In Demand Gets Sony Films for VOD

Cable World, Sept 3, 2001 by Andrea Figler

Disney may go `own' way

Sony's Columbia TriStar--a studio that resisted cable video-on-demand distribution for years--finally agreed to distribute its Hollywood films for VOD via In Demand last week, marking a major turnaround for content availability for cable.

Starting this week, consumers with VOD services from cable operators affiliated with In Demand will be able to order top Columbia films such as The Wedding Planner.

"We are encouraged by the news of Sony's participation, having historically been one of the more notorious withholders of content," said David Lee Smith, an analyst with Dain Rauscher Wessels, in a research report.

The deal is similar to a recent agreement with Vivendi's Universal Pictures, in which Universal takes 60% of the revenue per VOD sale, Smith said. The agreement allows In Demand to offer top movies 45 days after they go into video rental chains at about $3.95 a pop, Smith said. Older films from the studio's library, however, will not be included in this deal.

"We expect both Disney and Fox to unveil their VOD plans in the near future, involving both cable and IP delivery," he added.

A source at Walt Disney Corp. said the studio was planning to announce its "own" video-on-demand initiative any day now. The source would not disclose details about the initiative, but indicated the company would take its own direction rather than work with cable operators or any other major Hollywood studios directly. Earlier press reports said Disney might team up with 20th Century Fox as previously reported. Calls to Fox were not returned before press time.

Disney could very well offer its movies via both cable and the Internet. While agreeing to work with In Demand to distribute VOD via cable, Vivendi also joined a group of major Hollywood studios to form an Internet video-on-demand venture last month. Paramount Pictures, Metro Goldwyn Mayer, Warner Bros. and Sony Pictures Entertainment all agreed to work with Universal to deliver movies via the Internet in order to assure the studios would not lose money from piracy or file-sharing programs.

In Demand spokesman Joe Boyle explains that studios have been focusing on Internet delivery defensively.