Despite the worst fears of cinema owners in the US that they would see traditional audiences lost to premium video on demand (pVOD) services, the TV-based offering has struggled to take off in public consciousness

DirecTV was the first provider to offer a pVOD service in the US, immediately attracting the ire of not only US cinema owner s but also Hollywood’s leading directors who regard the plans of the likes of Warner Brothers, Fox, Sony and NBC Universal to offer films to rent for $29.99 just 60 days after their release in cinemas will undermine the movie industry.

An outraged US National Association of Theatre Owners (NATO) had to officially deny reports that it has told its members to boycott new releases from premium VOD supporters and even at launch industry analysts questioned the financial feasibility of the project.

However initial reports from the US suggest that pVOD is singularly failing to take off as expected. Most worrying for the pVOD industry, new analysis from market analysis and credit rating firm Moody’s Investors Service is suggesting that pVOD is actually detrimental to the industry at large. Indeed the analyst warns the studios of complacency and suggests they rethink their strategies.

In a similar vein, reports in the LA Times confirmed that the consumer response to pVOD was has so far been ‘tepid’.

Speaking anonymously, executives from three pVOD acknowledged to the paper that they were dissatisfied with performance so far, in particular with the marketing efforts made by DirecTV which they believe has hampered take up.

"From this initial test the one result we can be absolutely be sure of is that studios need to take the theatre industry into their confidence and inform them of plans before they implement anything that affects the theatre business," the LA Times quoted Patrick Corcoran, a spokesman for the US National Association of Theatre Owners.