Starz Hopes iTunes Movie Deal Adds To Small, But Growing VOD Revenue
Most people may know the Starz brand for its multiplex premium channels. That’s Starz Entertainment. But sibling Starz Media also is in the movie programming and distribution biz with Overture Films, Anchor Bay Entertainment, and Manga Entertainment, a mix of original and library films, many available on Playstation. Xbox/Zune and Amazon, but not for rental on iTunes until today. Timed to coincide with the VOD window opening for Sundance Film Festival nominee Sunshine Cleaning, iTunes is now offering a starter pack of the Starz titles for download-to-own and rental. The eclectic mix includes recent theatrical and direct-to-video titles, among them Rob Zombie’s The Haunted World of El Superbeasto, classic horror film The Hills Have Eyes, and anime movies, including two Hellboy titles.
TV programming from Starz Entertainment has been on iTunes for a year. When I asked Marc DeBevoise, Starz Media SVP of digital media, business development and strategy, why the movies took so long, he said, “It’s the perfect timing for us because we’re really starting to hit on all cylinders with them.” Starz Media launched its first iPhone game last week: Pandorum, linked to this week’s release of Overture’s movie by the same name. There’s a lite version, but the full game produced with developer Artificial Life (OTCBB: ALIF), runs $3.99—adding to the mix of money Starz can make through iTunes.
At Starz Digital Media, the online services are part of a broader VOD category that includes cable, satellite and telcos. It’s all based on the window and, he said, “They’re all treated essentially the same.” For instance, Sunshine Cleaning came out on DVD and EST Aug. 25 23 (the company provided the wrong release date initially); the VOD window opens 29 days later. The biggest difference: the internet distributors can offer electronic sell thru (EST). That’s why you can buy the movie on iTunes but not rent it yet.
Even added together, DeBevoise admits, it’s still a small stream relative to the other ways Starz makes money from movies like theatrical release or subscription video. But it’s a growing stream, “It’s a small, but fast-growing business,” he said, with 100 percent-plus increases every year for the past three years. (A feat that gets harder to duplicate as the numbers get larger.) It helps that digital has a high-profit margin. The category as a whole isn’t double digits in terms of revenue for Starz yet but DeBevoise says profit and cash flow are more meaningful indicators given the high margins—and by those indicators, it’s doing well.
Posted In: E-Commerce, Entertainment, Movies, DVD, Companies, Apple, marc debevoise, starz media
