Reel Blog

Establishing a price point without customers

The Wrap details some of the options theater owners have in response to shortening the theatrical release window for “premium” video on demand.

What stands out for me, amidst the arguments pro and con and the throat-clearing before the main event, is the remarkable logic behind this:

Curiously, the distribution executive TheWrap spoke to Tuesday doesn’t seem to have big hopes that the new window will be wildly profitable for the studios.

He said the main goal of the initiative is to “re-establish” the $30 price point for home viewing in the mind of the film-consuming public — a price point that used to exist with DVD, the executive added, before operators like Netflix and Redbox came in and started offering a “smorgasbord” of content for well under $10.

“The value of content, to me, can easily be re-established by creating this premium window,” the executive said. “Whether or not people buy the films for $30 is not important. What is important is that it puts the price at $30 for a viewing.”

How, exactly, does one establish a price point at a price that customers show no signs of being willing to pay?