No $60 Video Rentals for You

Rick Aristotle Munarriz, The Motley Fool
Updated

Exhibitors: 1, ridiculous Comcast (NAS: CMCSA) (NAS: CMCSK) scheme: 0

Movie theater owners apparently didn't have to protest too hard to get the cable giant to back off of its plan to offer fresh pay-per-views at mind-boggling $59.99 price point.

I had earlier given three reasons why next month's test on offering Tower Heist -- a new comedic action flick starring Eddie Murphy and Ben Stiller -- to Comcast subscribers three weeks after its box office debut wouldn't work:

  • The price is ridiculous.

  • Three weeks is too late -- at that price point.

  • Studio promotion won't be there, since there's no point in throwing more marketing dollars on a movie several weeks into its cinematic run.

A fourth reason killed the silly experiment before Comcast even got to test it out in two cities: Exhibitors threatened a boycott.

Several theater chains -- including Cinemark (NYS: CNK) and Sumner Redstone's National Amusements -- claimed that they would not show the movie in their theaters if Comcast was going to potentially eat into their attendance with the test.

I really can't imagine how Comcast's move made exhibitors feel endangered. Surely they must be self-conscious about their value proposition if they feel that Comcast charging $60 for a rental on a movie that's already been screening for 21 days would eat into their business. Multiplex operators are actually doing Comcast a favor by saving it from embarrassing itself here.

Release windows are changing. Movies are already hitting the DVD market sooner than they did a few years ago. We're also seeing some companies test more sensible offerings. DIRECTV (NAS: DTV) is now offering $30 rentals for movies 60 days after their multiplex debut. Sony's (NYS: SNE) Bad Teacher is available now as a digital purchase, ahead of next week's availability as a digital rental and on DVD.

It's OK to tweak with the model, especially this year where even more screens suiting up to offer premium IMAX (NYS: IMAX) and RealD (NYS: RLD) experiences still hasn't been enough to prevent a dip in box office receipts. However, Comcast just wasn't thinking by exploiting its ownership of Tower Heist studio Universal in its thankfully botched attempt at couch-potato robbery.

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