DirecTV CEO Says $30 Price for Premium Films Is ‘Too High’

DirecTV (DTV) Chief Executive Officer Michael White said demand for films offered for rental just eight weeks after their theatrical release has been “small” because the price of $29.99 per movie is “awfully high.”

DirecTV, the largest U.S. satellite-TV provider, began offering some Hollywood studio films on demand in April for $29.99 after 60 days. Historically, pay-TV providers had waited 90 to 120 days before airing movies on television.

The service is part of an attempt by studios to harness pay-TV as they seek new ways to sell movies and counter shrinking DVD sales. Few customers will purchase the premium rentals unless the quality of the movies improves and the price comes down, White said in an interview.

“They’re priced too high for consumers,” White said. “We didn’t choose that price, but that’s where the studios forced us to be.”

DirecTV Executive Vice President Derek Chang said in April the El Segundo, California-based company would consider renegotiating with studios on price if customers didn’t embrace the service. The early offerings, which have included “Just Go With It” and “The Adjustment Bureau,” have sparked criticism from theater owners, who are concerned they will lose revenue to home-viewers.

Sony Corp. (6758), Universal Pictures, Warner Bros. and Twentieth Century Fox have agreed to release certain films in the early window. Lions Gate Entertainment Corp. will offer the Taylor Lautner film “Abduction” on pay TV three months after its release for $6.99.

DirecTV hasn’t released sales figures for the $29.99 titles. Comcast Corp. (CMCSA) and Dish Network Corp. (DISH) have also said they’ve negotiated with studios for on-demand movies with a shortened window.

DirecTV fell 59 cents, or 1.4 percent, to $41.02 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have risen 2.7 percent this year.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.