As one of their most lucrative sources of revenue stagnates, several Hollywood studios are considering something that would have been unthinkable even two years ago: renting films to cable subscribers and Internet users on the same day they're released on DVD.
The studios have resisted such a move, fearing that offering a cheap movie rental with the click of a mouse or remote control on the same day as its DVD release would undercut DVD sales. Even worse, such an action could invite retaliation from powerful retailers such as Wal-Mart Stores Inc., the single largest seller of DVDs in the country.
Warner Bros. was the first to change its strategy, saying tests with two cable operators proved fears of "cannibalization" unfounded. Now, Twentieth Century Fox says it will consider releasing certain films simultaneously on DVD and for rental via cable and online.
Walt Disney Co. and Universal Studios, meanwhile, are tinkering with release dates, shortening the period between a film's release on DVD and its availability for rental on cable or the Internet. Disney last year shortened the gap to 15 days from 45 days for selected titles such as "National Treasure 2: Book of Secrets." Universal cut the lag to 29 days from 45 days.
And in an even bigger change, some Hollywood studios now want to open a new "window" -- offering high-definition versions of movies for rental viewing in the home ahead of their DVD release -- if the Federal Communications Commission grants cable and satellite companies permission to block in-home copying.
Such experimentation is part of a series of studio initiatives to pump up revenue from movies after they have left the theater, at a time when double-digit growth of DVD sales has become a thing of the past.
The DVD dramatically altered studio fortunes. Consumers, who in the VHS era primarily rented feature films and limited their purchases to children's classics that could be viewed until the tape broke, rushed to amass DVD film libraries.
DVD sales and rentals account for more than half of a movie's revenue. But the home-video market peaked in 2004 and has declined every year since, according to Adams Media Research. The media analyst projects that revenue will fall $500 million this year to $23.6 billion.
Consequently, Hollywood is looking for the next top home-entertainment model.
"As we've reached maturation in the DVD business, we've got to find ways to grow," said Ron Sanders, president of Warner Home Video.
