3 Reasons Why Comcast's $60 Movies Will Fail

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There's just no way that this ends well for Comcast (NAS: CMCSK) .

The country's largest cable provider is trying to mess with theatrical release windows, offering a movie as a video-on-demand offering just three weeks after it debuts on the silver screen.

This may seem like a compelling move, but did I mention that Comcast somehow expects couch potatoes to fork over $59.99 for the movie?

Comcast is testing the premium rentals in Atlanta and Portland, Ore. The first movie on tap will be next month's Tower Heist starring Eddie Murphy and Ben Stiller. You know this is a bad idea. I know this is a bad idea. However, for the sake of any believers out there, let's go over the three biggest reasons why this will fail.

1. The price is ridiculous
DIRECTV
(NYS: DTV) has been testing a similar Home Premiere service that aims to jump in with pricey rentals while the reels are still warm. DIRECTV charges $30 for movies that hit theaters 60 days earlier. The DIRECTV model is arguably bad, but who will pay $60 for a video rental? A night at the movies for a family of four won't even get that costly -- and I'm throwing in a generous tub of popcorn.

2. Three weeks is too late
If this service was being offered during a film's opening weekend, I could see some folks figuring that it's better to stay at home than to fight for elbow room in a crowded movie theater. However, there aren't too many movies playing to sellout crowds three weeks into their cinematic runs.

3. Studio promotion won't be there
If you're not familiar with celluloid's release windows, a movie will naturally hit the local multiplex for a few weeks. A stint at second-run "dollar" cinemas may follow. The retail DVD and Blu-ray releases come a few months later. In the case of discounted DVD rentals, Coinstar's (NAS: CSTR) Redbox and Netflix (NAS: NFLX) have deals in place to hold back on flicks from some studios until 28 days after the retail release. Premium movie channels and then general television broadcasts follow.

The problem with that three-week cooling off period is that movie studios traditionally only shell out marketing dollars leading up to a movie's release and then again a few months later when the lucrative DVD release comes around. Studios won't be actively promoting movies that are three weeks stale, leaving Comcast on its own to promote its insanely priced $60 movies.

Along the way, Comcast is making exhibitors angry for a product that movie buffs will ridicule. It's a lose-lose proposition.

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At the time this article was published Motley Fool newsletter services have recommended buying shares of Coinstar and Netflix. Motley Fool newsletter services have recommended creating a bear put spread position in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Netflix. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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