Early Home Video Access for the 1% Crowd — Without the Industry Angst

Flush with cash from Trump’s tax cut, the ultra-wealthy can now access new-release theatrical releases in the home — for $1,500 to $3,000 a title.

Upstart Red Carpet Films has entered the controversial premium video-on-demand market offering consumers willing to pay almost anything to rent (for 36 hours) Shazam! or Godzilla: King of the Monsters day-and-date with their theatrical debut.

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Studios such as Warner Bros., Paramount Pictures, Lionsgate, Disney’s 20thCentury Fox and Fox Searchlight, among others, are on board the concept that requires consumers submit to a background check and purchase a $15,000 set-top box rigged with anti-piracy controls.

Disney (a big proponent of the 90-day theatrical window), Sony Pictures and Universal Pictures are not on board. Exhibitors apparently remain unconcerned about the targeted demo.

Fred Rosen

The brainchild of Fred Rosen, founder of Ticketmaster and Dan Fellman, who retired from Warner Bros. in 2015 after a 40-year career in distribution, Red Carpet Films claims it can deliver studios about $300 million in incremental revenue from as few as 4,000 wealthy customers.

Investment firm Charles Schwab considers anyone in possession of at least $2.4 million in net value wealthy. Nationwide, households earning at least $390,000 annually are considered to be in the 1% of earners. That requisite figure increases significantly in 12 states, including Connecticut, California, New York, and Texas.

“Every product I can think of has a luxury version, which got me thinking … why not movies?” Rosen told The New York Times.

It’s not an original business model. Best Buy in 2013 toyed with a business (CinemaNow) that charged consumers $500 for early home video access, in addition to related equipment charges.

Recently, Screening Room (from Napster founder Sean Parker) promised early in-home access (priced from $30) despite exhibitor pushback. Universal, in 2011, tried offering actioner Tower Heist early in the home – a strategy that was quickly shelved when exhibitors refused to carry the movie.

Of course, Netflix has long pushed in-home access to its original movies concurrent with any theatrical screenings.

While Lionsgate chairman Michael Burns promised studios would embrace premium VOD last year – a movement pushed as well by former Warner Bros. chairman Kevin Tsujihara – the concept now appears DOA.

Dan Fellman

Fellman says Red Carpet has worked with studios instead of placing demands.

“They appreciated that,” he said. “What doesn’t work in Hollywood is going in and wagging a finger and saying, ‘This is how it’s going to be.’”