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The span between a movie’s theatrical debut and home- video release is likely to get shorter— as soon as this year.
As movie theaters and studios converge this week in Las Vegas for an annual gathering, the looming change to the industry will be heavy on executives’ minds. Theater chains have long resisted the idea of letting studios release movies direct to consumers any sooner than 90 days after the films arrive in the cinema plex, but reality is starting to set in.
In 2016, DVD sales fell nearly 10 percent to $ 5.49 billion, according to the Digital Entertainment Group, but the overall home- entertainment industry grew 1.4 percent, thanks to streaming and digital sales. Studios get a higher profit margin from digital sales and would rather make their films available sooner rather than letting them linger in theaters for weeks making diminishing returns. A shorter window could also help save on advertising spending, eliminating the need for a separate campaign for home rentals.
One answer is charging viewers a higher fee for a chance to see amovie at home just a fewweeks after its theatrical release— what’s called a premium on- demand window. Among the major studios, Universal Pictures, Warner Bros. and 20th Century Fox have been the most publicly vocal about this approach. Executives have floated rental prices from $ 25 to $ 50, according to people familiar with the matter.
“Our stance here is that we believe theatrical windows are set to change in 2017,” Robert Fishman, senior associate at Moffett-Nathan son said in an interview .“We’ re just waiting for the announcement at this point.” He estimates the parties will eventually settle on a $ 30 rental fee.
AMC Entertainment Holdings Inc., Regal Entertainment Group and Cinemark Holdings Inc., the largest theater owners in the U. S., have said publicly in recent months that they are open to talks with studios about creating a PVOD window. In previous years, exhibitors have thwarted experimentation by studios by boycotting their movies. But the theater chains recognize the pressure on studios is too great and are now trying to cut the best deal they can for themselves, Fishman said.
The industry has had a strong start to the year in North America, with movies such as “Beauty and the Beast,” “Logan” and “Kong: Skull Island” faring better than expected. Last year, box office revenue in the U. S. and Canada grew2 percent to $ 11.4 billion, even with attendance flat, according to the Motion Picture Association of America. But big- budget movies are still risky ventures, with heavy promotional costs, so studios are looking forways to eke out more profit.
Apple has also been pressing for earlier access for movies, which could help its iTunes download store stand out in a crowded online market.
Several obstacles still stand in the way of the PVOD window. In addition to price, studios and theater chains have to work out the length of the wait for home video.