The studios' controversial Premium VOD plan is a viable idea, Google reported in its ThinkMovies presentation aimed at the movie industry in West Hollywood on Tuesday.
Based on its analysis of search-engine activity during all phases of a movie's release, Google released a report that said the data "supports the viability of a new 60-day window," which is what several studios have proposed, angering movie exhibitors and prompting talk of reprisals.
The Google report comes a day after Bay Area investment bank Merriman Capital released a contradictory report, indicating that exhibitors will benefit from premium VOD because they'll be able to negotiate better licensing terms for films.
Also read The Premium VOD Battle: Exhibitors Will Win, Investment Bank Says
Google said that its conclusion came after examining data that shows that by 30 days after a film's release, it has earned 85 percent of its total boxoffice gross, "whereas search activity has only reached 77 percent."
A premium VOD release at this point, it concluded, could dissuade 15 percent or more of potential moviegoers to forego seeing the film at the box office.
At the 60-day mark, though, Google says its research shows that fully 97 percent of the film's boxoffice revenue has been earned, while 94 percent of its searches have been conducted.
That remaining six percent of searches, it says, indicate "a high enough level of awareness to introduce the movie on a new format without having to fully invest in a new marketing initiative."
One of the first speakers at the presentation, though, cast some doubt on the studios' proposed $30 price point. In response to a question, John Rose, a senior partner and managing director of the Boston Consulting Group (and one of the three out of nine speakers not employed by Google), predicted that the key to premium VOD success will be finding an appropriate price, and suggested that the proposed price was probably not it.
"I think there is a point at which people will go for it," he said. "But I don't know if the studios will be happy with that point."
Google's "Industry Perspectives and Insights" comes as the company is making a push to partner more aggressively with Hollywood and lure movie advertising dollars.
Here are some other conclusions:
>> Studios are wise to trim their release schedules, and to concentrate on franchise properties, because those films draw a significantly higher volume of searches than other movies.
>> Netflix has become "synonymous with home video," with generic DVD search terms like "new movies on DVD" dropping 45 percent from its peak in 2008, while searches on "Netflix" grew more than 90 percent in both 2009 and 2010.
>> Moviegoers are searching online significantly more often before buying movie tickets, searching almost twice as much per film in 2010 than in 2008 and "demonstrating significantly higher online engagement prior to purchasing a ticket."
>> Searches for generic movie terms grew 22 percent from 2006 to 2009, before hitting a plateau and slumping slightly in 2010. But specific searches for movie trailers grew 51 percent in 2010.
"Consumers," the report says, "are indicating less interest in learning which new movies are available but rather are seeking out specific trailers that have generated buzz."