Directors urge majors to consider impact on exhibition biz

A new front has opened on the battle over premium VOD, this time within the creative community.

A clutch of 23 prominent directors and producers sided with exhibitors on Wednesday in questioning the wisdom of carving out a new premium VOD window for pics starting 60 days after they hit theaters. A press release titled “An Open Letter From the Creative Community on Protecting the Movie-Going Experience” was distribbed to media outlets by the National Assn. of Theater Owners Wednesday ayem. The letter is also published as an advertisement in today’s issue of Daily Variety.

The letter details a variety of concerns the creative community has that premium VOD could negatively alter consumer buying habits, exacerbate film piracy and severely limit the ability of theater owners to play specialty films in platform release patterns.

“You can argue about VOD windows all day long, but what you can’t deny is that there is an overwhelming outcry from the theater owners that they feel threatened by this,” James Cameron, who was among the signatories, said in the news release that accompanied the letter.

“The cinema experience is the wellspring of our entire business, regardless of what platforms we trickle down to. If the exhibitors are worried, I’m worried,” he said. “Why on earth would you give audiences an incentive to skip the highest and best form of your film?”

Producer Jamie Patricof, meanwhile, voiced the concerns of the indie film community.

“The theatrical window is a crucial component in bringing a film to the marketplace, especially for a smaller movie that relies on word of mouth,” he said. “If moviegoers assume they don’t have to go to the theater to catch something that has great word-of-mouth, they most likely will not.”

Others who signed the letter include Karyn Kusama, Michael Bay, Kathryn Bigelow, Guillermo del Toro, Roland Emmerich, Antoine Fuqua, Bill Mechanic, Todd Phillips, Brett Ratner, Robert Rodriguez, Adam Shankman, Gore Verbinski, Bob Zemeckis, Todd Garner, Lawrence Gordon, Stephen Gyllenhaal, Gale Anne Hurd, Peter Jackson, Jon Landau, Shawn Levy and Michael Mann.

The letter was issued as four of Hollywood’s majors — Fox, Sony, Universal and Warner Bros. — formally unveiled the premium VOD rollout on DirecTV, starting this week with the Sony Adam Sandler comedy “Just Go With It.” Earlier this week, Warner Bros.’ Kevin Tsujihara and Jeff Robinov made the first public statements about the plan to Variety, outlining the need to pursue additional revenue streams and the impetus to combat piracy by offering legal options for new releases (Daily Variety, April 19).

But exhibs have come out against the plan, with some threatening to not run trailers for pics are bound for the early DVD window.

“As a crucial part of a business that last year grossed close to $32 billion in worldwide theatrical ticket sales, we in the creative community feel that now is the time for studios and cable companies to acknowledge that a release pattern for premium video-on-demand that invades the current theatrical window could irrevocably harm the financial model of our film industry,” the letter states.

The letter casts doubt on the majors’ ability to maintain the $30 price point for premium VOD.

“What sells for $30 a viewing today could be blown out for $9.99 within a few years. If wiser heads do not prevail, the cannibalization of theatrical revenue in favor of a faulty, premature homevideo window could lead to the loss of hundreds of millions of dollars in annual revenue,” the letter states.

Reps for DGA, WGA and PGA declined comment on the VOD issue — which is no surprise given that the issue has provoked mixed reactions in the creative community. The participating studios also declined comment.

But an exec source at one of the four majors said that the studios have no plan to fluctuate on the $30 premium, because anything less could cannibalize the homevid market. Nor are there plans to go any earlier than 60 days, the source insisted. Like Tsujihara and Robinov, the source emphasized that the pics bound for the early VOD window are those that take in the vast majority of their B.O. within the first six weeks of release — and are often moved out of plexes or to second-run theaters before the 60-day window would kick in.

Still, the subject of altering release windows is always provocative for bizzers. Cameron and Phillips were among the first filmmakers to be vocal in their opposition after plans for the premium VOD launch began to coalesce earlier this year.

At the CinemaCon confab in Las Vegas last month, Phillips made his sentiments known. “I’m on (the exhibitors’) side on the video-on-demand issue,” he said. “If I had wanted to make movies for television, I would have been a TV director.”

NATO topper John Fithian said it was important for the creative community to weigh in on such a dramatic change in the fundamentals of the theatrical biz.

“The directors and producers we’ve talked to are passionate filmmakers and very informed business people who care deeply about their art and craft,” Fithian said. “All have expressed extreme concern over announced plans to shorten the distribution window, and stated their desire that films can be seen in the venues they were made to be seen in: movie theaters.”

Filed Under:

Follow @Variety on Twitter for breaking news, reviews and more