movie theater chains.Fearing that the on-demand titles will cut into the already shrinking audience that will go out to the movies, the National Association of Theater Owners immediately called it a "misguided adventure.

We have no idea yet whether the decision by a group of film studios to test offering new movies on demand for $30 per pop a mere few weeks after they are released will be a hit, but it is already successful in ticking off movie theater chains.

Fearing that the on-demand titles will cut into the already shrinking audience that will go out to the movies, the National Association of Theater Owners immediately called it a "misguided adventure." Now specific chains have readied their knives against the participating studios, which include Fox, Sony, Universal, and Warner Bros.

Their tactics will range from not showing as many trailers from the participating studios to asking for lower rental fees for the films being released to on demand. AMC even crafted a press release touting "a new guest rewards program, better-for-you items, enhanced food and beverage offerings, dine-in theatre options and alternative, engaging programming for our guests to enjoy in our comfortable, state-of-the-art auditoriums."

However, none of the chains' proposals deals with the reason studios are anxious to put recently released movies on TV screens sooner: It costs too much for a typical family to go to the movie. While AMC and other chains may try to offer more amenities for current filmgoers, that doesn't address the fact that $30 for a VOD title is a fraction of the price of a family of four going to a flick when you factor in a trip to the concession stand.

After all, it's hard to sympathize with theater owners who openly admit that the ingredients in a $6 large popcorn only cost them 15 to 20 cents and have been fighting against new rules to make them reveal the nutritional information (or lack thereof) of said popcorn. That works against the moviegoing experience as much as any attempt by studios to get films in front of people who have abandoned going out to movie houses altogether.

Nonetheless, analysts believe the theater chains have a lot of leverage to battle premium VOD. In fact, they're bullish on the chains' stocks given the prospect that they can negotiate better rental deals with the studios.

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About

Sean Portnoy started his tech writing career at ZDNet nearly a decade ago. He then spent several years as an editor at Computer Shopper magazine, most recently serving as online executive editor. He received a B.A. from Brown University and an M.A. from the University of Southern California.

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