Internet Delivery Now Streeting With Traditional Home Video

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Jonathan Handel’s blog alerted me to the pending “day and date” release of the “The Bourne Ultimatum” on both DVD and via Internet delivery on December 18th. As Handel and the LA Times report, this will be the first day and date release of a motion picture on video in both Internet/electronic media and physical media. Usually (if there is such a thing given the pace of things now), electronic delivery of a motion picture streets with the pay-per-view or pay-TV windows.

Simultaneous Internet/Home Video release dates are consistent with current deal terms and those of older vintage that producers and distributors routinely negotiate for home video rights on motion pictures. The difference now is the form of delivery; physical media vs. electronic media. Although the revenue splits on existing deals might get tricky depending on the terms negotiated, the business is already acclimated to evolving home video revenue structures having moved from the traditional royalty formula to revenue sharing. While Handel correctly raises the prospect of brick and mortar retailer resistance, I suspect the issue of greater impact will come from producers, actors, financiers and other profit participants on motion pictures. Once they become aware of the more favorable cost differential between video tape manufacturing costs and broadband delivery they will expect a payment structure that accounts for the savings much as the WGA is demanding now.

  • It seems to be, if I understand this….is that the entire industry is becoming used to what will be the same industry….going vertical, as they say in other industries. Yes?

  • It seems to be, if I understand this….is that the entire industry is becoming used to what will be the same industry….going vertical, as they say in other industries. Yes?

  • there is a parallel in the music biz. Recording artists want to have digital revenue treated as licensing revenue instead of royalty income. The latter is typically paid out at the artist’s royalty rate and subject to the various recoupments associated with a record deal. However, most artist deals have provisions that have a 50/50 split on licensing revenue. This type of revenue may not even be subject to recoupment.

    The Artist’s case is based on the fact that labels “license” their content to services like iTunes. But this is really just semantics. Still, the distinction has real fiscal impact to both labels and artists alike.

    This is why I am very interested to see how the issue of internet income is resolved in both the WGA strike and with simulataneous releases such as “The Bourne Ultimatum.”

  • there is a parallel in the music biz. Recording artists want to have digital revenue treated as licensing revenue instead of royalty income. The latter is typically paid out at the artist’s royalty rate and subject to the various recoupments associated with a record deal. However, most artist deals have provisions that have a 50/50 split on licensing revenue. This type of revenue may not even be subject to recoupment.

    The Artist’s case is based on the fact that labels “license” their content to services like iTunes. But this is really just semantics. Still, the distinction has real fiscal impact to both labels and artists alike.

    This is why I am very interested to see how the issue of internet income is resolved in both the WGA strike and with simulataneous releases such as “The Bourne Ultimatum.”

  • A-Ha! you’ve earned yourself a new reader! Funny I’m reading ‘getting things done” at the moment (as a download from the library). We’re reading the same blogs, the same books, and apparently the same magazines as well.

  • A-Ha! you’ve earned yourself a new reader! Funny I’m reading ‘getting things done” at the moment (as a download from the library). We’re reading the same blogs, the same books, and apparently the same magazines as well.