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VOD turning into prime entertainment source for moviegoers

Movie tickets are expensive, babysitters are tough to find, and theater audiences can be rude.

Watching movies at home is cheaper and comfier, but new releases that everyone's talking about are showing only at multiplexes, right?

Not always, and perhaps not for much longer. Several of this summer's buzzed-about titles simultaneously debuted on television as video-on-demand offerings, a trend shaping up as the future for movie distribution.

In recent weeks, I've chosen to stay home and watch the Roger Ebert biodoc Life Itself — one of this year's best movies — plus Bong Joon-ho's action allegory Snowpiercer and the Amy Poehler-Paul Rudd rom-com spoof They Came Together.

Each cost under $8 on Verizon Fios VOD, with 48 hours to view. Other systems may differ in price and availability. It's convenient enough to make purists reconsider the notion that first-run movies — at least not special-effects extravaganzas like Guardians of the Galaxy — belong only on multiplex screens.

Movies have been available on demand for years, but lately some available selections are more than just mediocre efforts that can't cut it in theaters. Studios are slowly warming to the idea of first-run VOD, maximizing audience exposure while slashing distribution costs.

The Weinstein Co.'s release Snowpiercer is the most recent head-turner, with nearly $5 million earned so far by VOD, slightly more than its take in 356 theaters. Two years ago, the Richard Gere drama Arbitrage reportedly grossed $14 million on video demand, nearly double its conventional ticket sales.

Thanks to digital permanence, both movies can potentially continue making money long after they're gone from theaters.

No one appreciates this shift in Hollywood's business model more than producer Dori Sperko of Bradenton, whose recent film Among Ravens debuted in July, both in a handful of theaters and VOD. The day-and-date strategy will be repeated for her next release on Nov. 7, the comedy Sex Ed, starring Academy Award nominee Haley Joel Osment (The Sixth Sense), and filmed around Tampa in 2013.

"More movies than ever these days make more money in digital formats like VOD than in theaters," said Sperko in a telephone interview.

Sperko knows from experience. Her 2013 comedy Ass Backwards, a Sundance Film Festival selection, earned only 3 percent of its revenue from theaters. The rest came from DVD rentals, VOD downloads and the sale of broadcast rights.

The key, Sperko says, is getting your movie positioned high among new titles in the VOD provider's library. Movie choices that buyers browse first are likelier to be purchased. Major studios in effect buy that positioning, through marketing campaigns attracting customers to the VOD site.

Debuting day-and-date with theaters is what VOD providers want, and will reward with extra exposure.

"Of course, theaters don't like that because they want people in the seats," Sperko said. "The VOD carriers want it, and since they're the bigger source of revenue, you do it."

Exactly how much revenue is part of this distribution trend that Hollywood hasn't figured out. There isn't a universal system yet to measure sales and define success or failure, as box office charts do for ticket sales. Sperko doesn't know yet how Among Ravens is faring as a VOD release.

"We really don't get any hints," Sperko said. "We don't get reports on the number of downloads, etc., until 60 days after the (fiscal) quarter ends, in September.

"The only way we can tell how the film is doing is by watching the audience reviews and seeing what happens on our Facebook page."

It's still early in the trend, with issues to solve and people to convince. More studios will need to follow the Weinstein Co.'s lead in closing the 16-week window between theater runs and home video release. At some point the National Association of Theater Owners will roundly protest the encroachment on their previously exclusive rights by default to new movies.

No matter, the transformation of VOD from cinematic dumping ground into a prime entertainment source for moviegoers is taking shape. And the major studios know it.

"Hollywood's going to have no choice," Sperko said. "Other than the studio blockbusters, it's the future."

Contact Steve Persall at persall@tampabay.com or (727) 893-8365. Follow @StevePersall.

VOD turning into prime entertainment source for moviegoers 08/14/14 [Last modified: Thursday, August 14, 2014 11:54am]

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