ROW8 Puts a New Twist on Movie Rentals — 30 Minutes to Change Your Mind

It’s movie night, and I’m stressing out.

There are 52 content tiles on the Roku TV in my living room, and each one is a rabbit hole of still more options. Netflix, HBO, Prime Video and Tubi have a thousand-plus movie titles each, and I count at least six apps for renting or buying movies.

ROW8, which launched last year and announced distribution deals in June with Paramount, Sony, Universal and Warner Bros., has made some deliberate choices in its product offering and user experience to cut down on the 7.4 minutes that the average U.S. consumer takes to decide what to watch, according to Nielsen’s recent quarterly survey:

• The TV interface, which is available for Roku and Samsung, is built around a single row of 20 or so new-release titles.
• Selecting a title gives you three options — watch the trailer, save for later, or rent it.
• If you don’t like the movie within the first 30 minutes, you can switch to another one.

“We designed ROW8 around the idea of big movies and the idea that the service is like the theatrical experience where you’re choosing from the newest titles,” says ROW8 CEO John Calkins. “We think that helps with decision-making and conveying the sense that the service is delivering a movie-going experience.”

John Calkins spoke with Decider to talk about ROW8’s approach to movie rentals and the service’s plans for the rest of 2019.

DECIDER: Apple, Amazon, FandangoNOW, Google Play and Vudu all have movie rentals. Why get into such a mature market?

JOHN CALKINS: I would push back on the notion that this is a mature market. The transactional business — non-subscription, non-advertising-supported — is seeing significant growth. Why is that? The physical business is dropping like a stone, and the cable and satellite businesses are under a lot of pressure from cord-cutting, but one-quarter of U.S. households rent or purchase a digital title at least once a month.

And you see a continuing demand for that space between the theatrical release and when a film becomes available on HBO or Netflix?

Consumers are very interested in new-release Hollywood titles. If a studio spends $100 million to market a theatrical film, there will be huge consumer awareness for a film that won’t pop up in subscription services until six months or longer after the theatrical release. Transactional is very much a growth category where we can innovate.

The subscription business is growing faster than transactional. Do you still see plenty of room for growth for the transactional business?

Yes. The subscription business has been growing 20 percent to 25 percent a year, and I think you’re going to see that slow to something closer to 10 percent growth. Those services are driven by exclusivity. Netflix won’t have Disney titles, and Disney’s service won’t have Warner titles. All of those films — aside from films developed exclusively for those services — will be available on transactional services.

You announced studio deals in June with Paramount, Sony, Universal and Warner Bros. That’s roughly half the 2018 theatrical market. Do you expect to add Disney and Fox soon?

I’m sure our four partners don’t need another article pointing out that they’re only half the market. [Laughs.] Disney has been busy integrating its acquisition of Fox, and we’ll continue having discussions with them.

Do you have some indie distributors on board?

Kino Lorber is a great indie partner for us, and we have a number of foreign distributors. We’re definitely interested in partnering with studios like STX Entertainment, Lionsgate and A24.

Movies Anywhere is a great service for aggregating movies that consumers have bought across different services. Is that part of your roadmap?

We’re going to add ownership of movies to our lineup later this year, and Movies Anywhere is a great ownership product that we’d love to work towards.

What platforms have you launched?

We’re on Roku, Samsung, iOS, Android and web browsers. We’ll be on Android TV soon.

After you rent a movie on ROW8, how do you switch to another title?

When you’re watching a movie from a web browser and hit stop, that’ll take you back to the title’s details page that — as long as you’re within the first 30 minutes of a movie — lets you swap it for another movie.

If you’re watching a movie on the Roku or Samsung app, do you have to go back to the browser to switch to another movie?

Right now, you can stop the movie on the TV app and switch to another movie from your browser. We’re working to add swapping directly on the TV app in the next few months.

What do your studio partners think about the idea of ROW8 having an exchange policy?

ROW8 is paying for both movies when a consumer makes an exchange, so the studios don’t have any risk from the exchange policy. And there’s no public awareness of what films are getting exchanged more than others, so the studios weren’t concerned from that perspective.

What percentage of your transactions are actually exchanging for another movie?

We’re not providing that information, but it’s at the lower end of what you might expect. The feature tests well with consumers as a point of differentiation, but people are generally pretty good at picking the movies they want to see.

Are you incorporating any of that information into what movies you recommend? Do you drop a movie down the list if it’s getting returned at a high rate?

We’re not doing that yet. We’re emphasizing the titles that we think are the best, but those algorithmic things will come over time as we get scale and volume.

ROW8 does not make in-app purchases available on the iPhone and iPad app. Did you make that decision because of the Apple tax?

Yes. That 30 percent tax that Apple charges is a lot to carry, and it’s probably impeding consumer opportunities.

Is that why you’re not on Amazon yet?

Right. We’re thinking about it maybe as a playback-only app, but we have to weigh that against developing more features on the other platforms.

Will you add TV episodes at some point, or do you view that as a different business?

I think we’ll stay out of that. There’s a ton of great TV and a lot of energy in TV, but there’s less interest in that for transactional.

Plus, the user interface gets really noisy when you add TV.

We talk a lot internally about the paradox of choice — that the more you have available to you, the harder it is to choose something. You can spend 15 minutes on Netflix and not figure out what to watch. We’ll stick with movies for the foreseeable future.

PlutoTV and Tubi both offer ad-supported movies on demand, and both services are growing. How hard are you looking at that model?

For transactional, 80 percent of the business is new releases, and 20 percent is catalog movies. If you move into that catalog space, you’re looking at a different business model. The trigger for us to go into ad-supported or even subscription would be if we see our movie customers identify a particular genre where we could build a targeted offering.

Steve Jobs talked a lot about making choices in product design, and you’re definitely making some choices about what to put in and what to leave out.

That’s certainly reflective of what we’ve done to date. We’ve looked at TV shows and business models and platforms, and we’re trying to stay focused.

Who would the buyer be for a company like ROW8? A subscription service that wants to add a transactional component?

We don’t talk much about making an exit, but I think it would more likely be a company adjacent to the transactional space. That could be a physical retailer or exhibitor going to digital or maybe an international company that wants to have a U.S. presence. Honestly, the story for ROW8 is growth. We think much more about capturing more occasions from a core group of consumers — and maybe that means adding AVOD or SVOD components — than making an exit.

Scott Porch writes about the TV business for Decider and is a contributing writer for Playboy. You can follow him on Twitter @ScottPorch.