Hollywood Horror Flick Gets Wide Release on Apple Devices

Hollywood’s latest horror flick, “Haunting Melissa,” opens today on the small screen.

Hooked Digital Media, distributor of the film, said it’s making the movie available through an application on Apple Inc. (AAP)’s tablets and smartphones and giving a new twist to how stories are told by offering users the chance to download the title one segment at a time for just a few minutes’ viewing.

While the app for “Haunting Melissa,” a ghost story, is free on Apple’s App Store, users who want to progress after the first installment must either share their experience on Facebook Inc. (FB) for more free episodes or pay as much as $1.99 for each segment, or $6.99 for the full film.

The venture is the latest attempt by studios and content providers to snag viewers who are increasingly watching movies and TV shows on mobile devices. Hollywood studios, grappling with a decline in home video sales, which can account for 40 percent of a title’s total receipts, are signing online streaming services like Netflix Inc. (NFLX) and Amazon.com Inc. as distributors.

“The way stories are consumed has changed, so we set out to alter how stories are told,” said Neal Edelstein, founder of Hooked Digital Media, in an interview. “It’s terrifying to studios the drain that these devices have placed on the industry, so we have to find a new way to harness them,” said Edelstein, who was a producer on “Mulholland Drive” and “The Ring” movies.

Scene Edits

The new film cost about $5 million to produce, according to Edelstein. He declined to comment on the number of episodes that will be available or the length of the movie.

Hooked Digital Media’s app enables users to go back to previous installments and see different edits and angles of scenes. It can also send notifications of new content to entice customers to purchase more material, Edelstein said.

Apple’s current direct-to-iTunes film distribution gives it 30 percent of a film’s revenue, while an additional 15 percent may go to the company that formats the title for playback on Apple devices.

Apple’s iTunes store also offers traditional television and movie downloads for between $1.99 and $19.99.

Ted Miller, a spokesman for the Cupertino, California-based company, declined to comment on individual application developers.

Media companies are trying to determine whether the industry is undergoing a change in consumer preference from ownership of movies to rentals, through subscription services and other Web-delivered ventures.

Walt Disney Co. (DIS)’s ABC this month began testing a service in New York and Philadelphia called Watch ABC, offering live access to network shows on computers and mobile devices.

Netflix, the leading online subscription company, accounted for almost a third of video-viewing on tablets in the U.S. in March, according to researcher NPD Group Inc.

Hooked Digital Media, based in Los Angeles, is working next on a comedy, Edelstein said.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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