Speaking during an investor conference call, Jeff Bewkes, Time Warner’s CEO, said the company’s Warner Bros. studio will now release movies to the Apple TV and other video-on-demand systems on the same day they are released on DVD. The New York Times reports Warner Bros. has been testing the new approach in recent months, and found that DVD rentals only fell by 3-5 percent. Meanwhile sales of DVDs actually increased, possibly due to the increased promotion. Bewkes went on to say that the shift to digital distribution on “day and date” of DVD release will eliminate some manufacturing and distributing costs, and be beneficial to the company. “Taking a customer and moving that person over from rental-physical [to] VOD day-and-date is like a 60 to 70 percent margin instead of a 20 to 30,” Bewkes said. “So it’s about a three-to-one trade.”
Speaking separately in an interview, Warner Bros. home video president Kevin Tsujihara commented on the current restrictions of the DRM found on digital video rentals, such as the 24-hour viewing window. Tsujihara said the rules were built into complex contracts, but admitted that if Time Warner wants the higher margins from video-on-demand, it will need to ensure the rules for a digital rental are at least as lenient as a physical rental.
