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Topic: The Window Closes Some More

Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 05-01-2014 06:16 PM

quote: Terry Lynn-Stevens
the movies that people will just not see in the theatre, the term "That looks like a rental" comes to mind, where a 17 day window might work is for these movies, we want to watch Draft Day, Grand Hotel, Night Train, Book Thief and a bunch of others but we will not watch them in a theatre. We might pay $4 or $5 for a digital rental at 17 days, if not we will have to wait till RedBox as we won't be waiting 4 months and using iTunes and we sure as hell won't be buying any of these when they are released on home video.

But even if you have to wait the standard 3 or 4 months you'll still see them, right? So what's the difference to the studio in waiting? They'll get more boxoffice $ out of the theaters and won't lose anything in video sales.

Try to keep in mind that you are not the only moviegoer in the world. Just because you do something a certain way doesn't mean everybody on the planet does it the same way.

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Justin Hamaker
Film God

Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004

posted 05-01-2014 06:45 PM

Terry, the problem with your point of view - as viewed from an exhibition stand point - is you would minimize theatres to just a small handful of movies per year which really NEED to be seen on the big screen. For many people there is a certain urgency to seeing movies while they are in theatres, and part of that is not having to wait a few months to rent the DVD.

Yes, there will be people who turn up for any movie, even if it's available to download/stream. However, if the window gets too small then you risk reducing the number to a point where theatres simply can't survive. Despite the misconception created by ticket and snack prices, many movie theatres survive on very small margins. Cutting into those margins by even a small amount could result in smaller theatres going out of business.

This is an issue that has to be looked at from the perspective of the big picture, rather than how it might fit into your individual viewing habits.

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Terry Lynn-Stevens
Phenomenal Film Handler

Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012

posted 05-01-2014 07:03 PM

quote: Martin McCaffery
I think the studios figure if they release the video as close as possible to the peak of the theatre viewing wave, they get the biggest bang for their buck by capitalizing off of the word of mouth and all of the advertising they threw into promoting the theatrical release. If they were to wait a year, the "heat" will have cooled, people will have forgotten and a newer shinier movie will be eating up all of the oxygen.

You hit the nail on the head. I think this is exactly the case. Get the most of the movie at its peak value, most of all marketing budgets for movie is spent for the theatrical run. Squeeze out the second run/close em down and the studios serve up a quicker release on digital minus the second/sub run cut.

quote: Justin Hamaker
However, if the window gets too small then you risk reducing the number to a point where theatres simply can't survive.

Justin, what can't survive individual theatres or the chains or both?

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Jack Ondracek
Film God

Posts: 2348
From: Port Orchard, WA, USA
Registered: Oct 2002

posted 05-01-2014 07:51 PM

Can't say how thrilled I am to have spent more on new projectors than my whole place cost me to buy, just to keep these guys going just a little longer.

Gad!

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Justin Hamaker
Film God

Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004

posted 05-01-2014 08:55 PM

Terry, I suspect that most theatres which are not in major markets would struggle to survive if this plan goes into effect. I don't know the finances for every theatre/chain, so I can't give you a precise number. But I know many theatres survive on small margins and could not afford to lose as much as 25% of their business. And theatres which normally play 3-4 weeks off the break would probably be looking at 50-75% loss of business.

Regardless of your personal preferences, if you like going to the movie theatre even a couple times a year, this is a bad idea.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 05-01-2014 11:20 PM

quote: Martin McCaffery
I think the studios figure if they release the video as close as possible to the peak of the theatre viewing wave, they get the biggest bang for their buck by capitalizing off of the word of mouth and all of the advertising they threw into promoting the theatrical release. If they were to wait a year, the "heat" will have cooled, people will have forgotten and a newer shinier movie will be eating up all of the oxygen.

You're right, that's exactly what they're thinking. But they also think if they close the video window, that ALL (or 98% or whatever) of the moviegoers will still go to the theaters to see the movie. Which some will, but many won't. The "won't" number is the big mysterious one.

The other problem is the movies these days are so forgettable. People bought Disney's classic movies in droves when they came out on video because they were good, not because Disney did a huge marketing campaign for them.

And yet another problem is nowadays the DVD business is in the toilet. I don't quite get how the studios figure they can recoup all that lost revenue by blowing up the engine that pulls the train -- but that's what they want to do.

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Terry Lynn-Stevens
Phenomenal Film Handler

Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012

posted 05-02-2014 02:11 AM

quote: Justin Hamaker
Terry, I suspect that most theatres which are not in major markets would struggle to survive if this plan goes into effect. I don't know the finances for every theatre/chain, so I can't give you a precise number. But I know many theatres survive on small margins and could not afford to lose as much as 25% of their business. And theatres which normally play 3-4 weeks off the break would probably be looking at 50-75% loss of business.

How do you feel the major chains will do in major markets during the the first three weeks?

I have no doubt that the sub run operators will be forced to close if this happens.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 05-02-2014 12:11 PM

I guess we should all be glad that Jeff Katzenberg isn't really a decision maker when it comes to distribution. I suppose if Dreamworks wants to try his 17 day model on their next animated must-see blockbuster like "The Croods 2" or "Shark Tale 2" they can go ahead -- but they'll laugh out the other side of their face when most of the theaters refuse to play the movie and they have a $1.5 million opening weekend instead of a $25 million one.

A lot of these studio guys like to predict the future, but it almost never happens the way they think it will. I still remember some guy from Disney saying they would NEVER sully their classic animated movies by releasing them on video tape. They will be released in theaters every seven years, he said, because that's how they were meant to be seen.

quote: Justin Hamaker
I know many theatres survive on small margins and could not afford to lose as much as 25% of their business.

I have a feeling MOST theaters survive on small margins. I know ours does. The chains are all public companies, arent't they? I wonder how the stockholders would react if they saw a 25% reduction in their revenue chainwide?

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Scott Jentsch
Phenomenal Film Handler

Posts: 1061
From: New Berlin, WI, USA
Registered: Apr 2003

posted 05-02-2014 05:26 PM

quote: Justin Hamaker
If studios can actually enhance demand by maintaining, or lengthening the video window. What I mean is that if any movie is available at any time, it removes demand resulting for scarcity. It gives people permission to put it off until some later date because they know they can watch it at any time. But having a delay before it's available on video creates a sense of urgency where people need to see it while in theatres, or they will have to wait to see it. And then a video release creates a new push where people are reminded of something they wanted to see.

This is one of the most well-worded and logical arguments I have seen on this issue.

A 3-week window is far too small in order for a movie to have maximum return in theaters and then maximum return on home video. I think a very large number of people would be very happy to wait three weeks to see a movie at home/on their portable device and skip the theatrical experience altogether.

I've been a bit of a doomsayer in the past on this issue, but it's not because I want to see the doom come to fruition. I just think that eventually, the studios are going to figure out a model that cuts out the theatrical release that they think will work. The dogs are continually barking at the door.

The best defense for movie theaters is to deliver the best experience possible. Theaters gain when they realize greater business from increased customer satisfaction. The best way to show the studios that they are wrong about closing the window is to make as much money for them as possible in the theatrical market. Better revenue for studios heads off any such talk of closing the window further from becoming serious in their meetings.

Doing nothing to make the moviegoing experience the best it can be is the worst possible scenario for everyone involved.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 05-02-2014 05:30 PM

quote: Scott Jentsch
I just think that eventually, the studios are going to figure out a model that cuts out the theatrical release that they think will work. The dogs are continually barking at the door.

Unless that whole automatically-counting-eyeballs thing comes to pass, I don't see how they can ever figure out a "model" that will bring them as much money PLUS the staggering amount of promotion value that a successful theatrical run brings.

I think we will see a constant stream of idiotic "tests" that fail to work and they'll keep going back to doing what they've done for decades, which is chip away at the theater industry, since they can't seem to figure out a way to bomb it out of existence.

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Justin Hamaker
Film God

Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004

posted 05-08-2014 01:07 AM

I do think there is one point which should give theatres some optimism. Regal, AMC, and Cinemark control a very large percentage of the movie screens in the US. If these companies refuse to play movies slated for this 3 week window, it will force the studios to reconsider or risk losing a very significant chunk of the movie theatre revenue.

The unknown variable is how a big budget movie would fair as a video only release. Given death of brick and mortar video stores, and the lack of high speed broadband in many parts of the country, I just can't see the studios wanting to risk a $200 million production by cutting out the traditional movie theatre launch.

I also worry about how pirating might become an even larger issue. Having the content available to virtually any digital device will create essentially unlimited opportunities to capture the content and put it out on the net. At least with theatres the content is fairly secure and early pirates are often limited to lower quality camcorder captures. Even if high quality pirates become available later, there will have been significant numbers of people who have already paid to see the movie.

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Terry Lynn-Stevens
Phenomenal Film Handler

Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012

posted 05-08-2014 12:58 PM

quote: Justin Hamaker
If these companies refuse to play movies slated for this 3 week window, it will force the studios to reconsider or risk losing a very significant chunk of the movie theatre revenue

I agree, the chains combined all should have the power to block a 3 week window. The chains should also have the power to block ultra-wide releases and put a demand on seat counts should they not?

However, the physical DVD/BR market while still huge, is decreasing each year and will continue to decrease while online consumption is increasing each year and will continue to increase. The way I see it, the studios are thinking they will likely have better sales for the online segment (because of maximum exposure)the closer the VOD release is to the time a film starts dying off at the theatre. The theatres 4th-6th week cut of the box office is what is at stake.

I think we will see:

Theatrical window
Online rental window (week 4) (iTunes, Amazon)
Blu-ray/DVD release window (3-6 months later) for hardcore collectors

Redbox will be force out of their business by that point.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 05-08-2014 03:18 PM

quote: Terry Lynn-Stevens
The chains should also have the power to block ultra-wide releases and put a demand on seat counts should they not?

The chains don't want to block ultra-wide releases. Ultra-wide releases are the reason megaplexes exist. As for the seat count issue, chains (and everybody) has to play ball in some form with the studios since they are the supplier of the product. Guaranteeing them a certain number of seats is just one piece of the negotiating puzzle.

There is a lot more than the 4-6 week theatrical take at stake. As has already been pointed out by me and others, there is a huge group of people who don't care where they see a movie, they just want to see it, and while they don't necessarily want to wait 4 months for video, they might not mind waiting 3 weeks and will go for the cheapest solution they can, so the theatrical market will be cut out of that piece of the market. I'll bet it would be at least 20% of the ticket sales, depending on the movie. If it's a kids movie, probably even higher.

To me the scariest part of the whole thing is, not everyone will know about it right away. So, the theatrical gross won't be affected "that much" by the first few tries. So they'll think it doesn't hurt a thing, expand the program and by the time real damage is being done it will be too late.

There is NO way the studios will ever match the amount of money this way that they bring in with a theatrical release, thanks to piracy, multiple people viewing the same video, and the loss of the huge promotional value a theatrical release provides. Unless they do something with that counting-eyeballs thing, and then they'll probably try to raise the price to near-theatrical levels and turn people off that way.

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Carsten Kurz
Film God

Posts: 4340
From: Cologne, NRW, Germany
Registered: Aug 2009

posted 05-08-2014 03:23 PM

quote:
As I've said before, the studios consider the theatrical release advertising for the DVD. They should pay us to run them;>

Oh, but they DO pay us. They are NOT taking 100% of the ticket, do they?

- Carsten

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Timothy Eiler
Expert Film Handler

Posts: 126
From: Litchfield , Minnesota, USA
Registered: Mar 2000

posted 05-15-2014 02:15 PM

quote: Carsten Kurz
Oh, but they DO pay us. They are NOT taking 100% of the ticket, do they?

Sometimes that take more than 100% of the boxoffice Last summer The earliest i could get Man of Steel was 4 weeks off the break. Stupid me took it and that was the first movies in years that didn't take in enough money in the boxoffice to pay the minimum

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