ANALYST URGES STUDIOS TO STEP UP ELECTRONIC DISTRIBUTION

Making their movies available for sale via digital distribution within two months after they debut in theaters may be the only way studios will be able to stem the flight of moviegoers to cheap rental services like Netflix and Redbox, according to BTIG Research analyst Richard Greenfield. Greenfield, who has previously said that electronic sell-through was a bust, maintained in a letter to clients that it could be successful if it is available at a price of around $20-25 and delivered before physical versions (standard DVD and high-definition Blu-ray Disc) are distributed to retailers. (During a conference call with analysts on Wednesday, Time Warner CEO Jeff Bewkes said that Warner Bros. will begin offering, via cable and the Internet, premium video-on-demand movies 60 days after they are released in theaters.) Greenfield suggests that studios have locked themselves into increasingly outdated planning by focusing their attention on theatrical distribution. “Just think about all the industry excitement surrounding 3D movies being a draw to get consumers to the theaters, yet movie attendance in 2010 (the first ‘big’ year for 3D movies) was actually down 5 percent,” he writes. Greenfield acknowledges that so-called premium on-demand distribution of movies will anger exhibitors. “But who cares?” he asks. “While we do not disagree with the issues raised by the exhibitors, disregarding what consumers want in a period of rapid technological change/development is a recipe for disaster.”