Consumers will eventually pay less for entertainment streamed to smaller devices, with studios and distributors basing prices on the size of the destination device, movie mogul Jeffrey Katzenberg predicted today.
A tiered pricing market, in which people paid less to see a movie on a cell phone than a theater, would result in greater consumption in developing markets where people depend more on their mobile devices for entertainment, the DreamWorks Animation SKG chief executive said today at the Founders Forum conference on digital media in Los Angeles.
"People will pay by the square inch," Katzenberg said, according to a Bloomberg account. "If a cell phone version is 75 cents, you'll get 350 million people in India to pay that."
The new pricing model could help increase video distribution sales in the international market, where revenue dwarfs sales in the U.S. and Canada by a 2-to-1 margin. Box office receipts in the U.S. and Canada totaled $10.2 billion in 2011, while international sales brought in $22.4 billion, according to the Motion Picture Association of America (PDF). The MPAA recognizes the importance of the international market, where the industry's percentage of revenue has steadily increased over the past four years.
The studios are moving toward new revenue streams, even at the cost of alienating traditional money makers. Katzenberg's DreamWorks signed a licensing deal in 2011 to provide movies and specials to Netflix, replacing a less lucrative deal with HBO. The deal was billed as the first time a studio chose Web streaming over pay TV.