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Old 03-02-2012, 02:19 AM   #1727  
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Kevin Tsujihara: Discs Key to Driving UltraViolet Adoption
29 Feb, 2012
By: Erik Gruenwedel


Tsujihara said consumer appetite for Warner movies continues to escalate. There were 1.3 billion paid transactions of Warner content (theatrical and home entertainment) in 2006 compared to 2 billion transactions in 2011.

“We don’t have a demand issue; it’s really an innovation challenge,” he said.

Tsujihara said the rollout of UV is driven by the current status of the three primary business models in home entertainment — subscription (by-mail and SVOD), rental (video store, kiosks and VOD) and sellthrough. All three generate revenue for Warner. It’s the margins that keep studio executives up at night.

Indeed, a transactional VOD rental is seven times more profitable to Warner than a kiosk or rental subscription; and a sellthrough transaction is 20 to 30 times more profitable than a kiosk or rental subscription, according to Tsujihara.

“We’re fine with low prices for consumers and there’s absolutely a place in the ecosystem for discount kiosks (like Redbox) but it is not day-and-date with sellthrough,” he said. “We think we can meet consumer needs while maintaining sound economics by creating the right release window.”
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