Lionsgate won't lead on new VOD film windows

Vice chair predicts studios to offer premium windows next year

NEW YORK -- Lionsgate won't take the lead on a new premium VOD film release window, vice chairman Michael Burns said here Thursday.

"I don't think we'll be the leader in that," he told the Goldman Sachs Communacopia conference.

Walt Disney is a more likely leader in this field, which studios have been exploring as of late, given that it is a proposition that is most attractive to families, therefore making family fare providers likely early adopters.

Studios are looking at making movies available in homes within 30-60 days of their theatrical release for a premium price.

Burns said if a studio charged $50, families with all their kids and even neighbors could watch together to amortize the cost.

He predicted first studio forays into that new window in the next year.

Among Lionsgate film product, Burns mentioned to the Goldman audience the recent success of "The Expendables" and said: "I'm sure there's going to be another one." Sylvester Stallone has also signaled an interest in a sequel.

Heading into awards season, he also highlighted "Buried," starring Ryan Reynolds as a U.S contractor buried alive in a coffin after an attack by a group of Iraqis, as a possible contender for honors.

Burns told investors Thursday that Lionsgate remains happy with its strategy of making DVD releases available to DVD kiosk operator Redbox day-and-date.

After all, Burns said the studio still hasn't seen any cannibalization of its DVD sales from Redbox.

"I wish they would all go to the 28 days" window that several studios have instituted, so that Lionsgate could have the day-and-date Redbox space to itself, he said about his peers.

He also argued that Lionsgate's Redbox approach allows it to participate in a broader industry trend. High-end content "has turned into an impulse buy," he argued, pointing to Redbox and growth in cable VOD as evidence. VOD revenue used to bring in about 1% of box office revenue, but now can bring in 10%-15% on some movies, Burns reported.

Finally, he also mentioned that average Redbox rentals are starting to trend longer these days. "It looks like it's getting closer to three days," Burns said.

On the day that video rental giant Blockbuster made its bankruptcy filing official, Burns said there are "a lot of advantages to the way Redbox is structured," citing that studios don't get any revenue cut from Blockbuster rentals after 180 days.

The Lionsgate top executive also said he will be interested to see how Blockbuster reemerges from bankruptcy. Especially in a weak economy, "I think the rental business is a good business," Burns said.
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