The CEO of EzyFlix.tv has welcomed moves to reduce the prices of buying some movies online by 2O%-25% but argues prices should be even cheaper.
“The Hollywood studios’ wholesale pricing strategies for EST (electronic sell through) are out of date,” says Craig White, whose VoD and download-to-own service launched last year.
“They were first set when iTunes launched in 2008 and were largely based on the relative DVD pricing at that time. To reward digital ownership and further stimulate growth over transaction or subscription video on demand, EST pricing to consumers on all AAA box-office new release titles should at the very least be sub-$20."
Earlier this month Roadshow Entertainment announced it would reduce the VoD and EST prices on some titles, starting with The Expendables 3. The widely-pirated title will be available to rent from December 11 through sites such as Google Play and iTunes for $4.99, down from the standard $5.99, and to buy for $15.99, reduced from $19.99.
Roadshow Entertainment MD Chris Chard told BRW, “We always think the Australian digital market is a couple of years behind the US in regards to consumer take up. So are we doing everything we can to make sure the Australian consumer is encouraged to buy digital, particularly in that rental space.”
Chard said the decision on when to reduce prices would depend on the costs of acquiring rights and getting a return on that investment.
Since then Roadshow has informed digital platforms that it is cutting the VoD and EST prices of more than a dozen titles due for release from January through May.
They include The Giver, The Immigrant and The Equalizer (January), The Judge and A Walk Among Tombstones (February) and The Best of Me and John Wick (March). For example, The Giver, The Immigrant and The Equalizer will cost $17.99 to buy in SD and $19.99 in HD, with The Judge at $19.99 and $24.99.
White argues that a further recalibrating of EST pricing would ensure Australians are able to buy movies digitally on par with consumers in the US and the UK, and reflect the drop in DVD prices since 2008.
The Australian EST market was worth $143.6 million in 2013, evenly divided between film and TV content, up 22% on the prior year, according to the Australian Home Entertainment Distributors Association.
White forecasts that market segment will double in the next five years, citing PwC‘s Entertainment and Media Outlook 2014-2018.