Video services

SureWest to Mix VoD With DVD Sales

5:15 PM -- Just as Netflix Inc. (Nasdaq: NFLX) looks to split its video streaming and DVD businesses, SureWest Communications (Nasdaq: SURW) is getting ready to mix DVD sales with its video-on-demand (VoD) platform in Kansas City. (See Netflix Does the Splits .)

SureWest will start off by pitching six new Warner Bros. Entertainment Inc. titles on DVD and Blu-ray (Arthur, Hall Pass, Something Borrowed, Sucker Punch, Red Riding Hood and Unknown) directly to customers who can also get them on the service provider's VoD service.

Does this idea stand much of a chance of being successful? When was the last time you wanted to buy a DVD after you just paid to watch it on VoD?

The idea of combining VoD with DVD sales, though new for SureWest, has been tried before, and it wasn't exactly a hit.

Cablevision Systems Corp. (NYSE: CVC) and Popcorn Home Entertainment gave it a shot in 2008, whereby Popcorn sent the physical DVD directly to customers after they ordered the movie from the MSO's VoD service for $9.95 to $19.95, plus shipping, depending on the age of the title. Cablevision confirmed that the DVD purchase capability was shut down a while ago. And a visit to the URL Popcorn Home Entertainment was using in 2008 (www.popcorntv.com) suggests that the company is no longer with us, either. (See Cablevision VOD Gets Physical.)

So, SureWest, which is the first operator to deploy SeaChange International Inc. (Nasdaq: SEAC)'s Watch & Buy app, doesn't exactly have history on its side.

But it'll likely have access to more content down the road. The initial focus of Watch & Buy is on new releases, but "[u]ltimately, we have access to the full Warner Bros. film library," SeaChange says.

Title quality will of course play a role here, but how successful SureWest is will also hinge on how it executes. SureWest initially will charge for VoD and purchases separately, but the operator can configure it so the price of the VoD rental could be applied toward the purchase of the DVD.

Maybe SureWest wants to see how well it can do by first selling DVD titles for full price, but I imagine customers might be tempted a bit more if the price on the VoD rental was akin to a down payment for the DVD.

Business models aside, the concept of mingling DVD sales with VoD rentals is probably due for another go, but I think this idea will stand a much better chance once it gets buy-in from many more top studios.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Pete Baldwin 12/5/2012 | 4:53:17 PM
re: SureWest to Mix VoD With DVD Sales

You know, i've always wondered the ownership of DVDs in general. I own a couple and have almost never watched them.

I mean, how many times are you really going to watch a movie?  Yet some people buy these things by the dozens. Do they just sit on the shelf like ornaments?

paolo.franzoi 12/5/2012 | 4:53:16 PM
re: SureWest to Mix VoD With DVD Sales

To me the "extra features" are the bit that you get with the DVD and nowhere else.  Some DVDs are great with it (alternate endings, cast/crew commentary, director's cut).  Others blow chunks.




AESerm 12/5/2012 | 4:53:16 PM
re: SureWest to Mix VoD With DVD Sales

Kids love watching movies over and over and over ad nauseum.

Pete Baldwin 12/5/2012 | 4:53:15 PM
re: SureWest to Mix VoD With DVD Sales

Well, that's true, about extra features. I guess sometimes there are more extra features than there is movie, not even counting the commentary version.

jtombes -- you're certainly right about kids! but that doesn't account for most of the DVD collections out there. Some people (including friends of mine) are just movie geeks, obviously - but the question still remains: how many viewings do you get out of these things? Some movies, like Lord of the Rings... that, I can understand.  Something like "Hall Pass" -- that's a little harder to understand.

(Caveat: I haven't seen Hall Pass and don't even remember seeing ads for it. It could be the greatest movie of all time! but, judging from the picture we use in the story, i'm doubting that...)

Jeff Baumgartner 12/5/2012 | 4:53:14 PM
re: SureWest to Mix VoD With DVD Sales

Kids titles definitely dominate our DVD library, so that's a good point. However, it's been the rare occasion when I've watched a movie on VoD and followed up by purchasing the DVD when a kid's title wasn't involved. Last one I remember doing VoD+DVD purchase was for Watchmen, just because I knew I'd watch it a few times and wanted it in my permanent library.  Again, a rarity for me.

But that seems to go against the grain of the research we've heard regarding VoD movies offered in the DVD window... the MSOs and the studios have long-claimed that titles offered on-demand the same day they are made available on DVD don't cannibalize DVD sales.  But I wonder about that. JB

Digit 12/5/2012 | 4:53:14 PM
re: SureWest to Mix VoD With DVD Sales

Disc sales still outpace VOD and OTT at around $40B global, and sell-through revenue eclipses rentals in most regions.  jtomes has it right, this will be big for children’s titles and cult classics.  Since the Netflix/Qwikster split is jacking the DVD prices for those who want to own the physical media, this will give consumers a new choice with even more convenience. 

This sounds a bit different than the Popcorn model, where Cablevision was using the hard media purchase to close the day-and-date window.&nbsp; Not as much of an issue in today&rsquo;s digital distribution world.&nbsp; Looks like SureWest wants to tap into that additional revenue stream.&nbsp; Why does the Mid-West always seem to get the cool new features 1<sup>st</sup>?

DCITDave 12/5/2012 | 4:53:12 PM
re: SureWest to Mix VoD With DVD Sales

They should take the idea a step further and market it directly to parents of young kids. Instant gratification (VOD) + multiple viewings at no charge (DVD) for one low price.

My family alone has given so much money to Pixar, Warner Bros. and Sony they should each name a wing of their HQ after me.


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