While it’s cheery that domestic box office revenue is up 3.7% year-to-date, movie theaters are under threat of further encroachment of the video-on-demand window. In presentation to stock-market investors, the parent companies of Warner Bros. and Universal Pictures revealed they are in negotiations with theaters to shrink the customary 90-day exclusive window for theatrical.
A two-week window (24 days) is suggested. The major studios are not said to be discussing simultaneous VOD/theatrical (known as day-and-date), though independent distributors do for their more marginal films.
Deadline.com’s Anthony D’Alessandro writes outlines the issues of release-windows arm-wrestling by studio distributors and theater exhibitors. Another Deadline.com article, this one by David Lieberman, reports publicly-traded shares to exhibitors dropped last week amid investor concerns about shrinking exclusivity for movies.
As for my take, these are perilous times for exhibitors. Not only is a shrinking theatrical window a worry, but I keep hearing that virtual reality consumer electronics products will shortly sweep consumers. If home VR products connect with consumers, out-of-home movie-going will suffer to some degree. Further, theaters may have to invest in VR technology, which will be costly. That would be a double-whammy of audience drain and need for capital expenditures.
China’s Wanda Dalian is aggressively buying exhibitors — it owns AMC Entertainment in the United States and just wrapped the acquisition of Carmike — and thus expresses confidence in exhibition. Time will tell whether Wanda — the buyer — or selling exhibitors have the best handle on the future of cinema.
Says the third edition of book “Marketing to Moviegoers”: “Hollywood likes cinema release because it creates a marquee value for films that carries over to VOD, DVD and TV and because consumer consumption is limited to one view per ticket. And no other movie platform captures the collective experience of a group huddled in a darkened auditorium — who are Norma Desmond’s ‘wonderful people out there in the dark’ — sharing the laughs, the tears, and the widescreen spectacle of cinema. Moviegoing is further entrenched by theaters investing in big screens, crystal-clear digital sound, plush seats, and stadium-style seat placement with unobstructed sight lines.”
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