Jeffrey Katzenberg Predicts 3-Week Theatrical Window in Future

Jeffrey Katzenberg
Ethan Miller/Getty Images

DreamWorks Animation chief Jeffrey Katzenberg thinks the windowing model of feature films will become a “pay by the inch you watch.” During the Entrepreneurial Leadership in the Corporate World panel at the Milken Global Conference in Beverly Hills, Katzenberg explained what he thinks is the future of scheduling and distributing feature films.

“I think the model will change and you won’t pay for the window of availability. A movie will come out and you will have 17 days, that’s exactly three weekends, which is 95% of the revenue for 98% of movies. On the 18th day, these movies will be available everywhere ubiquitously and you will pay for the size. A movie screen will be $15. A 75” TV will be $4.00. A smartphone will be $1.99. That enterprise that will exist throughout the world, when that happens, and it will happen, it will reinvent the enterprise of movies,” he told the crowd.

And according to Katzenberg, this scenario will play out 10 years from now.

In the meantime, DreamWorks Animation is hedging its bets and diversifying its interests.

“Movies are not a growth business,” Katzenberg said — which is why he aggressively lobbied for DreamWorks’ new interests, primarily shortform, digital and television content.

Greg Maffei, president and CEO of Liberty Media Corp., a major distributor of programming including Discovery Channel, QVC, Encore and STARZ, agreed with Katzenberg, first noting that Liberty tried three times and failed three times to launch a movie division.

“Few networks are impacted (by technology) more than the media business,” he said, adding that the amount of “clutter” in the entertainment universe, including videogames and social media, directly affects and reduces the value of the more traditional channels, e.g., film.

Katzenberg also threw out the idea that young adults today should not follow passion but skill.

“Great leaders and thinkers talk to kids today and say ‘follow your dream.’ I’m not sure that’s a great idea. How about follow your skill? That thing you are really good at, that may become your passion,” he said.

The DreamWorks chief then documented how, in 1984, Michael Eisner pulled Katzenberg into his office on his first day at Disney. Just before Katzenberg was walking out, Eisner called him over to a window and asked if he knew what they did in the building across the way.

“That’s where they make the animated movies, and it’s your problem,” Eisner said to Kazenberg. “My problem became my passion,” Katzenberg said.

Barry Sternlicht, the chairman and CEO of Starwood Capital Group, and Tom Wyatt, CEO of Knowledge Universe U.S., were also on the panel.

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  1. My response to Mr. Katzenberg: Pay by the Size of the Screen? Not Likely | Digital Dorr http://bit.ly/1nMKd59

  2. Ben Parry says:

    This issue is flaws. How would one know the difference between 4k cell screen and 4k tv as final device for playback?

  3. tangledthorns says:

    Charging for a movie ticket by the size of the screen is an interesting idea. Though I think a movie ticket should be based on a film’s budget, $20 for a $200M big budget action film or $1 for a low budget $1M artsy film for example. I’d gladly pay more for a high budget film if I could save money on the lower budget films too. But what do I know, I’m just a guy that is going less to movies these days because of high cinema ticket prices.

  4. This has to be the most moronic idea in quite a while.

    Apparently Jeffrey hasn’t come out of the 80’s. Because screen size has been decoupled from actual resolution for a couple decades now, making this the most inane and imbecilic standard imaginable.

    Okay, both my phone and my 24″ computer monitor do 1920×1080 resolution. But I can pay less by watching it on my phone? Never mind that the bandwidth costs to push to either is identical?

    Had he talked about price differentiation based on resolution (SD (Standard Definition) /HD (High Definition) /SHD (Super High Definition) /etc), I could get behind that. HD and SHD have much higher storage bandwidth requirements for a streaming provider. So yes, a price premium is warranted, as it costs more to deliver.

    But a nonsensical “standard” like physical dimensions of a monitor/television/screen? Asinine. And worse, demonstrating a COMPLETE lack of understanding of his secondary markets.

    Worse, if this plan goes through, it could destroy profitability for a vast swath of movies.

    3 WEEKS in the theater and then streaming to the home? Sure, that’d be nice. But it won’t stop people from camming in the theaters, illegal or not.

    And worse, such a rigid schedule can deny very profitable releases from maximizing their ticket revenues. Maybe Dreamworks’ films trend this way (big up front but petering out fast), but many others simply don’t.

    The Avengers, under this scheme would have lost one hundred MILLION DOLLARS in ticket revenues in North America alone.

    Avatar would have lost at LEAST $300 million in foreign markets under this scheme, as it had SIX (6) consecutive weekENDS where it made $100 million and it would have failed to achieve multiple records (including it’s 1 billion and 2 billion dollar achievements).

    Sorry, but Katzenberg just doesn’t know what the hell he’s talking about.

    • justanotherguy123@hotmail.com says:

      I agree with a number of your points, however certainly not your revenue schedule examples – are you perhaps assuming that those movies were RELEASED in all markets at the same time?
      I suspect you may be in for a surprise if you check that one small detail.
      You also seem to be assuming, if your ‘lost revenues’ that people streaming are getting it for free. Do you think the owner of the movie will make more or less for a $4 stream than a $xx movie theater ticket? you may be surprised.

      • First off, I was talking SOLELY ticket revenues. Streaming or DVD/Bu-Ray revenues are something else ENTIRELY. With the release schedule suggested, anything that doesn’t do the majority of its ticket business in the first three weeks loses ticket revenues.

        And you simply can’t guarantee that the accompanying “small screen streaming” revenues are going to make up for it. Even so, this would still be analogous to the DVD/Blu-Ray second-market revenues. Not ticket revenues.

        And if you think this plan is going to somehow stop piracy…
        Well…I wouldn’t.

  5. This is idiotic. Maybe charging differently based on resolution (SD vs HD vs 4K) but to try to charge by screen size is stupid.

    And the Netflix/Hulu/Amazon model is here to stay. Best to try to figure out how to exist within it.

  6. What he meant to say is that DreamWorks intends to drive the sale of portable cell phone projectors through the roof!

  7. omar little says:

    What he meant to say is that DreamWorks Animation is not a growth business.

  8. FilmBuff says:

    It’s also worth noting that he makes these comments at a curious point in time. Currently, the domestic movie attendance (not box-office grosses) is up 11% from this time last year.

  9. Rufus says:

    Katzenberg doesn’t know anything. He’s just a suit. Not a visionary. Hence what Eisner said.

  10. Well, why not? The theatrical experience is just about dead anyways. Film presentation suffered for decades at the hands of mostly incompetent operators at many theaters, and now even that is gone in favor of “digital” which is harder to mess up but designed very short-sighted (scope movies are actually letterboxed in the digital frame and thus have a lower resolution!) On top of that, most theaters being built now have screens hardly bigger than the one in my living room, and the last great large theaters such as San Jose’s Century domes have been closing. (I’m sure LA still has plenty of great theaters, but not everyone lives there!)

  11. Yirmin says:

    Greed is what is killing movies. Stars, writers, directors and all the lot demand too much money for their services… studios give in… but then they have to recover those costs plus tag on a profit… so they increase their take on the ticket sales… but guess what, the local theater has no options for lower property taxes, or lower heating and air or lighting… he is stuck so when a studio says You give me 70% of the money you collect in tickets the theater is down to 30% of the ticket price and to make those payments has only one option, raise the ticket prices… and raise them and raise them until you get into a death spiral. Price go up but that drive away customers, but you still have to pay the bills so your only options is to raise prices again and drive away more customers.

    The interesting thing is even when you have a record year in terms of revenue at the box office in the US you have fewer people actually going to the movies. Remember the price of a movie in the golden age was so low that going to a movie wasn’t something that you had to struggle to afford….now it is a very expensive proposition. With the advent of TV and VCRs the movie studios should have made efforts to pull prices in theaters down to keep the market growing, instead they decided to simply squeeze out the last remaining dollars from a sick animal… the studios have killed the cash cow.

    How hard would it have been to have told those actors in the 80’s that they weren’t worth 20 million a picture, that they could be replaced by any number of cheaper options… had they been smart they could have thrived, instead they have pretty much doomed themselves.

  12. JackJ says:

    Remember that theatrical is still the only platform where they can charge per person.

  13. JSinTheStates says:

    Well, Katzenberg is the mogul, and he does have a point! However, Whedon has a vision as well, and his vision got his In Your Eyes movie to my HDTV for $5. And Whedon didn’t have to pay a studio $200 million for distribution!

    Cable TV is dead. Video discs are dead. Tablets are the future of computers (we now have DynaBooks). And everyone below the age of thirty is obsessed with Wi-Fi, cellular, and instant gratification. QED. Movie theatres are dead!

    If you’re not looking into the future, you’re living in the past!

    • Greg Bailey says:

      It’ll be a mix. Those predictions has existed for decades… radio would kill theater, movies would kill radio, TV would kill movies, computers would kill TV, etc. However, all those things are still here. New technologies adds to the media mix, though the delivery methods may certainly change.

      • Rob says:

        And, you can just hook your cell phone up to your t.v. and play it from there. C’mon man. Maybe, I should sell my movie theater and get out. This is ridiculous. People are still coming to theaters in droves. People that say the theater is dead are out of touch with this world. Until, they release them brand new on your tablets, theaters are very much alive. You know how much money they would lose if they released them brand new to your devices. Like this person said up here. 100s of millions of dollars. And Rich people do not like to get poorer.

      • dana says:

        Well said Greg, although what Katzenberg is saying is similar. He is not saying that “new media” (which is in-and-of-itself a passe term) will kill the legacy business’ like film/theatrical he is just saying that once big-screen tvs and tablets reach critical mass (they haven’t yet) it will fundamentally alter the business model in terms of distribution and economics of the entertainment industry – both of which have already started…

  14. Robbie says:

    You may just kill cinema, I saw The Winter Soldier last week and whilst it was good it wasn’t £25 good (2 adult tickets). This cost will now actively discourage me from visiting cinemas as it’s a luxury I can’t afford anymore, sure viewing at home is cheaper and further down the line will be always there but cinema is the one true love, no?

  15. Interesting view… although I suspect things may be away more different in 10 years.

  16. cadavra says:

    This would be the same Jeffrey Katzenberg who confidently predicted that 3-D would be the great savior of theatrical motion pictures.

    • therealeverton says:

      Unlike James Cameron he didn’t anticipate that greedy, short game playing, producers/studios will do their best to kill 3D at birth with cheap, quick, amazingly poo 3D conversions.

      However if anyone think that the rapidly increasing growth of international business is not largely fueled by 3D (especially in emerging markets) then they are seriously mistaken.

  17. Pete says:

    I believe this won’t happen because they want ppl to pay more for movies at the theaters. It is much more likely someone will skip a movie if they know in 3 weeks it will be out on video

  18. GKN says:

    Follow your skill. Excellent.

  19. Katzenberg is wrong…his suggested model is still based on old Hollywood paradigms and considers budgets will still be growing. Hollywood’s best chance in innovation is accepting all things digital but also decreasing budgets.

  20. Michael Anthony says:

    Perhaps it will happen as he says. Somehow I can’t help but believe that this is what the studios want, thus their predictions are their “business” plan for THEIR future.

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