The L.A. Timesreports on NATO's efforts to build allies on Wall Street and in Hollywood to preserve the theatrical release window:
The nation's largest theater chains have been reaching out to investors and analysts on Wall Street, as well as directors, producers and agents, in an effort to build support for preserving so-called theatrical windows — the period of time between when a movie opens in cinemas and when it comes out on DVD or other media.
The outreach is in response to statements by media executives touting plans to offer movies in the home via video on demand at a price of $30 to $60, one to two months after they are released in theaters.
Premium-priced VOD is foreseen as a new revenue source for studios looking to offset declining DVD sales, as well as a boon for cable companies that have been stymied in their efforts to deliver movies into the home earlier in part because of concerns it could cannibalize home video sales.
But theater companies contend that the VOD plans will undercut movie ticket sales, giving consumers less incentive to trek to the theater if they can wait a few extra weeks to watch the movie in the comfort of their home.
"A 30-day window makes absolutely no sense to us whatsoever," said Gerry Lopez, chief executive of AMC Entertainment, the nation's second-largest theater operator. "We're concerned about the grave consequences this could bring."
Theater owners say Hollywood is casting about for ways to defeat piracy, and make up for plummeting DVD sales and rentals. According to Patrick Corcoran, a spokesman for the National Association of Theater Owners, the studios' PVOD plans aren't going to help solve the problems.
"We understand that the studios have a problem in the home market," Corcoran said. "It's down, like, 13 percent when you look at DVD sales and rentals. We understand they need to fix that, and we're all for them experimenting. What we're not for is their importing those problems into the theatrical window."
In regulatory filing today, the Motion Picture Assn. of America, the chief lobbying group for the major studios, restated its support for a waiver of current Federal Communications Commission rules that would clear the way for a technology that would allow consumers to watch movies at home close to or during their theatrical release. The so-called selectable output control technology would prevent the illegal copying of movies, which has been a major stumbling block to delivering first-run movies directly to consumers.
"Many of us love movies, but we just can't make to the theater as often as we'd like. That is especially true for parents of young children, rural Americans who live far from the multiplex and people with disabilities that keep them close to the home,'' MPAA Chairman and CEO Dan Glickman said in a statement. "Having the option to enjoy movies in a more timely fashion at home would be a liberating new choice."
This is actually not new. The initial MPAA request for the SOC waiver was made last summer. NATO filed comments with the FCC opposing the plan. The MPAA recently stepped up its campaign for the waiver and made a very public case for it today in a press release explaining its reasoning.
National Assn. of Theater Owners prexy John Fithian said his org is opposed to the MPAA's request because of the windows issue and not because of the antipiracy technology. He said it is disconcerting that the MPAA hasn't said exactly when a movie would be made available.
"We do oppose an undefined model of early release to the home. We want to know how early these movies are going to be released," said Fithian, who is meeting with the FCC this week on the issue.
Over at Deadline Hollywood, Nikki Finke looks at the story with typical restraint.
The L.A. Times is reporting that Sony has agreed with theater owners to hold off on releasing the DVD for the Michael Jackson concert documentary, This Is It, until after Christmas.
Sony Pictures desperately wanted to release the DVD of the Michael Jackson concert movie "This Is It" for the holiday shopping season, but backed down after movie theater owners balked that it was too soon following the film's theatrical premiere.
"This Is It" opened in 99 countries yesterday and is scheduled for a limited two-week run, though the studio may extend that depending on ticket sales.
Sony had hoped to capitalize on audiences' heightened interest in what turned out to be Jackson's final performance by releasing the DVD in mid-December, about a month after the movie ends its short time in theaters. The disc is now expected to come out in late January or early February.
As noted in recent posts here, the theatrical release window is a question of considerable concern for theater owners. Negotiations between studios and theater owners can become quite intense.
"We felt we made a pretty good case as to why this movie was different," said Jeff Blake, vice chairman of Sony Pictures Entertainment, who oversees worldwide marketing and distribution.
However, the movie theater owners refused to budge.
"We had several conversations with Sony and so did our members," said John Fithian, president of the National Assn. of Theatre Owners, an industry trade group. "Anytime we see the window go under three months, we alert our members and raise concerns with the studios."
After hearing complaints from executives at several of his member companies, Fithian said, "I raised a general concern with Sony about the extraordinarily short window."
After talking with theater owners, Sony, whose DVD releases on average come out four months and four days after a movie's theatrical run, reluctantly decided to back off from its request in order to preserve good relations with them.
"We didn't want it to be an issue," said Blake. "At the end of the day, we wanted a big theatrical run and they certainly stepped up and supported that with 6,000 screens in 3,481 theaters."
However, the Sony executive acknowledged that he was sorry the studio didn't get what it it wanted. "It would have made a big financial difference to us," he noted.
This Is It grossed $2.2 million in late Tuesday night debuts. Wednesday grosses have been estimated anywhere from $8-10 million. Offical numbers are expected from Sony later today.
Following up this post, Variety reports that Paramount is widening the release window on The Goods: Live Hard Sell Hard.
In an effort to assuage exhib concerns, Paramount did agree to push back the DVD launch of Jeremy Piven laffer "The Goods: Live Hard, Sell Hard" from Nov. 11 to late November. Had the release date stayed the same, "Live Hard" would have come out only 12½ weeks after its Aug. 24 release.
Although, Paramount did not move the disputed G.I. Joe DVD release - a skinny 88 days - it did assert that the narrow window was an exception, not a policy.
Par, besieged with calls from angry theater owners, held a number of discussions with exhibs. Studio told exhibs that "G.I. Joe's" DVD launch was timed to the release of Hasbro's corresponding toy line for the holiday season, and that it was the best thing for the franchise.
Given that DVD revenues have been down the last two years and continue down an estimated 13.9% this year, while theatrical box office has set records the last two years and is on pace to set another record this year, it isn't surprising that distributors are sending movie theater owners some love.
"I think ultimately, Paramount remains committed to separate DVD and theatrical windows, and completely committed to protecting the moviegoing theatrical experience," Paramount vice chair Rob Moore said.
Paramount's recent move to schedule two DVDs for release less than three months after their theatrical openings has renewed hostilities between Hollywood studios and movie theater operators.
Last week, Par scheduled its summer action hit "G.I. Joe: The Rise of Cobra" for a Nov. 3 debut on shiny disc, or 88 days after its release in theaters. It also set the Jeremy Piven comedy "The Goods: Live Hard, Sell Hard" for DVD release Nov. 10, also 88 days from its theatrical bow.
The article goes on to note NATO's release window tracking reports, which are available here. Our last report covered films with announced home release dates through September 25. The article gives our updated numbers through October 12.
Needless to say, exhibitors are not shy about expressing their opinions.
"I view the studios as our partners, but it seems like the rules of the game are changing," Cineplex chief Ellis Jacob said. "That's a concern. We at Cineplex have invested a lot of money in our theaters and in new technology such as 3D. So when something like this happens, it creates an issue with people from the standpoint of entertainment choices. If a guest of ours knows a movie is going to be on DVD in less than 90 days, then they know that if they miss it they can catch it on DVD not too much later."
Regal's president, Greg Dunn, made his company's views clear.
"Maintaining the appropriate timeline or windows between the theatrical release and ancillary markets is critical and essential for the overall good of the film industry," Dunn said. "If the existing windows policies were significantly adjusted, we would aggressively respond -- as we would toward any policy that would negatively impact the industry."
The Reporter's Carl Diorio got no on-the-record responses from Fox or paramount.
NATO announced today the hiring of Mitch Neuhauser as Show Manager of its official convention, slated to kick off in March 2011. Neuhauser begins work September 14.
The veteran of managing ShoWest, ShowEast, Cine Asia and Cinema Expo collected nothing but praise on the announcement of his employment.
Bruce Snyder, president of domestic distribution, 20th Century Fox Film Corp., said, “That's a no brainer, get Mitch Neuhauser to run the show for NATO and you can't go wrong. He gets two thumbs up from this office.”
“On all points: strategy, planning and execution,” Mark Zoradi, president of Walt Disney Motion Picture Group said, “Mitch has done an outstanding job, he has my full support in leading your new team.”
Andrew Cripps, Paramount president of international distribution said, “Mitch has excellent communication skills, is a very good manager, works with us tirelessly and never lets anything faze him, despite seemingly odd requests that we do throw his way.”
ShoWest 09 marked a change in programming. Monday has in recent years been "International Day," but with the increasing interconnectedness of the industry, it no longer made sense to separate out the international programming. Hence, Monday became the official opening day instead of the traditional Tuesday.
Fox's Jim Gianopulos kicked off the Opening Day luncheon with an overview of the health of the exhibition industry:
Gianopulos' Keynote Address was a speech laced with charts and graphs showing how the theatrical moviegoing experience continues to grow despite the recent economic upheaval and recession. He noted that despite the dramatic increase in home technology like HD televisions and Blu-ray, those who own five or more pieces of home theater technology are still more likely to go to the movie theater every weekend than less. He mentioned that movie attendance continues to be the #3 choice for most people going out for their entertainment and that it made up a larger audience of those going to sporting events, Broadway theater and other activities, which tend to be more costly. International growth was also a large factor, noting that North America made up roughly half of the over $18 billion grossed at the box office worldwide in 2008, and that there was a lot of room for growth.
A picture of James and the Giant Graph is here. A chart showing how people who use 5 or more home entertainment technologies go to more movies is here and another one showing what the inside of my brain looks like is here.
Moderated by G. Kendrick Macdowell, VP, general counsel and director of government affairs at NATO, the panel featured two studio execs who have pledged support in the form of virtual print fees to individual exhibitors. Mark Christiansen, executive VP of operations at Paramount Pictures, deemed his studio’s plan “incredibly easy…something you can do now.” But Fox exec VP of digital exhibition Julian Levin, who is also reaching out to individual cinema owners, bluntly criticized the streamlined Paramount offer document as having “a lot of holes,” contrasting the Fox approach as that of “a grown-up business.”
Even more contentious was exhibitor George Solomon, CEO of Southern Theatres. Dismissing the role of third-party integrators like Cinedigm and Digital Cinema Implementation Partners, he declared, “I believe that mid-size circuits should be able to negotiate virtual print fees directly or have their own consortiums… I don’t believe in giving a cut to an integrator.”
The plain-speaking Solomon, whom Macdowell at one point compared to a crafty Southern lawyer, proved not much of a champion of the digital revolution. “35mm is still better,” he contended. “What’s the difference between a hard drive and 35mm film? Forty pounds!” Arguing that the benefits of digital accrue mainly to the studios, he challenged, “If distribution wants 2K, give us the money!”
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