Film-Tech Forum ARCHIVE: Iger at it again with Day-and-date DVD

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Posted by Lyle Romer (Member # 1266) on 12-14-2005, 06:36 PM:

This article brings up an interesting question. If the DVD's were available simultaneous with the theatrical release but cost $50 and were not available for rent while in theatres, would exhibitors survive? Under this scenerio, DVD prices would drop after a few months and then be available for rental.

Iger at it again

Thinking Outside the Box Office
By Rick Aristotle Munarriz (TMFBreakerRick)
December 7, 2005

When Disney (NYSE: DIS) CEO Bob Iger argued that the film industry should narrow the gap between the time that a new flick hits the big screen and when it is released on DVD, it obviously didn't make theater owners very happy.

Attendance at the local multiplex has dropped for three straight years, and here was the head honcho of a major Hollywood studio threatening to make the theater owners' lives even more taxing. It was hard enough for them already, with folks building out home theaters with high-definition plasma and LCD wide screens, IMAX (Nasdaq: IMAX) luring popcorn-munchers with their larger-than-life treatments of first-run blockbusters, and the existence of a free market outside of their velvet-curtained walls where soft drinks and popcorn sold for pocket change. How dare Iger suggest that the retail market move to a "day and date release" model, in which a DVD or VHS title hits the shelves just as the same movie makes its box office debut?

The industry's backlash came as expected, and it seemed as if Iger was backing down from his comments made at the company's fiscal fourth-quarter conference call last month. Was the coast clear? Was it all a dream? Perhaps he was just floating a trial balloon to see how quickly the industry would hurl darts at his inflated suggestion.

However, in Monday's edition of The Wall Street Journal, Iger is again discussing the possibilities.

"We'll have a conversation with theater owners to see whether we can move them more peacefully," he was quoted in the interview. "But I think in the end, it's going to have to be more by force than through negotiation or diplomacy."

It's no longer a trial balloon. It's the Hindenberg.

Lights! Camera! Faction!
Iger's reasoning is sound. Why should a movie studio spend money to promote a film during its theatrical run only to have to pitch it again six months later, when it rolls out for the home video market? More and more these days, you see studios using their current-release print ads to advertise upcoming DVDs. It's a waste of money. But it's even worse than just that.

More than 10,000 new DVD titles have been released this year, yet just a little more than 400 of those have been recent theatrical releases. Television shows, direct-to-video ventures, and older flicks have flooded the slate. It's harder for a new DVD to stand out these days. We found that out when both Pixar (Nasdaq: PIXR) and DreamWorks Animation (NYSE: DWA) this year announced higher-than-expected unsold product returns of their latest hits.

That's why Iger is so anxious to strike while the projector's still hot. Would the crowds stay away from the theater this weekend if they could snap up Narnia at a Disney Store? It would likely have a negative impact, sure. However, Disney would probably sell far more copies now with the buzz still reverberating than it would next summer with a second ad campaign.

As long as the movie is fresh, it will be that much more valuable to a consumer and that much more likely to stand out against a crowd of tens of thousands of competing titles. The move would also do wonders in wiping out pirated bootlegs.

Making nice at the multiplex
Elective euthanasia isn't in the cards for the movie theaters. They would put up a fight initially and would probably even refuse to show a renegade picture. They would need to send a message to rival studios that their hallowed aisles are sacred.

But Iger has thought that out, too. One of Disney's ideas was to have movie theaters sell the DVDs. If you caught Narnia and were pumped enough to buy the disc at the theater itself, it would be far more lucrative than the thin slice of box office revenue that movie theaters keep during a film's opening week.

It shouldn't stop there, of course. Theater chains should already be setting up kiosks inside to sell movie-related merchandise. Recently, I took the industry to task for wallowing in self-pity for what has been a self-inflicted wound. Even before audiences started to sour on a night at the movies, the history of the multiplex operators has been filled with bankruptcy reorganizations and sector consolidation, coated with a deep-fried layer of stagnancy. There aren't too many publicly traded chains these days once you get past Carmike (Nasdaq: CKEC) and Regal (NYSE: RGC).

Iger suggests allowing day-and-date releases based on the prospects of DVD sales, and I'll argue that related video games, plush toys, soundtracks, T-shirts, and movie posters should be sold right alongside the flick itself. It's only logical. It's how live theater gets it done. When my wife took my son to see Blue Man Group this past summer, he came back with a CD. And a T-shirt. And a poster. I doubt that he would have bought any of those impulse items a week later. A film house is an experience peddler, and that buzz lasts about as long as it takes for the exit door to swing open.

In-theater merchandising would obviously help the movie studios, too. The chains would have an attractive revenue stream and gain more leverage with the film industry as an outlet for licensed goods, but Hollywood naturally wouldn't mind the merchandising royalties. That's also why the movie studios may have to be the ones to initiate the process. Too many nervous theater operators are too busy sweeping the floor of their nibbled fingernails to innovate. For example, the digital distribution of new films to the movie chains makes perfect fiscal sense, yet it's been a slow adoption process for an industry that won't even bother to rearrange the deck chairs on their sinking ship.

They're just not trying. If you walk into a theater that's offering the same bland ballpark concessions that they have for decades and a few video games out front, please do the industry a favor and vote with your feet. Force the dinosaurs to think outside the box office.

Iger is proposing something radical. The skeleton key to unlock that inevitability may be more radical still, like setting up localized revenue pools where theater operators that do play along with day-and-date releases get to split the pot of territorial merchandising sales. If it's just a matter of greasing the box office split so that it favors the theater owners earlier on, then it's just the movie studios that aren't thinking creatively enough.

The point is that movie theaters don't have to die unless they want to. For investors, there may even be some attractive situations here. IMAX was a Motley Fool Rule Breakers recommendation earlier this year, in part because it is improving the value proposition of first-run releases at its growing chain while giving theater owners a fighting chance with economically feasible retrofits of their existing multiplexes. Content will also be a big winner, and it's why Pixar, DreamWorks Animation, and Time Warner (NYSE: TWX) have all been recommended by the Motley Fool Stock Advisor newsletter service.

Get it together, theater chains, before you too fade to black.

Posted by Steve Scott (Member # 630) on 12-14-2005, 08:10 PM:

Multiplex to Disney: The content of your movies are dwindling & Pixar will leave you soon. We will buy up content specific to our clientel and not your fantasy world.

ps. My patrons still buy VHS in good quantities, so there.

Posted by Bobby Henderson (Member # 840) on 12-14-2005, 08:59 PM:

Hmm. Let's see....Bob Iger doesn't like how new movie release DVDs don't stand out very well against the giant multitude of TV show DVDs, music oriented DVDs and hundreds of older movie DVDs of films that are on average a shit load better than the collective of new movies being released today.

Did I understand that correctly? Okay.

Next step. Bob Iger's solution is to do away with movie release windows, that way those new release DVDs stand out from the crowd of other DVDs better? Right?

Right.

Y'know what that solution sounds like? It sounds like someone who has a corn on his right big toe -and to get rid of it he takes a chainsaw and amputates both of his fucking legs!

Every argument for eliminating the window between theatrical and DVD release is bullshit.

The piracy angle. All the people I know who buy pirated DVDs probably will never be frequent retail DVD customers. Most people I know find it too much of a pain in the ass to copy DVDs. They'll just rent the thing. Or possibly buy it if the movie is really good. They're not going to buy a send up of "The Dukes of Hazzard" or "Bewitched."

The Broadway show tune play with soundtrack CDs on sale in the lobby angle: More bullshit.

Movies and music are completely different things. They are experienced in very different ways. You can drive or work or exercise or screw to music. You can't really do that with a movie. Music can work in the background. Music is portable. Movies aren't really either of those things. They are very different. They have very different marketing needs. I cannot believe Bob Iger is running a major movie distribution company and ignoring that very fundamental product difference. And I do say "ignoring," because how can one manage to become the CEO of Disney and actually get fuzzy on the difference between movies and music?

Then there's all the other angles being played, "yeah, we can even have the video game on sale in the movie theater lobby." Um, news flash. Most video games based on movies suck ass. Why? Because it takes a really long time to develop a good video game. Sometimes it takes more time to develop a really good video game than it does to make a movie.

I will agree with the very basic notion that movie marketing is in dire need of reinvention. Shit, look how many times I've complained about Trajan being used on movie poster titles. I laugh at many movie trailers for the clichéd whooshing sound effects and other editing styles that are now 20 years old!

But killing the very thing that makes a movie a real movie is just fucking stupid.

Bob Iger is worried about new release DVDs not standing out from the crowds of other DVDs? What is he going to do when there are no movie theaters to help differentiate the mediocre on average product? When every movie is just a made for TV movie then those video sales figures are really going to turn to shit.

Posted by Dave Williams (Member # 299) on 12-14-2005, 11:26 PM:

What we do not need is this crap. What we DO need is for operators to give at least half a rats ass about thier product, and let the bottom line slip just a bit in the interest of retaining your friggin customer base!

What do you all think of this idea... Open a small three or four screen theater as a luxury based cinema, where the seating, sound, accomodations, everything, will be of luxurious form, prices will be higher to basically price these roaming pricks that make the experience hell right out of the place, and also offer club seating with concierge service for those that pay an annual fee for access to the private club. Seating will be reserved.

It may not work, however when you ban children from the place, you might just get a few adults who act like adults come on over for some good ol fashioned entertainment and a movie...

Or it could fail. Either way, I know that at least I would pay a higher price to GO TO A FRIGGIN movie and enjoy it. I hate getting stuck at home all the time. However, if things don't improve, I am going to join the many that have already done so and create my own damned home theater.

Ciao

Posted by Daryl C. W. O'Shea (Member # 1303) on 12-14-2005, 11:57 PM:

The Cineplex Odeon Varsity V.I.P. has 4 screens, 137 seats within the same location that has 8 screens, 1944 seats.

They've got ushers, coat check, concierge service and an express concession line once the show has started.

Prices for the V.I.P. auditoriums are $14.95 for everyone, while the other 8 screens are Adult: $11.95, Child: $8.50, Senior: $8.50.

Posted by Mike Blakesley (Member # 26) on 12-15-2005, 02:23 AM:

I was glad when Eisner stepped down at Disney, but now with Iger at the helm, Eisner is starting to look pretty good.

Posted by Bobby Henderson (Member # 840) on 12-15-2005, 12:14 PM:

Iger is simply yet another American CEO who thinks more like a banker or accountant than anything else.

Ask a Japanese or European car company executive what he does for a living: "I make cars."

The American car executive's same response: "I make money."

That's the fundamental problem with what's happening in the movie industry and most other industries in America. We have guys running the show who only think about making short term profits and will do anything to create those profits -even if it means screwing up the product quality or even threatening its very future.

Posted by Scott Jentsch (Member # 1681) on 12-16-2005, 10:25 AM:

quote: Dave Williams
What do you all think of this idea... Open a small three or four screen theater as a luxury based cinema, where the seating, sound, accomodations, everything, will be of luxurious form, prices will be higher to basically price these roaming pricks that make the experience hell right out of the place, and also offer club seating with concierge service for those that pay an annual fee for access to the private club. Seating will be reserved.

Amen! I would go to such a theater!

If anyone is interested, there's a four screen location that has been closed for a couple of years now, that has room for expansion. It's pretty well located in the Milwaukee Metropolitan area and has convenient freeway access.

http://www.bigscreen.com/Marquee.php?theater=MuskegoMovieplex

If I had Mark Cuban's money, I'd give it a shot just to see if it would work. Someone's gotta do something or Iger's dream will be fulfilled without a shot being fired. Theaters who choose to do nothing have no one but themselves to blame.

quote: Dave Williams
However, if things don't improve, I am going to join the many that have already done so and create my own damned home theater.

I highly recommend this course of action! In the absence of the necessary fortitude on the part of theaters to bring showmanship back, it's the best way to experience movies on your own terms.

Fresh popcorn: 50 cents
Your choice of soft drink/beer: 1 dollar
Netflix membership: 10 dollars (per month)

The ability to watch a movie when you want, in a comfortable seat, and with great picture and sound:

Priceless.

If King Kong were available in HD right now, I'd pay upwards of $30-$35 to see it in the comfort of my own home theater. If I was inviting a small group of friends over, it would be worth $50, since we'd still be money ahead in the end.

Theater owners who don't see this as a very real possibility in the very near future are deluding themselves.

Posted by Mike Blakesley (Member # 26) on 12-16-2005, 12:58 PM:

You're missing the point (or what's supposed to be the point, at least) of going out to the movies. It's supposed to be a NIGHT OUT of your house, where you leave your cares outside, and you don't have to pop the popcorn, and you don't have to answer phone calls, and the movie runs without you having to fiddle with it, and you can immerse yourself in the show without interruption with a group of people who experience it on the same emotional level as you.

That's what it is SUPPOSED to be. If it takes "premium priced" theatres to deliver that experience, it'll be a sad day. Movies are really one of the LEAST expensive forms of out-of-home entertainment. The real tragedy is that the public doesn't realize that, in fact they think the opposite.

Posted by Bill Gabel (Member # 1105) on 12-16-2005, 01:09 PM:

Here in NYC, the Ziegfeld Theatre will be charging $12.50 admission for it's one week city exclusive engagement of "The Producers". After that week they will return to the regular admission price of $10.75, when it opens city wide.

Posted by Paul Linfesty (Member # 214) on 12-16-2005, 01:22 PM:

well, it already seems that day-and-date is happening, at least in regards with advertising. It the old days (i.e. - a couple of months ago) Giant TV ads featured the new hot movie out on DVD. But Toshiba (and presumably Universal) couldn't wait. Before King Kong even hit the theatres, they were showing how spectacular the movie would be on their plasma monitors 9photo simulation). I guess the message is, why bother with the rinky-dink theatre presentation when you can watch it at home. (Universal had already announced an April DVD release several weeks before it came out in theatres).

Posted by Matt Fields (Member # 3211) on 12-16-2005, 02:25 PM:

I don't understand why Iger wants people to stop going to see the picture at the theatre, and then paying for it again when it comes out on DVD.

All the people I know that buy a lot of DVD's go to the movies a lot too...

Posted by Dave Williams (Member # 299) on 12-26-2005, 04:56 AM:

quote: Mike Blakesley
If it takes "premium priced" theatres to deliver that experience, it'll be a sad day.

Not necessarily. While I am no longer in the exhibition industry, (something I wish to eliminate in the next few years), where I work now we emphasise "premium price for premium service."

In fact, we charge more for our services than any of our competitors, and our services are not only in high demand, but are the highest rated amongst all our competitors, and we do more business than our competitors.

We achieve this by NOT entering into areas of business that are unprofitable, and instead finding profit where none may have even existed before.

Of course, I cannot say where I work, as this would violate my employer-employee contract of confidentiality, but regardless, I do believe that premium price could save the industry.

The industry also needs a shake up. From both ends, the studio and the exhibitor. The studio needs to learn to make movies for less, requiring thier "stars" to work on points with no guarantees, keeping budgets low, and hiring better writers and directors. Give premium product, and people will return.

Now they also have to learn to take LESS money on the gross. A flat fee with house allowance should be negotiated between the two industries, with a guarantee window depending on projected draw.

The exhibitors need to be held to quality standards with thier new found money and product.

This is a symbiotic relationship, that unfortunately people like Mr Lucas has abused with his 90 percent take crap. It should be a matter of anti trust violations or something!

Then there was the building boom, with all these Venture capitalists and billionaires building three times as many screens as are needed, forcing hollywood to produce three times as many pictures, with two thirds of them total crap.

What we need is a standards and practices for exhibitors, and if it takes it, then a friggin act of congress to force studios to take just half the income with a house allowance for the exhibitor.

HOW HARD IS THIS!!!

Ciao [beer]

Posted by Monte L Fullmer (Member # 2797) on 12-26-2005, 05:13 AM:

quote: Matt Fields
All the people I know that buy a lot of DVD's go to the movies a lot too...

..for people STILL love to get the frik out of the house and be entertained - and they can't REALLY get that with all of the home entertainment gadgetry they can have.

The real experience and thrill is being "at the movies" and watching it on the BIG SCREEN. Plus, they can make a night out of it with dinner before or afterwards.

Also, today's movies are almost geared for the young people, and not to the adults. We've noticed movies mainly containing "boy-girl", "chic fliks" "dumb action movies" and silly "love stories" - all movies that a 5yr old can figure out in 10 minutes. Nothing too big and complicated, but something to get the young people to the GigaPlexes, and then to "Best Buy" for DVD sales when these fliks comes out later on ...

Young people have the "world by the tail" so to say and they want to grab as much of it while it's available. And in doing this is called "spending as much of the moolah as they can."

..a supply and demand situation here...

-Monte

Posted by Louis Bornwasser (Member # 3063) on 12-26-2005, 09:19 AM:

A real genius!!! $50 dvd at the boxoffice? Piracy? Once a theatre bought one, they could copy thousands off of it with really great features. THAT IS PIRACY. Theatre employees could have a really good second income. They would probably work for free.

With friends like these (Iger) we don't need enemies! Louis

Posted by John T. Hendrickson, Jr (Member # 849) on 12-26-2005, 05:46 PM:

I think everyone here is missing the point. Robert Iger doesn't give a wet rat's ass whether the release plays in the theater, on DVD, or a combination of both.

The only thing he cares about is the bottom line. That is, which venue will bring in the most dollars? He doesn't care about presentation, he doesn't care whether you are the greatest projectionist who ever graced a booth, he doesn't care whether you are a theater owner or an usher. He doesn't care whether you care or don't care about the industry. He, like most others out there on the west coast, only cares about what scheme will make the most dollars.

Mike Blaksley, he doesn't give a wit whether you make money in Montana or go belly up. (Personally I hope that doesn't happen)

Dave Williams, he doesn't care whether you go out to pay to see a movie, or pay to stay home. Only that you PAY.

Daryl C. W. O'Shea, he doesn't care whether the price is $14.95, or $11.95, just as long as you PAY.

Bobby Henderson, you are right on the mark when you said:

"We have guys running the show who only think about making short term profits and will do anything to create those profits -even if it means screwing up the product quality or even threatening its very future."

AMEN

Posted by Dave Williams (Member # 299) on 12-27-2005, 09:20 AM:

I never said he cared how I paid. Chill! [beer]

He will care if I stop paying. He will care if we all stop paying. I can find it rather easy to skip his studio and sub studios completely. I can find it rather easy to just catch it on netflix. I can find it rather easy to make sure they don't get my money.

I don't care if he cares. [evil]

As far as I am concerned, he can bite my shiny metal ass! [Eek!]

Ciao

Posted by David Stambaugh (Member # 1102) on 02-17-2006, 10:05 PM:

It might be helpful to read Mark Cuban's own words regarding the moviegoing experience, day-and-date releasing, and more... There are dozens of thoughtful followups to his post if you scroll down.

Looks like this was written around Memorial Day 2005...

=====================================

Movies and Theaters - Let’s make the Customer King and make more money

Fifteen weeks in a row. That’s how many weeks in a row that it looks like admissions to theaters for movies will down. That’s not a streak that theater owners are happy about and rightfully so.

The question of course is why? Is it the quality of the movies? Is it the number of quality movies? Is it the availability of alternatives? Could it be due to a resurgence of broadcast TV with American Idol, CSI, Desperate Housewives, Lost and Grey’s Anatomy bringing in record numbers of aggregate viewers? Could it be that it’s becoming too easy to watch what we want to watch at home because of VOD and PVRs in the home? Are kids, a prime movie going audience staying at home to play video games or hang out online?

Or could it be that the movie industry has oversold the opening weekend of a movie as “must see” event to the point that the movie itself is more often a disappointment than an enjoyable reward?

I don’t know. Yet.

But hey, at least it’s a pleasure to not hear theater owners and the movie industry blame piracy as the cause of the attendance slide.

Let’s take a look at this weekend — Memorial Day Weekend.

Madagascar, < BlogBuzz> a family film, and The Longest Yard,< BlogBuzz> what I call a Top 40 Film. Then there are some limited release films like A League of Ordinary Gentleman (from Magpictures) and BombTheSystem, but neither was released on more than 2 screens. Put another way, there are only two English language films opening on more than 2 screens this weekend! That’s not a lot of movies to choose from if I want to have something cool to talk about at lunch or around the water cooler at work on Monday.

Of course there are continuing runs of movies, 10 or so expensive films, distributed by the Major studios, and another 20 or so shown in limited release. Of those 12, they are usually split up 1/4 (Madagascar, Kicking & Screaming, etc) or so are for family, 1/2 for Top 40 (Unleashed, Longest Yard, House of Wax, Star Wars, Monster in Law) and the rest typically fall in the “I want an Academy Award for Something” category (The Interpreter, Crash, Kingdom of Heaven) for those of us who hope to find a little bit of intellectual stimulation to go with our entertainment.

So on any given night, for whatever category you feel like putting yourself into for that night, you only have 3 or 4 major movies, and unless you live in NY or LA, only 6 or so limited release movies to choose from. Is that enough to always have something that the full range of movie going public wants to see?

That’s not many choices. Not many choices for kids 12 -20 who make up the most active film goers. Not many choices for the rest of the population that goes 1x or less per month.

Then you add the battle you go through of not wanting to fight the crowds and lines and long walk from your parking spot against not wanting to wait so long that you are one of 4 people in the theater when you see the movie, or have listened to everyone at work talk about the movie and spoil it for you.

When there are 40k DVD titles, all the TV shows and Movies we can capture on our PVRs and VOD and PPV, you have to really want to go to the movies.

Which is a very good thing. People really do want to go to the movies. As Jack Valenti eloquently described in a speech to theater owners “what you offer consumers is an epic viewing experience and an alluring social adventure they cannot duplicate in their homes – stadium seating, huge screens ripe with luminance, the sensuality of digital sound, unknown but enthusiastic companions of a single night – all responding to the skills of cinema artists who can make you laugh or cry or hold you in suspense. Even if families in the future are equipped with the latest home-theater magic, it’s just not the same as the emotional alchemy in a theater.”

He is absolutely right. Going to the theater is something that will never be replicated at home. However, unless we give movie goers a reason to go, they won’t.

There are about 175 movies per year that gross $5mm or more. That’s a little more than 3 per week. That ain’t enough. In a world of choice, we have to provide more, and better choices to every demographic who could be a theatrical customer.

What will it take for movie producers to produce more good movies and drive more theater admissions?

There are a couple of issues in trying to get there and they are very straight forward.

First, movie producers need to maximize revenue in every means possible while a film is top of mind. That means being able to sell DVDs, PPV, Pay TV and however else we can generate revenues under the umbrella of a single advertising push. In other words, after spending tens of millions of dollars to get their attention, why not allow consumers to buy the movie how they want it, when they want it, where they want it? That will give movie producers more revenue visibility and return and that will increase the number of movies they make.

Second, movie producers need to do a better job of defining the value of the theatrical experience. Regardless of when a consumer can see a movie, we have already defined the perceived value of waiting 4-6 months for a movie. Basically, its $29.95 retail, $20 dollars at Amazon or less at Best Buy. Then after a couple more months, the price is dropped further to $14.95 or less and a new and enhanced version is released to grab a hgher retail price from hardcore fans.

Why not price a DVD or the PPV at a significant premium for day and date delivery? It’s $29.95 retail if you want to wait 4 to 6 months. If you want to see it the same day its released in theaters, its $39.95 retail. Plus, if we are smart, we will provide a $10 or $15 mail-in rebate against that price if you provide a ticketstub for the movie and a receipt for the PPV or DVD.

Not only does it expand the number of customers who can and will see the movie on opening night, but more importantly, it enhances the perceived value of going to the theater. 10 bucks to get out of the house, 40 bucks to stay home. Of course this won’t make everyone happy. Some people will still think that both options are too expensive. No solution will make everyone happy, but it will expand the number of customers and the revenue base upon release.

The 3rd option is one that movie producers might not like, but needs to happen. Theater owners need to share in the backend of DVD sales and rentals. If the goal is to expand the revenue pie for every film, then as key partners in this effort, theater owners should benefit as well. DVD revenues have already surpassed box office receipts by 2x or more, but at the same time, the number of DVD sales and rental per movie release is dropping versus previous years. Rather than stonewalling each other, everyone will make more money if producers and theater groups work together to increase the pie.

How many DVDs of a title could be sold in theater to viewers who just saw the movie?

How much marketing support could come from DVD retailers and rental outlets to promote both the movie in theaters and for day and date availablity in their stores?

How big an order would retailers and renters place that could be used to expand the marketing for the theatrical release?

How much money will be saved by not having to invest in a 2nd wave of advertising for the DVD release?

Would the net value of all the above be more than 1 pct in incremental revenue and cost savings? And if it is, what would be wrong with sharing 1 pct of DVD sales and rentals with theaters?

If the current box office is $9 billion dollars, and theater owners are netting just a few percentage points of that, then distributing 1% of the estimated $15 billion dollars of current year movie sales and rentals could plow a quick $150 million to the bottom line of theater groups.

It would not only increase theatre level cash flow significantly, but also push up the price of stocks of publicly owned theater groups. As an example, if a group owned 6k out of 36k national screens, 1/6 of $150 million could amount to $25mm dollars. Using Regal Entertainment Group as an example, thats an extra 18 cents per share or double their income from last quarter. That’s nothing to sneeze at.

Of course all of this is easier said then done. I don’t expect the major studios to jump up and down to do this. Nor do I expect Regal or any major theatrical group to take the lead.

I do expect 2929 Entertainment and HDNet Films to take the lead. We will tailor the movies we develop to fit Landmark Theaters customer base. We will work with theater ownership groups, retailers and rental outlets who want to try this experiment to develop programs that expand the pie and create more cash flow for everyone.

I’m sure mistakes will be made along the way. I’m sure that there will be surprises. I’m sure we will have to do quite a bit of adjusting to make the program a win win for all involved.

So what?

If it works, everyone, particularly consumers benefit.

If it doesn’t, everyone calls me a dumbass, and we go back to doing it the way it was always done.
I can handle that.

Posted by Bobby Henderson (Member # 840) on 02-18-2006, 12:17 AM:

quote: Mark Cuban
If it works, everyone, particularly consumers benefit. If it doesn’t, everyone calls me a dumbass, and we go back to doing it the way it was always done. I can handle that.

The catch is once the genie is out of the bottle it's pretty difficult to cork him back inside the bottle.

I'll give Cuban credit that the idea of paying rebates for theater ticket stubs on premium DVDs released day and date is intriguing. It's even more interesting to allow exhibitors to get a taste of the video sales pie and even have theatrical aimed marketing happening within video stores and other venues. It all sounds pretty good.

But that's until you factor in the human behavior element. The plan sounds good until the folks who buy the more expensive sell-through premium DVDs pass them around amongst their friends, coworkers and anyone else who wants to see the show. I assume these day and date DVDs would not be available for rent at the video store, right? That will just increase the "hey, pal, lemme borrow your DVD for a night" demand.

Maybe this is another reason for all the BD-Java and iHD stuff Toshiba and Sony are having to put into Blu-Ray and HD-DVD. There's no way to control who plays a standard DVD in whose player and all that kind of stuff. But Hollywood could, in theory, get some control on Blu-Ray and HD-DVD discs. Premium day and date HD movie discs could require remote activation as well as player identification and activation for the movie to play. You wouldn't be able to take your $40 disc from the box office and just loan it to anybody. They would have to go buy their own copy....

...or you could just invite them over to your house and they could all watch it on your system. Wow. You're watching video quality equal to the video quality at the movie theater at the same time the same movie is playing in theaters. And you have an audience in your living room. Now that really sounds like home theater to me!
[Big Grin]

Posted by Mike Blakesley (Member # 26) on 02-18-2006, 01:06 PM:

The idea of the theatre sharing in the DVD sales is dumb, too.

Let's say "Chicken Little II" comes out in the theatre, and also on DVD for $29.99.

With the old-fashioned big screen method, I would get a family in and sell 2 adults, 2 kids and one under-5 for $25.50 (that's at my current prices here -- a city theatre would have higher numbers of course.) They buy a jumbo popcorn for the folks to share, plus 2 large drinks and three kids trays -- total at my place, $15.50 for a total sale of $41.00. Figuring 70% film rental and the usual concession markup, I make a solid $20 on that group. More if the film is a couple of weeks old.

With the DVD, I would probably pay about $20 for it. (And I'd probably have to buy a case of 20 of them to get it "on the break" -- or else buy lower quantities from a subdistributor, and wind up paying something like $22 a copy.)

Since the suggested list is $29.99, Wal-Mart and Target and the rest of those bastards would loss-leader it for $19.99. So I would have to at least try to compete, and sell it for say $22.99. One person ("Mom," probably) might come into the theatre to buy the DVD -- or more likely she would buy it at Wal-Mart on her weekly trip there. On the chance that Dad had the idea of bringing the whole tribe into the theatre to see the film, budget-minded Mom would spot the rack of DVDs and say, "Wait, let's just buy this and go home and watch it. I'll heat up a pizza."

The studio, instead of making $17.85 on my ticket sale and another $15 later when the family buys the DVD, would be stuck with just the $15 -- that's IF the family buys it. Not to mention all the unsold returns they would get from the theatres after people bypass them for the lower-priced Wal-Marts. I would go from making $20 to a maximum of $3, but more likely nothing.

Sometimes I am amazed that such stupid people are paid so much money.

Posted by System Notices (Member # 2357) on 03-06-2007, 06:31 PM:

It has been 381 days since the last post.

Posted by Mike Blakesley (Member # 26) on 03-06-2007, 06:31 PM:

Iger is at it yet again. This is from today's (3/7/07) imdb.com:

Iger to Narrow DVD Window

Disney CEO Robert Iger forecast Monday that the window between the time a movie is released in theaters and the time it is released on DVD will continue to shrink. However, he assured theater owners that he will work with them to assure that they will not be harmed by the earlier DVD release. Speaking to a Bear Stearns media conference in Palm Beach, FL, Iger also indicated that the company has seen no evidence that selling DVDs online cannibalizes sales in stores.

==================

I wonder what he's going to do to "work with" us. Make time slow down or something? He certainly won't lower film rent.

Posted by Andrew McCrea (Member # 674) on 03-06-2007, 09:17 PM:

C'mon... obviously "work with" means "force to comply".

Posted by Bobby Henderson (Member # 840) on 03-06-2007, 11:31 PM:

quote: Mike Blakesley
However, he assured theater owners that he will work with them to assure that they will not be harmed by the earlier DVD release.

Could that mean that Iger will give movie theater operators a greater percentage of movie theater box office receipts to balance out that ever shortening window? Right now the movie distributors all but have everything pegged to where they get nearly all the box office ticket money, leaving movie theaters to survive on sales of what Jerry Seinfeld whines is "overpriced popcorn."
[fu]

I loved the Seinfeld TV series, but I am inclined to spray bug killer all over his Bee Movie project. Talk about pissing all over your own shoes! Fucking stupid.

Somehow I strongly doubt Iger will do anything whatsoever to increase box office margins more in the favor of movie theater operators. As far as I'm concerned it just sounds like he is sweet talking the theater chains while he pulls down their shorts and gets ready to bone them in their ass.

Posted by Louis Bornwasser (Member # 3063) on 03-07-2007, 08:33 AM:

Maybe theatre owners should demand a SHARE of the dvd sales, inasmuch as they are now in the business of of paying for the priviledge of promoting them! Louis

Posted by Justin West (Member # 920) on 03-08-2007, 02:09 AM:

Louis: Nice thought but theatres have as much chance of getting a share of the DVD sales pie, as the film companies have of getting a share of every theatre's concession grosses! And that is fine with me! [Wink]