Time Warner to Start Premium Video-On-Demand Service

Time Warner Inc., owner of the Warner Bros. film studio, is near agreements with television distributors to make movies available on-demand for viewing at home soon after they run in theaters.

Time Warner expects to start the so-called premium service in the second quarter, Chief Executive Officer Jeff Bewkes said today on an earnings conference call. The company is close to agreements on the pricing and timing after theatrical release.

Studios including Warner Bros. and Walt Disney Co. are in talks for the VOD service with In Demand, a partnership of Cox Communications Inc., Comcast Corp. and Time Warner Cable Inc., Bob Benya, head of In Demand, said in a September interview. The service would cost as much as $30 per showing. Movies will be available in high definition and eventually in 3-D, Bewkes said today.

Hollywood studios are searching for ways to generate additional movie revenue as DVD purchases decline. A premium service would let consumers watch movies on TV sets without waiting as long as the typical three to four months for DVDs or cable companies’ on-demand showings that cost $4 or so.

In September, Time Warner CFO John Martin said Warner Bros. expects to begin testing a premium video-on-demand window later this year for $20 to $30 per viewing. Analysts including Alan Gould of Evercore Partners have suggested that “Harry Potter” should be the first test film.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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