Hollywood pushing to trim wait for home video
Studios, theater chains looking for ideal window
Confronted with dwindling home entertainment profits, major Hollywood studios are pressuring theater chains to let people watch new movies much earlier than usual.
Though details have yet to be finalized, most of the studios agree that they must come up with new ways to shorten the gap between a movie’s theatrical release and its home video debut, according to people familiar with the talks who were not authorized to speak publicly.
Such moves have previously sparked massive resistance from cinema operators, who feared that consumers would avoid watching movies on the big screen.
But major chains such as AMC and Regal are open to shrinking the so-called theatrical window.
The change would represent a significant departure from the way Hollywood has done business and highlights how rapidly shifting consumer viewing habits are forcing studios and theaters to rethink how they’ve operated for decades.
The main studios pushing the initiative — Warner Bros., Universal Pictures and 20th Century Fox — want customers to be able to watch select movies in their homes 30 to 45 days after they hit the multiplex, less than half the time it usually takes.
Consumers would pay $30 to $50 to watch the movies, and theaters would get a cut of the revenue from the premium video-on-demand offerings.
Such deals with the cinema giants are expected to come by the end of the year or in early 2018, people familiar with the talks said. Discussions have been going on for months, and both sides had hoped to make the changes much sooner, but the discussions have been slowed by competing interests.
Studios have been hard hit by declining home entertainment revenue and stagnating box-office revenue. Global box-office revenue leveled off at $38.6 billion last year, up just 1 percent from 2015. Annual home entertainment sales have fallen 50 percent to $12 billion in the last decade, gutting one of the studios’ key profit centers.
“Post-theatrical revenues are plummeting, so we have to figure out ways to make up that shortfall,” said Chris Aronson, head of distribution for 20th Century Fox. “There’s a lot of careful and thoughtful consideration going on, and I think it will ultimately bear fruit.”
Many consider the traditional 90-day wait to be an outdated act of withholding at a time when consumers are used to getting films and TV shows whenever they want on their devices. In fact, if people can’t get movies through legitimate online portals, they’ll get them illegally, studios executives argue.
“There is no doubt that absence does not make heart grow fonder,” said Megan Colligan, president of worldwide distribution and marketing for Paramount Pictures. “Withholding a movie after it’s run in theaters does not increase someone’s desire to buy it.”
Cinema owners have previously balked at attempts to shorten the theatrical window. A year ago, theater companies revolted at the Screening Room, a proposal by Napster founder Sean Parker to stream movies for $50 each while they’re still in theaters.
Paramount in 2015 released two low-budget horror movies early after they dropped below a certain number of theaters. But chains that were not part of the studio’s revenue-sharing deal with exhibitors refused to show the movies. The theater business infamously boycotted the release of Universal’s “Tower Heist” in 2011 after the studio made it known that it planned a truncated theatrical window for the film.
But several factors have now brought theater companies to the negotiating table.
Theaters are contending with greater competition from streaming services like Netflix and HBO Now, as well as high-quality cable shows and video games.
Movie theater attendance among teenagers — the next generation of hoped-for consumers — is falling. People ages 12 to 17 went to the movies an average of 6.1 times last year, down 16 percent from 2015, according to a report from the Motion Picture Assn. of America.