Universal To Distribute Tower Heist Through Video-On-Demand (Updated)

In an surprising announcement, Universal Studios has decided to offer its upcoming Tower Heist through video-on-demand (VOD) three weeks after its November 4th theatrical release date.

On November 25th, Universal will supply Tower Heist at a starting price of sixty dollars to digital cable subscribers of the Comcast Corporation in both Atlanta, Georgia, and Portland, Oregon.

While smaller studios, most notably IFC and Magnolia, have long practiced near-simultaneous theatrical and VOD distribution, Tower Heist will be the highest profile release from a major Hollywood studio to receive such treatment.

Director Brett Ratner's upcoming film is one of the fall season's most anticipated releases: a big-budget action-comedy, Tower Heist features an all-star cast including Ben Stiller (Night at the Museum), Eddie Murphy (Dreamgirls), Alan Alda (The Aviator), Matthew Broderick (Ferris Bueller's Day Off), Casey Affleck (Ocean's Eleven), Téa Leoni (Bad Boys), and Gabourey Sidibe (Precious).

This move is not new to Universal. Last spring, the studio paired with satellite distributor DirecTV to put certain films on VOD sixty days after their initial theatrical release dates.

The strategy behind Tower Heist is controversial. Comcast subscribers will be among the first to experience the film on-demand and as Universal's corporate parent, Comcast stands to gain much potential revenue from VOD sales. In addition, Universal will effectively illustrate a cinematic distribution model without theater chains, one where a film goes straight from a studio to the consumer.

However, Universal has stated that it will reimburse theater exhibitors should the VOD version of Tower Heist hurt projected box office grosses, and the studio will also extend other cable providers in Atlanta and Portland the rights to Tower Heist on-demand under the same terms that Comcast received in order to mitigate claims of favoritism.

Furthermore, Universal's willingness to test the waters in this fashion suggests an awareness of the many issues plaguing certain theatergoers: poor film projection, high ticket and concession prices, inconvenient parking accommodations, and growing instances of cell phone conversations and/or texting during the movie.

Ultimately, if successful, the Tower Heist decision could forever alter the traditional distribution pattern, shrinking the window between theatrical and home theater releases from months to weeks and giving consumers the option to view new Hollywood blockbusters exclusively from their living rooms.

Update: Universal has canceled this VOD release plan.