Starz! CEO John J. Sie Predicts Movies Will Premiere on Cable, Satellite

Advent of HDTV, Broadband VOD Platform, Compelling Economics Will Drive Studios to Show Films First in the Home Before Theatrical Release Home Debut Could Generate First-Day Revenues of $200 Million per Film Within Next Decade

20-Apr-04

Starz Encore Group Chairman, Founder, and CEO John J. Sie recently predicted that movies will regularly premiere on cable and satellite, rather than in theaters within the next ten years. Sie told the Harvard Business School Media Conference that the widespread adoption of high-definition television sets by consumers and ubiquitous deployment of VOD platforms enable millions of Americans to have a theater-like experience in their homes, and that the economics of the movie business will drive studios to make use of this audience to debut their films.ìLast year, the theatrical screenings of films generated about $5 billion in revenue for the studios,î Sie told members at the conference, ìcompared with $4 billion from cable and satellite. Clearly we are rapidly approaching the tipping point where it will make more sense for studios to release their films first on cable and satellite, and later in the theaters.î Releasing a film on satellite and cable can save millions in distribution costs, Sie pointed out. ìAnd the economics are irresistible.î Sie noted that there are about 5 million HD capable sets in the United States today. In the next decade, that figure will likely rise to 50 million or about 50-percent of US television households.ìIf a major studio can debut a film at a price of $19.95 (about what it costs two people to go to the theater) and attract 20-percent of HD homes to watch, that would generate $200 million in revenue on the opening day, a blockbuster number in anybody's book,î he said. Sie did not forecast the demise of the movie theater. ìMillions of Americans still love the experience of getting out of the house and going to a theater and always will,î he said. ìBut in the future, big films will debut in the home and create the buzz for their theatrical releases, rather than the other way around.îSie, a 30-year veteran of the cable and satellite business, has played a key role in many television breakthroughs, including two-way cable, the packaging of multiple premium networks, the digital standard for HDTV, and multiplexed thematic premium television channels.For further information, please visit www.starz.com.

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