Report: Premium VOD Likely To Fizzle As Movie Industry Regroups

Movie theaters face a lot of problems but competition from premium VOD probably won’t be one of them, Moody’s Investors Service says in an industry report today. The debt rating company says that studios probably will continue to wait more than four months before offering new films to cable and satellite VOD “because it is in their economic interest to do so.” For example, they depend on theaters to show trailers for the studio’s upcoming films. Also, any decline in box office sales could affect the whole value chain including home video sales and pay TV deals. Theater owners will find little else to cheer in the report. It says that the movie business is “mature and business risks are increasing” as consumers spend more time playing video games and surfing the Web. And 3D “isn’t a cure, although some 3D features will continue to draw crowds at premium prices.” The bottom line: “movie theater owners might need to rethink their longstanding complacency with high debt levels and shareholder-friendly policies to maintain their debt ratings.”

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