How new formats change the equation
Every time a new digital distribution format is introduced, it upsets the status quo for the system of release windows studios have used since the 1980’s to roll out their movies. Here’s a look at the new release timetable that has emerged in recent months.
Window 1: Theatrical Release (Release Date – Month 3)
Traditional theatrical runs average three months, allowing time for a worldwide rollout. But this first window has been getting shorter as distribs seek earlier DVD releases to save on marketing costs. They would rather spend once to promote a theatrical and homevideo release than launch two seperate campaigns.
Window 2: Video-On-Demand (Month 3 – Month 6)
With DVD and Blu-ray sales slowing, the majors feel there’s opportunity with a range of TV and digital VOD platforms to offer movies at a premium price before they reach the homevid sales and rental window. One studio is considering offering selected titles for $50 a month after their release in theaters, and $25 after two months. Other studios are flirting with day-and-date releases, raising the ire of theater owners.
Window 3: Home Video (DVD, Blu-ray and digital downloads) (Month 4+)
Once Hollywood’s cash cow, the homevid window flip-flopped during the down economy thanks to discount rentals from companies like Redbox and Netflix. Digital downloads on Apple’s iTunes, for example, are popular but haven’t made up for the decline (repping just 1% of studio earnings last year, vs. 35% for B.O., 31% for homevid rentals and sales and 29% for all TV platforms, according to Adams Media Research). Disney has begun to lead the charge to combat sluggish sales, bumping up the bow of the DVD for “Alice in Wonderland” from the traditional 17 weeks after the film hits theaters to 12 weeks. Sales were brisk, which has encouraged the studio to consider accelerating the DVD release sked for future titles.
Window 4: Digital Streaming (Month 5+)
Netflix and Redbox have slipped into this window, which was once the province of pay-per-view via cable operators, with their recent deals with the majors, but the release dates vary. Warner Bros., Universal and Fox require that Netflix and Redbox wait 28 days until after a title bows on DVD. Paramount, Lionsgate and MGM all allow rentals the same day the films hit homevid. Netflix recently pacted with Relativity to offer Web streaming of titles in this period.
Window 5: Pay TV (Year 1)
Pay TV encompasses premium channels like HBO, Showtime, Starz and Epix, which can lock down titles for 18 months a year after their theatrical run. But Netflix has moved into this window with its deal with Epix for streaming rights to films from Paramount, Lionsgate and MGM 90 days after a title premieres on the channel. Netflix also has a deal with Starz to stream pics that Starz licenses through output deals with Disney and Sony. HBO has its own streaming service for its original content and films from Warner Bros., Universal and Fox.
Window 6: Broadcast network and basic cable (Year3+)
Films run on broadcast nets and basic cable channels three years after their theatrical debut. Broadcast nets once had the first shot at this window, but now that they run so few theatrical pics in primetime, cablers have been aggressive in buying out what was once considered the broadcast window. Following this network/basic cable window, film packages are offered to local broadcast stations in syndication.