Time Warner’s CEO Dick Parsons said today that his company’s movie studios will debut download-to-burn movies next year, marking a big step in the evolution of home video distribution. Speaking at Credit Suisse’s Media and Telecom Week conference, Parsons said “I think you’ll see us move to some kind of download to burn next year,” adding that this development is a win-win-win.
It’s a win for studios because they can cut down on the distribution costs of DVDs, it’s a win for retailers because they will be able to sell more product and it’s a win for consumers because they’ll be able to purchase what they want and the way they want it, Parsons said.
More intriguingly, Parsons hinted at some kind of possible arrangement where films are distributed over the Internet on a subscription basis through Time Warner’s HBO arm. Although he carefully avoided specifics, Parsons said “we’re looking at ways of working with studios where you can have some kind of subscription distribution format” of movies over the Internet because as it stands today, “essentially HBO has all those rights” to digital distribution of movies.
Hmm…not sure what he means, but it’s not likely that HBO has the Internet distribution rights to films produced by other studios. In any event, it’s an intriguing possibility, one that might also yield substantial incremental revenues if customers were also given the option of burning to DVD the films distributed over this subscription channel. (Imagine watching a film on HBO and being given the option to immediately buy the film for, say, an incremental $5 to $10. You can’t do that today, but you could do something like this on the Internet.)
Regarding the ouster of AOL’s Jon Miller, Parsons praised the departed executive as “a good strong guy who stabilized that operation.” Nonetheless, it’s clear that he thinks Randy Falco, Miller’s replacement, is a better fit for the company. “We needed a leader who could bring superior execution…we were also looking for somebody who was our kind of guy…Somebody who could sit on our team,” Parsons said. “I think based on what I know about Randy you’ve got a winner here.”
Time Warner’s cable business is in superior shape, Parsons said, with little to fear from telco competition. In a sly gambit, Parsons damned with feint praise Verizon and AT&T for their “rational” behavior in those markets where the telcos have launched video services over upgraded plant.
The rational behavior that Parsons refers to are the price increases implemented by Verizon in certain markets where it has launched its FiOS TV service. “Are the phone companies really going to make the kind of investment that’s required to stay competitive?,” Parsons asked. “The answer is I don’t know.”
“Where they have done so, they’re behaving rationally. They just raised the prices. They’re seeking to get some return on that investment which means they’re pricing north of where the cable market is.”
Cynthia Brumfield at 3:11 PM|Comments(0)
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