On-demand movies to premiere on cable

Cable operators who long for exclusive offers of new films with video-on-demand are getting their wish, sort of.

In a VOD milestone, a large producer of made-for-TV movies — RHI Entertainment — today will unveil a slate of 24 productions to premiere on VOD through mid-2008.

The films, made for about $3 million apiece, won't be blockbusters. Stars of the science-fiction, action-drama and women-in-jeopardy stories will include Judd Nelson, Gary Busey and Marilu Henner.

"We're trying to put something unique in the VOD world," says RHI Entertainment CEO Robert Halmi Jr. They'll stand out because cable currently "gets the worst product" from Hollywood.

That's a sore point for cable. Comcast, for one, wants VOD release of theatrical movies the same day they open in multiplexes — charging consumers as much as $50 per VOD showing.

Hollywood has resisted; it doesn't want to anger theater owners. Many independent films, however, open in theaters and on VOD simultaneously.

IFC Films, owned by Cablevision's Rainbow Media, releases about two movies a month that way, for about $5 per showing. They do it because films such as The Wind That Shakes the Barley, a Golden Palm winner at the 2006 Cannes Film Festival, "would never have been seen in Dubuque, Des Moines, St. Louis and Minneapolis had it not been for VOD," Rainbow CEO Joshua Sapan says.

Operators have kept quiet about deals with RHI. Time Warner Cable offered some of its movies in April. Cablevision and Bright House started last month.

Cox will start in September. Halmi expects to have Comcast, the biggest, and others signed by the end of the year.

A selling point: RHI movies are in high-definition as well as standard. "We currently offer high-definition movies in about half of our systems and plan to roll out high-def to all in the next month or so," says Bob Nocera, Cox Communications' marketing head for new video services. High-definition films from RHI "will help us to bolster that assortment."

About 30 million cable subscribers get VOD, and Halmi expects as many as 400,000 to view each film in its 90-day run. Prices vary by system, but typically are about $4 (split by RHI and the operator) for unlimited viewing for 72 hours.

"Television is financed today as a number of small sales all over the world," Halmi says. "Any time we can find a revenue stream that makes up 10% (of the budget) or greater, that's a great thing. We really think VOD can be one of those."

After the VOD run, RHI's films will sell on iTunes, then show on cable's SciFi Channel, Spike and Lifetime. That will be followed by DVDs, ad-supported streams on www.rhitv.com, broadcasts on ION Television and foreign sales.

"There'll be three versions of the films," Halmi says. For VOD and DVD, "it's more of an R-rated version," although films won't be officially classified by the movie industry board that rates theatrical films.

Halmi adds: "There's a version for U.S. broadcast, which is much softer. And there's an even softer version for international TV. They like sex and hate violence. Here, we hate sex and like violence."