Monday, April 4, 2011

How soon before we watch first run movies at home?

Hollywood studios make films that are first distributed to movie theaters, followed by cable on demand, DVD release, pay TV and free TV.  The system is designed so that those who have the highest demand to see a film pay a premium for seeing it sooner than others, whereas the more patient can wait a few months and get a much lower price. 

In the not too distant future, we will have enough digital bandwidth to allow direct downloads from servers at movie studios to homes.  Won't this then spell the end of the movie theater?  The Economist magazine has an interesting assessment of where the movie industry is going in terms of product distribution.  Expect studios to shorten the traditional four month window between initial release to movie theaters and wider release via cable on demand.  Movies may be available within two months after their release, but the rate will be much higher than $3.95.  However, the full cost for a family to attend a movie can easily exceed $60 once one accounts for family size, cokes and snacks, and babysitters.

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