In Cinemas and On-Demand

It is Monday morning.  I'm packing for the trip to Las Vegas to attend CinemaCon. This year will be most interesting as the battle for day-and-date movie releases is really starting to ramp-up.

Several of the majors, led by Universal (owned by Comcast) and Warner Bros. are pushing hard to shorten the exclusive theatrical release window that movie exhibitors now have. Their opening proposal was for cinemas to have exclusive screening rights for 7 days, after-which the movie would be made available via on-demand streaming for $50 - a portion of which would be shared with the exhibitors.  This option was DOA with the exhibitors and the other major studios thought the $50 fee was too high.

Next, Fox and Warner Bros. proposed making films available between 30 - 45 days after debut, but at a  $30 rental fee. At $30, the studios feel consumers wouldn't cringe at the price. Universal (which is the most aggressive of the studios) doesn't like the 30-45 day rule and wants the time to be, at most, 20 days.

For years, CMG has asserted that it was only a matter of time before movies would be made available day-and-date across all platforms so it should come as no surprise to exhibitors what the studios are proposing.  The studios are searching for ways to replace their lost DVD sales to internet streamers Netflix and Amazon - but this is a losing battle for them.  We are in the throngs of a massive change in the way consumers obtain their entertainment.  People want to be able to access content whenever they want, on whichever device they choose. Sitting home and watching a film for a one-time charge of $30 or $50 is not satisfying that need.

For their part, Lionsgate, Paramount, and Sony have been in discussion with the major U.S. cinema circuits on a new proposal. Disney, standing alone, has no interest in shortening the release window because their films tend to have long runs in cinemas and are of the size and scope that exhibit really well at cinemas with their large screens with big sound.

Under current Federal Anti-trust Law, the studios cannot negotiate (collude) together on a release window proposal.  They have to negotiate and reach agreement with each participating exhibitor.
So, no deal is imminent. Exhibitors are particularly concerned that movies are offered to consumers too early and at too low a price prodding them to stop visiting their local cinema.

Exhibitors are firm on one point. They want to be assured the studios agree to keep the release window for lesser films (non-blockbusters) at 90 days and that the current model of distribution be kept in place for between five to ten years.

Given the fact that at some point movies will be released day-and-date, and not be beat a dead horse, but exhibitors must, must have their movie presentations in top-order and use showmanship in connecting to the local community, selling concession, and promoting films. It's the only way they will survive.

All the best,
Jim