Citing people familiar with the matter, a Bloomberg report is claiming that leading Hollywood movie studios, including Warner Bros. and Universal Pictures, are in talks with Apple and Comcast on ways to push ahead with the idea of offering digital rentals of films mere weeks after they appear in theaters, even without the approval of theater chains.
The publication notes that after months of negotiations, the two sides have been unable to arrive at a mutually beneficial way to create a $30 to $50 premium movie-download product. With the exception of Walt Disney, all Hollywood studios are eager to introduce a new product to make up for declining sales of DVDs and other home entertainment in the age of Netflix.
Movie studios are also open to sharing a split of the revenue from premium video on demand (PVOD), with the cinema chains if they give their blessing to the concept. However, theater chains have demanded a long-term commitment of as much as 10 years for that revenue split, which the studios have not yet accetpted.
Deals with potential distributors such as Apple and Comcast could be reached as soon as early next year to sell digital downloads of major films as soon as two weeks after they debut in theaters, the people said. Comcast, the largest U.S. cable provider, is also the owner of Universal Pictures.
Unless studios definitively decide against a PVOD window, exhibitor shares will remain under pressure, said Michael Pachter, an analyst at Wedbush Securities Inc. “They can’t recover because there will be the specter that it’s imminent,” he said.
All movie studios and theater chains have negotiated independently because of antitrust rules.