Some rare insights into how VOD and electronic sell-through (EST) revenues benefit from a ‘day-and-date’ (D&D) DVD release environment have been afforded by Warner Bros.In the opening keynote at the Screen Digest PEVE Digital Entertainment conference in London, Jim Wuthrich, president of International Home Video and Digital at Warner Brothers Home Entertainment, revealed that the studio’s top VOD title last year was Gran Torino, which bought in $60m from on-demand and EST against a total box office take of $148m.
Two years ago, Warner began releasing its films on Blu-ray Disc, DVD, VOD and EST on the same day. At the time, it said that margins from D&D VOD were between 60-70%, compared with 20-30% for optical discs, and that controlled trials of D&D showed practically no effect on DVD sales.
The studio is now forecasting that global digital spend (i.e. VOD plus EST) will grow by 19% in 2010 to reach $2.5bn, with EST accounting for $900m of the total.
The Warner experience shows that studios are gradually becoming more comfortable with the digital rental and sell-through of movies. This is part of a wider phenomenon to do with the overall shrinking of video release windows.
D&D release also helps to reduce the incentive for piracy. Given digital’s higher margins and a possible reduction in piracy losses, any resulting drop in Warner’s physical media sell-through and rental business caused by collapsing the windows may be worth putting up with.