Sony Pictures, Warner Bros. and Walt Disney Co. are in talks with the largest cable TV systems to offer films for as much as $30 per showing soon after they run in theaters.
The studios are talking with In Demand, a partnership of Cox Communications Inc., Comcast Corp. and Time Warner Cable Inc., Bob Benya, chief executive officer of In Demand, said in an interview. Disney is also discussing streaming films on Web-linked devices such as Microsoft Corp.’s Xbox console and Sony Corp.’s PlayStation 3, people with knowledge of the talks said.
Hollywood studios have been looking for ways to generate additional sales from movies as DVD purchases decline. A so-called “premium” service would let consumers see movies on TV without waiting as long as the typical three to four months for DVDs or cable companies’ $4 or so on-demand showings.
“There are a number of other products that we will be able to create through Internet-connected television, particularly when you consider our brand focus,” Robert Iger, CEO of Burbank, California-based Disney said at a Goldman Sachs Group Inc. conference on Sept. 21.
Sony Corp. tested the market with users of its Bravia TV by offering the Will Smith movie “Hancock” in 2008 and the animated film “Cloudy with a Chance of Meatballs” in 2009 for $24.95. The Tokyo-based owner of Sony Pictures hasn’t announced plans for another movie through its TV sets.
Time Warner Inc. Chief Financial Officer John Martin told the Goldman Sachs conference in New York last week that the company’s Warner Bros. studio expects to begin tests on the service later this year. He said he expected the offering to be priced at $20 to $30 per viewing.
The studios’ plans may meet resistance from theater chains, which have raised concerns about cannibalizing ticket sales by shortening the exclusive 120-day theatrical “window” exhibitors have for a typical release.
“Any promotion, advertising, marketing or testing of premium VOD needs to be done within the existing in-home window time frame,” the National Association of Theatre Owners, a Washington-based industry group, said in a June statement on its website.
Disney is likely to test consumer interest in the first quarter using a single film, said one of the people, who requested anonymity because the decisions are pending. The company hasn’t decided on pricing or how long to wait after theatrical release, the person said. Jonathan Friedland, a Disney spokesman, declined to comment on the plan.
Patrick Seybold, a spokesman for Sony’s PlayStation network, declined to comment, as did Jim Kennedy, a spokesman for Sony’s film division. An outside public relations representative for Redmond, Washington-based Microsoft didn’t respond.
Disney, the world’s largest media company, fell 29 cents to $33.29 at 4 p.m. in New York Stock Exchange composite trading. New York-based Time Warner fell 45 cents to $30.92 and Sony’s U.S. traded shares slumped 14 cents to $30.86.
Time Warner Cable, also based in New York, rose 6 cents to $53.17, and Philadelphia-based Comcast, the largest U.S. cable system, declined 26 cents to $18.31 on the Nasdaq Stock Market.