• by Wayne Friedman , October 12, 2011

Traditional movie distributors still carry a lot of weight -- even if movie studios are still suffering from lower home entertainment revenue.

Universal Studios has pulled back on its "premium video-on-demand" plan to air its movie "Tower Heist" in consumers' homes some three weeks after opening theatrically on Nov. 4th. The retail price for the VOD show was $59.99.

A number of angry theater chain owners, including big owner Cinemark, said they would not run the movie in their movie theaters if the plan went ahead. Many believed the new home entertainment window could cut into their box-office sales.

Universal Studios was planning to make the film available early on select Comcast systems in Atlanta, Georgia and Portland, Ore. Comcast is the majority owner of Universal Studios.

Universal resisted theater owners efforts -- until Wednesday. That's when National Amusements theater chain also threatened to make the same move. Later that day, Universal said it was stopping its premium VOD effort.

In a statement from the National Association of Theatre Owners, John Fithian, president/chief executive officer, said:

"NATO would like to thank Universal for responding to various theater owners' concerns and canceling the PVOD test it was contemplating. They have been engaged with individual exhibitors on this test, and while it was something that many theater owners could not ultimately support, the open and collaborative nature of the dialogue is appreciated."

"NATO recognizes that studios need to find new models and opportunities in the home market, and looks forward to distributors and exhibitors working together for their mutual benefit."

After massively declining home entertainment revenues from DVD sales and rentals, many studios have turned to alternative home entertainment revenue, specifically many digital efforts. Universal believed premium VOD business customers would not come from theater owners'  traditional theatrical customers, who are mostly from a younger demographic.

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