Film-Tech Forum ARCHIVE: More Window Collapse

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Posted by Martin McCaffery (Member # 37) on 09-30-2014, 08:28 PM:

quote:
As Theaters Boycott Netflix, Collapsed Windows Seen as Inevitable
heaters Boycott Netflix, Collapsed Windows Seen
SEPTEMBER 30, 2014 | 05:42PM PT
Brent Lang
Senior Film and Media Reporter
@BrentALang
Major theater chains are united in their opposition to a plan by IMAX, Netflix and the Weinstein Co. to make “Crouching Tiger, Hidden Dragon: The Green Legend” available for streaming on the same day it hits theaters in 2015 but the question remains — how much longer can theater owners withstand the battering ram of technology?

The “Crouching Tiger” standoff heated up Tuesday after the four largest exhibitors in the U.S., AMC, Regal, Cinemark and Carmike, pledged not to show the martial arts sequel next year. That represents 257 of IMAX’s 418 U.S. screens, and these theater chains were joined by Canada’s largest exhibitor Cineplex, and Europe’s second largest theater chain, Cineworld, in a boycott that has grown international in scope.

It means “Crouching Tiger” could play on a limited number of IMAX screens in the U.S., and likely for no more than two weeks, the typical IMAX playing time.

But their efforts may be for naught, analysts say. Even if they succeed in preventing the “Crouching Tiger” revival from showing in theaters while it bows on Netflix at the same time, the old release date patterns are starting to look too archaic to the current insta-generation of consumers.

“The reality is that the future is going to be a lot different in the way that movies are consumed,” said Daniel Ernst, an analyst at Hudson Square Research. “There is zero doubt in my mind that over the next 20 years a lot of these windowing things will erode.”

Tuesday’s show of solidarity among theater owners has not been seen since 2011, when exhibitors banded together and refused to screen “Tower Heist” after Universal unveiled a plan to make the action comedy available on-demand for $60 three weeks after hitting theaters. Since then a tentative peace agreement has adhered to at least a three month window between when a film debuts and when it premieres on home entertainment platforms.

But Hollywood knows that change is coming — a lot faster than 20 years from now.

DreamWorks Animation CEO Jeffrey Katzenberg predicted earlier this year that theatrical windows would shrink to three weeks in the next 10 years, suggesting that audiences should “pay by the inch” to see a movie based on the size of the screen they watch it on.

“A movie screen will be $15,” he said, “A 75-inch TV will be $4. A smartphone will be $1.99.”

Privately, other studio executives may also be ready for the next step. There’s a sense among many Hollywood leaders that the window between a film’s theatrical debut and its release on homevideo is too long, especially for the Internet age. Plus, studios spend tens of millions of dollars marketing films to the masses only to have to turn around and shell out again to re-familiarize audiences with a particular picture when it hits home platforms.

“The moviegoing experience is evolving quickly and profoundly, and Netflix is unquestionably at the forefront of that movement,” said TWC co-chairman Harvey Weinstein in Monday’s announcement.

IMAX claims that the “Crouching Tiger” experiment’s success hinges on its burgeoning network of overseas theaters, but it will need a much warmer reception overseas than it received among North American and European exhibition giants.

If it works, the theater company, Netflix and the Weinstein Company aren’t ruling out other release date tests.

“If there’s an appetite there among exhibitors and among audiences we expect to do several more, but I’m not committed to a strategy,” said IMAX CEO Rich Gelfond. “We’re going in with our eyes open and we were fully aware of the issues people might have.”

IMAX will have over 200 screens in China by the time the “Crouching Tiger” sequel debuts on Aug. 28, 2015, so it may be able to make up for the loss of China’s Wanda, which owns AMC theaters. It also helps that Netflix does not operate in China, which means the film will not ignite as much controversy among exhibitors.

“Provided it gets through the quota on foreign films, this is an important market and we do intend to show it there,” said Gelfond. “Given the nature of the film, it should do well there.”

Not every one is convinced that releasing the “Crouching Tiger” film on Netflix and in theaters at the same time endangers ticket buying. The late August release date was selected by IMAX and its partners because it historically is one of the worst box office weekends of the year. Moreover, the film itself is modestly budgeted in the $20 million range.

“We believe there are a number of relatively small sized budget films ($15mn-$30mn) which could draw an audience via Netflix without impacting exhibition industry grosses,” wrote Eric Handler, an analyst with MKM Partners, in a note to investors. “In fact there are hundreds of films every year that bypass theatres and launch direct to DVD/VOD.”

He noted that films like “Arbitrage” and “Margin Call” have been unveiled on-demand at the same time they hit theater without disrupting the exhibition game — all films that opened in limited release, like Radius-TWC’s own VOD success this summer, “Snowpiercer.”

If theater chains want to thwart the digital threats, analysts argue, they need to improve the premium nature of their experience. Not only must they compete with each other, they would need to head off against gleaming home entertainment systems and the ubiquity and convenience of streaming services and mobile devices.

“It’s got to be different,” said Ernst. “You’ve got to win customers every single day.”

There is one issue on which theater chains and IMAX’s leadership agree: the best way to see a movie is in theaters.

“A movie like ‘Crouching Tiger,’ which is a visual spectacle that comes off a highly successful prequel, should be seen in the way it was meant to be seen — with big screens, big images and great sound,” said Gelfond.

The only difference is that in the case of the “Crouching Tiger” sequel, people can see it on a 3-inch screen instead, and that’s what has theater chains seeing red.

Variety

Posted by Frank Cox (Member # 6258) on 09-30-2014, 09:26 PM:

I remember reading a very insightful comment somewhere (maybe here?) stating that without theatres, movie companies are just television studios without a channel.

I really don't see why they would want to play that role. No "made for tv" movie has ever received the hype or attention that any of a dozen or more movies that are released in theatres receive each and every year.

I suppose there is a question of having confidence in your product too. I have difficulty believing that in competition with a three-inch cell phone, folks like us who measure our screens in feet can't compete.

Posted by Mike Blakesley (Member # 26) on 09-30-2014, 09:36 PM:

I guess I still don't understand Jeff Katzenberg's "pay by the inch" thing. Under that model the only way the studios would make money is if hardly anyone watched a movie on a cellphone for $1.99 and most people still went to theaters for $15. That won't happen, especially after a few cellphone watchers start Facebooking and Tweeting and otherwise posting how bad the movie sucks....or if people invite a gang of friends over to their "gleaming home theater" to watch a new movie for which only $4 was paid.

If a million people watch a movie on phones, that's $2 million. If a million people watch a movie on home theaters in an average group size of four people, for which the video costs $4, the movie would only gross ONE million. If the same people were to watch a movie in theaters, each paying for a ticket, that's a $15 million gross. If the studios stupidly think they're going to keep the same audiences in place and ADD phone/home people....I think they're sadly mistaken.

Posted by Bobby Henderson (Member # 840) on 09-30-2014, 09:39 PM:

Here we have yet another round of bean counter fantasy playing out in Hollywood board rooms. As usual the entertainment press (Variety in this case) has no clue regarding the perspective of theater operators or the very basic nature of race to the bottom economics.

The only thing the article got right at all was the need for theaters to step up their game in terms of presentation quality, although it sounded more like "theaters need to price gouge customers for more premium experience thingies."

I'm pretty shocked IMAX of all companies would be willing to get into bed with Netflix and the Weinstein Co. with this day and date scheme. If IMAX gets into the habit of supporting these kinds of releases, and if any of those releases are major, I could see exhibitors like Regal retaliating by pulling IMAX-branded equipment and signs out of their theaters very quickly.

quote: Variety article
DreamWorks Animation CEO Jeffrey Katzenberg predicted earlier this year that theatrical windows would shrink to three weeks in the next 10 years, suggesting that audiences should “pay by the inch” to see a movie based on the size of the screen they watch it on.

“A movie screen will be $15,” he said, “A 75-inch TV will be $4. A smartphone will be $1.99.”

If a movie studio makes all three of those sized versions available at the same time the overwhelming majority of potential customers will choose that $1.99 version. Simple as that. If they turn that idea into the standard release model you'll see nearly every movie theater go out of business within maybe a year or two, tops.

I'm not even sure how one could "tax" a viewer based on screen size. The average 75" HDTV set and most new smart phones both have 1080p HD resolution displays. It's easy for most anyone to duplicate their smart phone display on their TV set using a HDMI cable.

quote: Eric Handler in Variety article
“We believe there are a number of relatively small sized budget films ($15mn-$30mn) which could draw an audience via Netflix without impacting exhibition industry grosses,” wrote Eric Handler, an analyst with MKM Partners, in a note to investors. “In fact there are hundreds of films every year that bypass theatres and launch direct to DVD/VOD.”

Let's see Hollywood try this experient with one of their really big movies, something with a $200 million production budget. If they're so sure about this scheme let's see them really take a chance with it instead of a throw-away movie being released in the dregs of late August.

That industry analyst Variety quoted mentioned the fact lots of movies bypass theaters and go direct to DVD or VOD. Of course he didn't point out any real hits among all those direct to video movies.

quote: Frank Cox
I remember reading a very insightful comment somewhere (maybe here?) stating that without theatres, movie companies are just television studios without a channel.

I've repeated that comment at least a couple times here. Essentially that is what movie studios would reduce themselves to being if they screw up and kill off the theatrical end of the movie business.

Posted by Mike Blakesley (Member # 26) on 09-30-2014, 10:34 PM:

What I hate is the theatrical industry is always painted as whining "bad guys" in this whole scenario. "Theaters were fiercely opposed" is a phrase that pops up frequently. This is always followed by some studio flunky saying "We all realize the best way to see a movie is in theaters." WELL THEN QUIT TRYING TO DESTROY THE THEATERS, you idiots!

Posted by Justin Hamaker (Member # 2165) on 09-30-2014, 10:49 PM:

They say theatres need to step up their game in terms of presentation quality. However, they keep trying to marginalize theatres, which means there is less money available to keep the theatre up-to-date while still paying to keep the lights on. At some point the margins are just going to get too small for many small market theatres to stay in business. Unless you live with in reasonable driving distance to a major market, seeing a movie in the theatre will become a thing of the past for many people.

Posted by Bobby Henderson (Member # 840) on 09-30-2014, 11:47 PM:

Hell, the way things are going most people won't be able to visit an actual store that sells/rents movies and sells other kinds of entertainment (music, games, books, etc.).

Not only are movie studios trying to marginalize theaters, taking ever more of the "pie" for themselves, but they're also trying to cut out video stores and retailers too. They've quietly declared war on physical media. Lately new movies are getting released as digital downloads weeks ahead or even a full month ahead of the Blu-ray release. Lots of people are only too happy to wait a month after the Blu-ray/DVD release so they can stream it on Netflix for dirt cheap.

Hastings runs the biggest video store here in Lawton. I don't know what their financial situation may be, but crowds have been very much on the light side there for the past couple years. The store is trying to do what it can to compete, like matching Redbox on rental pricing yet offering a much larger variety not to mention it stocks all sorts of other stuff (books, comic books, games, etc.), has reading areas, free WiFi, etc. Even with all the effort the store just doesn't have very many customers inside whenever I visit. I have a bad feeling I'm going to drive over there one of these days and find it closed for good.

Just what the hell are these movie studios trying to accomplish? Be nothing but content providers to Netflix, Amazon Prime and Hulu+?

I'll need to put on a tin foil hat for this next bit:

Sometimes I wonder if certain powers that be are deliberately screwing up the movie business, like a slow form of sabotage. Not everyone likes the movie business or even the entertainment industry at all. There are certain wealthy, powerful people in this country who would not mind seeing "Hollywood" go belly up. They would be perfectly happy with the entertainment industry being a TV-only thing. I wonder about this stuff since other much larger companies now own all the big movie distribution companies.

Posted by Martin McCaffery (Member # 37) on 10-01-2014, 08:21 AM:

quote: Bobby Henderson
Just what the hell are these movie studios trying to accomplish? Be nothing but content providers to Netflix, Amazon Prime and Hulu+?

Umm, yes.

Since they got in the biz too late to be their own Netflix, Amazon, etc, the next best thing is to be the provider until such a time one of the beast assimilates the other. Synergy. Resistance is futile, etc.

Is Hulu still part of NBC/Universal? Vertical integration returns and no Justice Dept anti-trust unit is going to give a damn this time.

Posted by Bobby Henderson (Member # 840) on 10-01-2014, 10:25 AM:

According to Wikipedia:

quote: Wikipedia page for Hulu
Hulu is a joint venture of NBCUniversal Television Group (Comcast),[6] Fox Broadcasting Company (21st Century Fox) and Disney–ABC Television Group (The Walt Disney Company),[7] with funding by Providence Equity Partners, the owner of Newport Television, which made a US$100 million equity investment and received a 10% stake.[8] In October 2012, Providence sold its 10% stake in Hulu.

The page mentions viewer numbers for Hulu being in steady decline and that various partners are looking for a buyer.

Obviously Netflix is, by far, the market leader for subscription-based streaming video services. I don't know how well other competing services like Amazon Prime, Redbox Instant, Vudu & Apple TV are doing compared with Netflix.

I expect some consolidation to take place -or just some of those competitors to fail. Another thing I expect is content providers demanding more and more money from Netflix and pushing them to raise subscription rates.

This year the U.S. pay TV industry recorded its first ever net loss of subscribers. This is clear evidence that a growing percentage of the population is "cutting the cord." I think some viewers have been forced to do that. Cable and satellite TV providers have been price gouging customers for the past few years and doing so in a struggling economy.

My Dish Network bill is nearly double what it was four years ago and I don't have as many channels as I did in 2010. If I didn't like live sports broadcasts and certain programs on HBO so much I'd get rid of the service.

Posted by Lyle Romer (Member # 1266) on 10-01-2014, 12:35 PM:

quote: Bobby Henderson
This year the U.S. pay TV industry recorded its first ever net loss of subscribers. This is clear evidence that a growing percentage of the population is "cutting the cord."

Of course nobody is literally cutting the cord because they need the internet connection "cord" to watch the streaming services. What will probably happen that the idiots in the studio executive offices don't anticipate is that ISPs will raise prices.

Therefore, all that the studios will have accomplished is getting more people to watch via Netflix where the studio gets a smaller cut while allowing the large ISPs to make additional profit without having to give the studios any cut.

For studios, the most profitable thing would be to eliminate home video period and have movies play in theatres only. At the same time, work with the exhibitors to lower the percentage by 10% or so but do it contractually in a way that forces the exhibitors to lower ticket prices a little bit in return and make it more affordable.

They could make a lot more money by increasing the high margin way of seeing a movie than they ever can by pushing everybody to pay $1.99.

I know that isn't realistic but the problem is that especially since Redbox appeared, they are devaluing their content.

Why would a studio ever push things to Netflix anyway? Netflix is only charging $9 a month. The content provider revenue share has to be divided thousands of ways. How much is Weinstein going to end up with?

Posted by Bobby Henderson (Member # 840) on 10-01-2014, 02:03 PM:

The executives at movie studios, or excuse me, the executives running the movie studios' parent corporations, are only interested in whatever scheme can be cooked up to give them more money faster. They care far less about one component of the entire business (movie theaters) than they do the overall big picture view of the business.

I don't see media companies ever bringing back the traditional long theatrical release window. I think they would rather see the movie industry fail than do something like that.

Media executives fail to see domino principal involved in the movie business. One domino leans on another and then another in a natural, linear cascade. They think they can make just as much money and make all that money faster by removing some of the dominoes from play or stacking them parallel to each other in an attempt to speed up the process. But that doesn't work.

These executives still want to push these schemes anyway because they're funding lots of movie productions and other operations with huge sums of money that's borrowed, leveraged or whatever. They want that debt paid off as fast as possible. Because they not only plan to make even more money with these schemes, but they plan to do it paying as little interest as possible, which equates to more positive cash flow and more profit. It's an accountant's wet dream -and pure fantasy.

In trying to force the life cycle of movies through far shorter, faster periods of time these guys are ultimately going to make less money and make the movie business a lot smaller, if they don't destroy it completely.

The commercial movie theater is the primary gateway and visual touch tone people associate with movies. If you don't have a viable movie theater industry you have no movie business period. It's all TV otherwise. The damned executives can't figure out that truth. All they need to do is look at what people are watching the most on video. It's not movies as much as it is TV. Most Netflix customers binge watch TV series. They watch content that was tailored for TV. I personally rarely ever watch movies streamed via Amazon Prime. I'll go rent a movie on Blu-ray from Hastings, but if I fire up Amazon Prime or HBO GO I am mainly doing so to catch up on some TV show. Speaking of which, does anyone know when Sons of Anarchy Season 6 is going to get on Netflix and Amazon Prime? I have a handful of Season 7 episodes sitting on my DVR and I can't watch those until I'm caught up on Season 6.

Ultimately these media corporation big wigs are plotting on one thing: monopoly. They're buying up every part of the media puzzle, and Internet service providers figure into that. Comcast owns NBC/Universal.

More tin foil hat time: maybe these media guys are trying to screw up the movie theater business enough so the companies become unprofitable and their stock takes a nose dive. The media corp. guys will act like they're riding to the rescue to "save" the movie theaters and convince the Securities & Exchange Commission as well as the Dept. of Justice that movie studios need to own movie theater chains wholly once again. Then the media companies will be able to have complete vertical monopolies (movie studios, movie theaters, broadcast/cable networks, ISPs, radio stations, etc.). It's only a matter of time before Netflix gets bought by a major media company or Netflix buys one of them.

Posted by Mitchell Dvoskin (Member # 751) on 10-01-2014, 03:57 PM:

> convince the Securities & Exchange Commission as well as the Dept. of Justice that movie studios need to own movie theater chains wholly once again.

I believe that many of the circuits that were subject to the Paramount consent decrees were released from those restrictions about 10 years ago (maybe more). They convinced the Justice dept that the exhibition industry has now changed so significantly do in part to large multiplexes, that they could no longer monopolize the business even if they wanted to. If memory serves me, this goes back to when Sony purchased Loews Theatres while owning Columbia Pictures.

Posted by Marcel Birgelen (Member # 6801) on 10-02-2014, 05:15 AM:

Adam Sandler just signed a 4-movie exclusive deal with Netfix.

quote:
Proclaims Sandler, "Let the streaming begin!!!!"

Snagging one of the world's best-known Hollywood stars, Netflix has signed a deal to make four feature films with Adam Sandler as the streaming service continues its empire building and moves into producing original movies that bypass the usual theatrical release.

As long as only the crappy directors and actors sign exclusive deals with Netflix, Hulu and whatnot, I only see bright sides. Heck, it might even get some quality back into theatrical movie releases.

Posted by Edward Havens (Member # 4715) on 10-03-2014, 09:27 PM:

Of course, for every instance one can find proof of more window collapsing, one can also find proof of the window getting stronger. Marvel and Disney waited five months to release Captain America: The Winter Soldier on Blu-Ray and DVD, and it will be five months between theatrical and Blu-Ray/DVD for Guardians of the Galaxy. Lionsgate is waiting almost a year between releasing A Madea Christmas on DVD after theatrical. Mr. Peabody and Sherman, seven months. Maleficent, five months. Dawn of the Planet of the Apes, 22 Jump Street, How to Train Your Dragon 2, all five months each. In fact, the Blu-Ray/DVD release window has grown in the past year, from less than 100 days to nearly 120 days.

Posted by Bobby Henderson (Member # 840) on 10-05-2014, 04:42 PM:

Edward, you might want to double check things about that increased window.

If the window between theatrical release and Blu-ray/DVD release is increasing in lenghth at all (which I doubt), it's only because Hollywood movie studios are giving "HD Digital" movie downloads more of an exclusive window on its own.

In the case of Captain America: The Winter Solider, the digital download version was available for at least a month ahead of the Blu-ray/DVD release. Lots of movie releases are going this route, attacking physical media formats and traditional retail channels in the process. Clearly, Hollywood studios want no retail "partners" and want any home video customers buying directly from them via a download that costs them little if anything. Hooray for more profit.

In the case of the Madea movie and Peabody & Mr. Sherman, that's 100% all about the holiday shopping season and those specific movies tying into that season. Those movies would probably sell/rent better during that time rather than releasing them sooner.

But then again, there's a big difference between paying $20+ for a virtual movie download versus waiting a few weeks longer for it to show up on Netflix.

I don't think the movie studios and TV networks understand much about the general public and its ability to wait longer to get something at a much cheaper price (or for free).

Some of their "make them wait" practices can arguably be backfiring on them too. FX Networks is currently airing the final season of Sons of Anarchy on the FX network. But the previous season still isn't available on Netflix or Amazon Prime Instant Video. The Blu-ray/DVD box set of SOA Season 6 was released just 1 week before the Season 7 debut. They're basically forcing a lot of people trying to catch up on the series to DVR "time-shift" watching all those new season episodes until the previous season finally becomes available to stream near the end of this month. I'm in that camp. Haven't seen Season 6 yet, even though a couple ass-hats spoiled a couple big things in it for me. Ultimately here's the problem: FX should be wanting viewers to watch the new season episodes in their original airings that way they can see all the TV commercials that air which help pay for the show. Unfortunately for FX, when I am finally able to watch those shows on my DVR I am going to fast forward past every commercial I see. Great job on that window strategy FX!

Posted by Edward Havens (Member # 4715) on 10-06-2014, 09:36 AM:

Bobby, that's been the way for television shows on DVD for at least ten to twelve years. Pretty much every show my wife and I have been buying on DVD/Blu-Ray, from The Office and How I Met Your Mother to Game of Thrones and Castle, finds the previous season being released days before (or sometimes, days after) the premiere of the new season. I didn't start watching GoT until just before the start of Season 4, so getting through Seasons 1 and 2 wasn't so bad. Took our own sweet time watching them. But damn, we had to plow through Season 3 as soon as it hit stores, because the first episode of S4 had already aired. Grrrrr.

I'd be curious to see how well the "pre-release" digital downloads sell. I don't know anyone from my seventysomething father to any of the teenagers I work with at my theatre, who go for them. Despite what the studios may desire, the people I know still like their movies the old fashioned way... on DVD and Blu-Ray. [Roll Eyes]

Posted by Bobby Henderson (Member # 840) on 10-06-2014, 10:29 AM:

I think the approach seems to vary based on the network and then sometimes the specific TV show.

AMC's The Walking Dead now has its previous season available to stream on Netflix. That Blu-ray/DVD box set arrived in stores Aug. 26, the same day as the previous season box set of Sons of Anarchy. The new season of The Walking Dead starts next Sunday. Anyone wanting to get current on The Walking Dead will at least have some chance to binge watch on Netflix to get caught up prior to next Sunday.

Any HBO subscriber can sign up for a free HBO GO account and watch any episode of any original series they've aired in the last 15 or so years. New episodes, such as the latest episode of Boardwalk Empire for example, pops up on HBO GO immediately after its original Sunday night debut. OTOH, HBO does like to wait around for releasing a TV show's Blu-ray/DVD season box set right up until just before the next season starts. Amazon Prime Instant Video has started carrying various HBO series, but they vary in coverage (some are just season 1 only while others, such as The Sopranos have all seasons available; no GoT though).

IIRC, some TV shows have had current season episodes appear on Netflix, Amazon Prime or Hulu, not long after the original airings. I think Fox did that with that 24 mini series thing this past Summer.

quote: Edward Havens
I'd be curious to see how well the "pre-release" digital downloads sell. I don't know anyone from my seventysomething father to any of the teenagers I work with at my theatre, who go for them.

I don't know anyone who buys those digital downloads either. But I'll bet at least some people are buying them. Any time I boot up my Playstation 3 I see digital download movie ads on Playstation Network's front end. The same goes for Amazon's Instant Video service. Apple is in on this act too. Movie studios are aggressively pushing digital downloads on TV commercials, specifically saying they're available now but the Blu-ray and DVD are getting released later.

Posted by Terry Lynn-Stevens (Member # 7349) on 10-07-2014, 01:31 AM:

quote: Frank Cox
I have difficulty believing that in competition with a three-inch cell phone, folks like us who measure our screens in feet can't compete.

While I completely agree with others that the shrinking window reduces exhibitor grosses, I do have to say that some sort of change/shake up is on the horizon.

The current model of theatrical windowing really is its twilight, the window was once 9 months has now been brought down to as little as 90 days. (I believe Fault in the Our Stars was 97 days). Eventually, at some point in some way the window will be day and date or 14-21 days after the theatrical release. All in takes is one exhibitor to be crazy enough to change their business model or what if Verizon was to buy Regal and then agree to open a movie day and date with the option of cell phone streaming or home theater viewing? It would likely change everything. Then Rogers buys Cineplex and is the exclusive provider for theaters and streaming for the first six months of a movie in Canada? What if Netflix bought one of the chains? Currently Netflix has revenue numbers that match a studio. I remember when Blockbuster refused to take Netflix seriously and adapt their business model and look what has happened to Blockbuster.

The P & A costs are drastically reduced with shortened windows.

Well I totally expected the big chains to react to the Weinstein/Neflix deal, preserving their bricks and mortar venues and the window that provides the content is essential, but the chains really have to see the bigger picture. The chains exhibitors need to open up the possibility of other revenue streams. Would it be possible for the big chains to possibly allow a release of a digital movie at 14-21 days if they were the exclusive provider for the first nine months?

I never expected Netflix to become as big as they area, they have 54 million subscriptions in 53 countries. I also do not think it will all of a sudden cannibalize the big screen experience, it will certainly wipe out the smaller players and the week 3-4-5 revenues.

Let me say again, I totally agree that a longer window preserves the theatrical revenue and makes the same or more money for the exhibitor and studio. The better the relationship between the two, the more money that can be made. My big fear is that eventually some company or crazy chain executive will somehow end the window and that will totally destroy the power the chains currently have now. I think the major chains need to be open to allowing the smaller pictures that did not do so well at the box office to have a shortened window as long as they are the ones who are also exclusively distributing the content online.

Posted by Lyle Romer (Member # 1266) on 10-07-2014, 05:31 AM:

quote: Terry Lynn-Stevens
My big fear is that eventually some company or crazy chain executive will somehow end the window and that will totally destroy the power the chains currently have now.

Unless the chain is owned by the studio or Netflix, no executive would EVER do this.

Also, theatres, as they have been built for the past 25 years (or however long it's been since the AMC Grand 24 opened), have too much overhead to survive without some sort of decent week 3+ gross.

To have anything like that, you'd have to have single to 4-plex type locations.

Bottom line is that NO chain will survive a day and date or 1-2 week exclusive model.

After the theatres shut down, movies will cease to exist as we know them. Once they become glorified TV shows, nobody will pay a premium to watch them. For the highest rated cable TV series, people are paying $10 or so PER MONTH to be able to watch them and they get several episodes plus everything else on HBO/Showtime.

Posted by Justin West (Member # 920) on 10-07-2014, 10:42 AM:

I did a quick google search on the analyst quoted in the article (Daniel Ernst) and Business Week describes him as specializing in software and the internet...which is why his comment that he expects these window thingies to erode over the next 20 years...it really doesn't unnerve me. All one has to do is look at the past 20 years to see that the windows have shrunk AND that the efforts of a few studios and DVD/streaming video/On Demand distributors to cut that window further have been made to no landmark success. Why should that change? The analyst is not an expert in the movie production or theatrical exhibition industry...but his quote helped make the article, that's all. [Shrug]

Posted by Bobby Henderson (Member # 840) on 10-07-2014, 12:50 PM:

I understand completely why movie studios and their parent media companies are pushing for ever shorter release windows or even releasing movies simultaneously in theaters and on home video in some form or another. It sucks for them if they have to absorb the costs of extra interest payments on money they've borrowed to produce and market a movie. There are efforts that are duplicated between theatrical release and other forms of release in a movie's life cycle. Marketing costs are high, so it really hurts to have a big marketing push for the theatrical release only to turn around and do it again for the home video release.

While those extra costs are painful, the movie studios would pay a far harsher penalty by pushing the theatrical release and various forms of home video release too close to each other. The studios would become unwitting victims of race to the bottom economics.

Fact: the overwhelming majority of movie viewers would choose a cheaper alternative to see a movie if it was available to them at the same time. The higher price of a movie ticket is balanced against the inconvenience of having to wait a few months for the same movie to show up (legally) on home video.

If you move the home video release date too close to the movie's theatrical release date then it's far less of a hardship for anyone to just wait for the home video release. Several months of waiting is hard to endure for a movie you want to see pretty badly. A couple or so weeks of waiting is no big deal.

Netflix is popular for one reason alone: low price. It is not about anything else. It sure as hell isn't about any kind of cultural change in how people prefer to watch movies. Everyone prefers to see a good movie in a real movie theater, but many don't do so for various reasons. PRICE is the top reason many viewers stay at home. If they're going to watch a movie at home they're going to do it using the least expensive alternative available to them. For many Netflix is that least costly alternative.

Customers have no problem whatsoever in waiting for something to appear at a cheaper price. Shit, I'm guilty of doing this with Blu-ray discs. Why buy a disc at full price upon its release date when it will be half that cost a few months later? I gotta really want the disc bad to pay full price for it. Lots of people don't care quite so much about video bit rates and encoding quality. It's nothing for them to bypass a Blu-ray disc completely and just wait until the movie appears on Netflix where it doesn't cost them anything extra above their subscription rate.

I'd like to know how well the latest season box sets of Sons of Anarchy and The Walking Dead are selling on Blu-ray and DVD. I would not be surprised if those product sales weren't all that great. Everyone knows those seasons would eventually be available on Netflix. Why spend $40 or so on a box set of discs you're really only going to watch once when you can stream those shows for nothing extra a few weeks later?

Posted by Martin McCaffery (Member # 37) on 07-08-2015, 02:50 PM:

And now more collapse:

quote:
Paramount Teams With Exhibitors to Shorten Home Entertainment Release Windows
JULY 8, 2015 | 11:09AM PT
Brent Lang
Senior Film and Media Reporter
@BrentALang
Paramount Pictures is partnering with two leading exhibitors on an initiative that could significantly shrink the amount of time between a film’s theatrical release and its home entertainment debut.

The studio is teaming up with AMC Theatres and Cineplex Entertainment on an unorthodox rollout of two low-budget horror films, “Paranormal Activity: The Ghost Dimension” and “Scout’s Guide to the Zombie Apocalypse.” The films will be available on home entertainment platforms 17 days after leaving theaters.

One other chain has signed on and is expected to go public as soon as tomorrow, but it’s not clear if other major exhibitors like Regal and Cinemark will show the films.

In recent years, studios and exhibitors have clashed whenever there has been an effort to shorten the window for when a film becomes available on DVD or on-demand platforms, which is traditionally 90 days, as many believe audiences will skip the multiplexes if they can see many films from the comfort of the couch.

Paramount is sweetening the pot by offering theater chains who show the film a percentage of the studio’s digital revenue for the period of digital and cable on-demand availability through the first three months from the initial U.S. theatrical release. The percentage that an exhibitor receives will be related to its market share, a spokeswoman for Paramount said.

The two films, both of which have October release dates, will be allowed to play in theaters exclusively until the number of screens showing the pictures drops to 300 or less. At that point, the clock will start ticking on the pending home entertainment release. Typically, for films of this size, that will take place four to six weeks after a theatrical debut, the spokeswoman said. She depicted the initiative not as shortening windows, but enabling greater flexibility, because by a time a picture has such a limited theatrical footprint, neither exhibitors nor studios stand to generate much revenue.

Paramount isn’t the first studio to try to overhaul release windows. In 2011, Universal Pictures got an earful from theater chains when it tried to release the comedy “Tower Heist” in a few select markets for a premium price three weeks after it hit theaters. Faced with a boycott, Universal abandoned that plan. Last year, Sony got into it with theater owners when the studio pulled “The Interview” from screens amid terrorist threats before backtracking and launching a simultaneous video-on-demand and theatrical launch. Most exhibitors refused to play the film, consigning it to a few indie chains and arthouses.

News of Paramount’s plan has yet to provoke the same level of exhibitor backlash, and a spokesman for the National Association of Theatre Owners, the cinema business’ main lobbying arm, praised Paramount for working with its members.

“For several years we’ve been asking for the studios to work with theater owners on developing new models and ways to grow the whole pie and market in ways that don’t damage a film’s theatrical run,” said Patrick Corcoran. “We applaud Paramount for discussing this with theater owners.”

Corcoran said NATO’s other members would have to “evaluate and decide for themselves” about supporting the Paramount initiative. AMC is the second largest theater chain in North America and Canada-based Cineplex is the fifth largest.

The Wall Street Journal first reported plans for the initiative.

Variety

Posted by Steve Guttag (Member # 268) on 07-08-2015, 04:17 PM:

I have a deal for you...1-year (minimum) after it ceases commercial release...that is the only acceptable "deal"

The plan that AMC is signing onto only serves to shorten the window. For it does TEACH the patron to wait for the home release. Even if they don't get it, it only serves to reduce revenue from both the studio AND the exhibitor for the studio only gets 1 pass at the revenue and the exhibitor gets a portion of the potential audience.

In the 1-year + approach, the exhibitor gets to milk it for what its worth for anyone that wants to see it (with their studio partner getting their substantial cut)...and then a year later, the studio gets to milk it again after it has been given enough rest that people won't think they just saw it. And if it is a real blockbuster...delay the home release even longer and do another theatrical run.

Posted by Mike Blakesley (Member # 26) on 07-08-2015, 07:54 PM:

The fact that these are "low budget horror films" is telling. Horror films do way more of their business in the opening couple of weeks than average, so a cockamamie thing like this sort of makes sense for those kind of movies. Bottom line it's not that much different from what studios are already doing with low-budget indie films.

They might wind up shooting themselves in the foot though, since a lot of other chains may opt not to play these movies.

Posted by Mitchell Dvoskin (Member # 751) on 07-09-2015, 08:54 AM:

quote: Steve Guttag
For it does TEACH the patron to wait for the home release.

That is exactly what it tells me. Unless it is the rare film that I really want to see on the big screen, I usually just put it on my Netflix queue while it is still in first run, and 90 to 100 days later it is in my home. I don't even have to remember I queued it, Netflix remembers. If this shortened window becomes the norm, it is a double bonus for home viewing.

The days when going out to a movie gave you an experience that all but the wealthy could not duplicate at home. This is no longer the case. Within the year, 4K home unit will become more common, meaning that home viewing will have higher resolution than many commercial theatres.

Yes, the industry is shooting itself in the foot. A year hold back would prompt people like me to go out to the movies more often, 45 to 60 days I would actually rather wait to see it at home.

Posted by Bobby Henderson (Member # 840) on 07-09-2015, 09:43 AM:

quote: Steve Guttag
In the 1-year + approach, the exhibitor gets to milk it for what its worth for anyone that wants to see it (with their studio partner getting their substantial cut)...and then a year later, the studio gets to milk it again after it has been given enough rest that people won't think they just saw it. And if it is a real blockbuster...delay the home release even longer and do another theatrical run.

That's how it should be done. Unfortunately the movie studios and their global media conglomerate parent companies only want the opposite extreme. I think they would do a theatrical release as a single weekend UFC-style pay per view event if they thought they could get away with it, in theaters one week and on Netflix next week.

My theory is the bosses and bean counters are only looking at the situation through the prism of paying back all the money borrowed to fund a movie's production and marketing. The longer it takes to pay back all that money the more they have to pay out in interest. They want to minimize that at all costs, even if it means rushing a movie through all phases of production and making its original theatrical release a very short blip on the calendar.

Obviously they think they're going to make the same amount of money on a movie release regardless of how much time they give a movie in a particular release platform, be it the theater, digital download sales, VOD, Blu-ray, cable, Netflix, etc. The attitude is "let's make all that money, but much faster!" Of course that thinking way the hell all wrong.

The movie studio people and parent media company people don't seem to have the first clue the American public ALWAYS is looking for a bargain and will take the cheapest option available most of the time. They also don't seem to have the first clue Americans find it very easy to wait a few weeks or a couple months to see a movie.

It's nothing these days to skip seeing a movie during its theatrical release. Hardly any time passes at all before I see spam on TV or the Internet promoting the HD Digital download on sale. Those are now pre-dating the Blu-ray release by more than a month in some cases; and it's not a very long span of time between a movie leaving theaters and having BD copies on store shelves.

Posted by Mike Blakesley (Member # 26) on 07-09-2015, 12:30 PM:

quote: Mitchell Dvoskin
A year hold back would prompt people like me to go out to the movies more often, 45 to 60 days I would actually rather wait to see it at home.

I don't know if that's really true anymore, at least in many cases. There are SO many things to watch on TV now. It's easy for a movie to get lost in the shuffle.

So many movies today are just forgettable fluff, so the notion of "I HAVE to see that!" evaporates quickly. I have already completely forgotten the most recent Avengers movie, for example and have zero desire to buy a BluRay of it -- or anything else I've seen lately, for that matter. So if they waited a year for video, a lot of people would STILL skip it in the theaters because they have so much else stacked up in their queue to watch.

To me the worst thing about this Paramount experiment is that they ARE doing it with horror movies, which do most of their business the first weekend, so the grosses will be about the same as they would have been anyway, and thus they will very handily be able to say "See, theater owners? The early video release didn't hurt at all, so let's try it with a few MORE movies." We're on a slippery slope here.

Posted by Mitchell Dvoskin (Member # 751) on 07-09-2015, 03:48 PM:

> There are SO many things to watch on TV now. It's easy for a movie to get lost in the shuffle.

That is why people put movies on their Netflix queue while they are still in first run, the advertising is still fresh in their minds. If they are no longer interested when it becomes available, then they just don't bother watching it.

I don't know about the rest of the country, but around here in northern NJ (suburbs of New York City), most movies are in theatres for 3 to 4 weeks. If this takes hold, it will mean that in about 6 weeks after a film premiers, it will be available for home viewing.

Another issue I am sure the studios have not taken into account is that for films that are not released day and date around the world, this will be a bootleggers dream for obtaining high quality source material.

> We're on a slippery slope here.

More like a steep slide with quicksand at the bottom.

Posted by Buck Wilson (Member # 5885) on 07-09-2015, 11:36 PM:

The desire for them to devalue their product like they are is just mind boggling.

And on the topic of theaters upping their presentation standard, there is certainly a lot exhibitors can do but I gotta say, it bugs the hell out of me that the quality of the CONTENT is bottlenecked BY THEM. Example: Jurassic World, top 5 summer blockbuster, released in 2k and 5.1 only. That wasn't sufficient A DECADE AGO. It used to be "Oh, home theaters might catch up some day" now it's "Most TV sets sold today exceed the resolution of literally all of exhibition"

Why would a theater even upgrade if the content isn't readily available?

Ridiculous. I have a hard time even fashoning a dream theater in my mind anymore. I could be on the bleeding edge of tech and advertise it, but then I couldn't show movies like JW and have to post signs explaining why.

Just ranting out loud.

Posted by Manny Montes (Member # 5639) on 07-10-2015, 01:51 AM:

Well if you look at it though, the good news is that the same bottleneck for content is in home theater too. it's necessary to keep the window wide because as everyone has said, you have to wait until people don't feel like they "just saw it" and you can increase both box office as well as home video sales. Unfortunately we live in a society of NOW NOW NOW, where wal-mart is taking pre-orders for the special edition blu-ray,dvd,digital,laserdisc,mind vision combo-pack the day it opens in theaters.

We'll see how this test does and i'm interested to see if other chains join with them or boycott the films and cause them to back down.

Posted by Buck Wilson (Member # 5885) on 07-10-2015, 06:52 AM:

Oh I'm not arguing the window needs to be longer.

The worst part of it is, it doesn't matter how the test goes, they're going to keep doing it anyways.

Some sick part of me does think "screw the window, let EVERYONE compete" but that's sure to either kill the industry or devalue it even more until theaters are basically compartmentalized bars or things will get REALLY gimmicky like "SmartPhone Theaters" where a bunch of people gather to watch the same movie on hundreds of different screens all in the same only slightly dark room... with a $3 surcharge for the phone chargers of course.

Boy howdy I am entirely too bitter to be 24.

Posted by Harold Hallikainen (Member # 5405) on 07-10-2015, 09:00 PM:

Speaking of Smart Phone theaters, how about this ? Pizza box plus phone = movie projector.

Harold

Posted by Mike Blakesley (Member # 26) on 07-10-2015, 11:16 PM:

quote: Buck Wilson
I could be on the bleeding edge of tech and advertise it, but then I couldn't show movies like JW and have to post signs explaining why.

And the other sad thing is, EVEN IF every theater in the world was suddenly able to upgrade to the bleeding edge of technology, do you think they would increase the window in response? No, the studios would STILL race to devalue the product because they somehow think that more people seeing the movie in as many ways as possible = more money -- which is probably not going to work out to be true.