M+E Daily

Video On Demand Gets Its Day: Studios, Cable Companies In $30M Ad Campaign

Hollywood kept the video on demand business at bay for years while consumers built their DVD libraries. Now a consortium of studios is teaming with the nation’s largest cable companies to reintroduce the VOD concept to households.

The companies’ $30 million TV, print and online campaign — themed “The Video Store Just Moved In” — will tout the convenience of the platform, as well as the day-and-date availability of many films on VOD and DVD. The campaign runs through early June.

Coming from the cable industry, the campaign naturally makes no mention of the Internet VOD services offered by Netflix, Vudu, and others have already moved into many living rooms, via Net-connected videogame consoles and set-tops.

For studios, cable VOD transactions carry significantly higher profits than both the new streaming services and traditional disc rentals. The New York Times reports that studios keep as much as 65 cents of every dollar that cable subscribers spend on VOD, compared to the 25 cents studios earn on every dollar consumers spend on movie rentals via Blockbuster.

Yet VOD rentals accounted for less than two percent of the industry’s $53 billion in video revenue last year, according to analyst SNL Kagan (via the LA Times). Despite increasingly broad movie availability — and now, greater marketing support — cable VOD services still suffer from kludgy consumer interfaces, the LA Times report notes.

Cable operators participating in the new campaign include Armstrong, Bend Broadband, Bright House Networks, iO TV, Comcast, Cox, Insight and Time Warner Cable. Studios include 20th Century Fox, Focus Features, Lionsgate, Rogue, Sony Pictures Entertainment, Summit Entertainment, Universal Pictures, and Warner Bros Entertainment. More details in the release via Business Wire.