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News Analysis
TV Tech: The Biggest Flop of 2011?

By Swanni

Washington, D.C. (August 14, 2011) -- In a year in which the economy has taken a number of dips, it's not surprising that it's been a rough seven months for the TV technology sector. For instance:

* Sales of 3D TVs (and 3D theatrical movies) have actually declined from their anemic first year numbers;

* Cable and satellite TV services have lost subscribers in record numbers;

* The number of retail video stores has shrunk further despite Dish Network's rescue of one-time industry giant Blockbuster Video.

* Noting stagnant TV sales and other problems, CE giant Best Buy has reported declining profits for two straight financial quarters.

Yeah, it's been a bad year so far for a lot of folks. Lots of failures; lots of flops.

But in my humble opinion, the biggest flop of 2011 has been DIRECTV's $30 Video on Demand service, called Home Premiere.

The controversial service charges $30 per viewing of movies made available 60 days after their theatrical release and at least one month before their DVD or Blu-ray launch. Prior to Home Premiere's launch on DIRECTV, several Hollywood studios suggested it could be a game changer, eventually leading to moviegoers being able to watch new films at home on the same day they are released in theaters.

Industry publications and the mainstream media echoed this theme, quoting theater owners who threatened to pull certain movies from their theaters if the studios didn't back down. And the hysteria rose when reports surfaced that Comcast and online VOD service Vudu, owned by Wal-Mart, were getting ready to launch Home Premiere soon after DIRECTV's debut.

But nearly five months later, Comcast and Vudu have yet to add Home Premiere to their VOD lineups -- and DIRECTV often doesn't even list a Home Premiere selection in its VOD menu. And when the satcaster does offer a $30 VOD movie, it doesn't even promote it on its VOD Home Page.

Clearly, DIRECTV subscribers have decided that $30 is too much to watch any film, much less one that will be released on Blu-ray or $4.99 VOD in just a month. And it's equally clear that DIRECTV has decided that $30 VOD is a loser, or else the satcaster would be trying to promote it rather than all-but-burying it.

Of course, this is not very surprising. I predicted last spring that the concept was doomed because of the exorbitant price tag. (And I should note that other industry observers forecast the same.)

But if you could time tunnel back to the spring and listen to the many industry "experts" who said this would be the beginning of the end of the movie theater, well, you would be reminded how often a new product is over-hyped.

My new prediction is that the studios and DIRECTV will take a breather this fall and bring back Home Premiere in 2012 with a new price tag ($20) and a new window (30 days after a movie's theatrical debut). The buy rates will rise a bit, but trust me, it will have little impact still on theatrical sales.

Until the studios decide to go all in -- and offer movies at home on the same day as their theatrical debut (and close to the same price) -- Home Premiere will flop.

And in 2011, it's the industry's biggest flop of all.

Swanni is Phillip Swann, president and publisher of TVPredictions.com. He has been quoted in dozens of publications and broadcast outlets, including CNN, Fox News, Inside Edition, The New York Times, The Washington Post, The Chicago Tribune, The Financial Times, The Associated Press and The Hollywood Reporter. He can be reached at swann@tvpredictions.com or at 703-505-3064.

Click TVPredictions.com to read more news and features on TV technology. 

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