Editor ©RapidTVNews | 25-09-2011

Premium VOD (pVOD), the controversial on demand movie concept that has stirred opposition from directors and cinemas, is struggling because its price is ‘awfully high’, its leading proponent has conceded.

DirecTV was the first provider to offer a pVOD service in the US, immediately attracting the ire of not only US cinema owners but also Hollywood’s leading directors who have regarded 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 as likely to 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.

Speaking to financial news outlet Bloomberg, DirecTV Chief Executive Officer Michael White said that two months into offering premium VOD, demand has been “small” because of an “awfully high” price tag of $29.99 per film. Yet White was very clear as to why this was the case. “They’re priced too high for consumers,” he told Bloomberg. “We didn’t choose that price, but that’s where the studios forced us to be.”

Comcast and DISH Network have also been rumoured to launch a pVOD offering but since the initial controversy was caused the latter has launched its Blockbuster Mobile Pass OTT service.