Universal and Warner Bros. are having discussions with theater chains about possibly limiting the amount of time between a film’s theatrical release and its debut on home entertainment platforms.
Bloomberg first reported that studios had engaged in talks with exhibitors about shortening the period of time in which films are exclusively on the big screen. The studios are looking for ways to bolster home entertainment revenue, which is suffering from an 18% decline in DVD sales. The talks are the clearest sign yet that windowing, the industry term for the amount of time a film is in theaters, is going to be hotly debated in the coming months and that a major change in release patterns could take place as early as next year.
Spokespeople for Warner Bros. and Universal confirmed that the studios are having discussions with theater owners about shortening release windows, but offered no additional comment. In a presentation this week at the Credit Suisse conference on technology, media, and telecom, Warner Bros. CEO Kevin Tsujihara said that he was having “constructive conversations” with the exhibition community.
“If you start with the consumer, they’re telling us very clearly they want it [earlier],” he said. “That’s where all the pirating is occurring, right? And so we have to meet that demand with a legal solution. And so as I’ve said, we’re trying to work with our partners on the exhibition community.”
The studios have yet to determine whether or not the films will be just higher-priced rentals or will be available for purchase. Bloomberg reported that the time frame being weighed is two weeks to a month and that the price being considered is between $25 and $50. Insiders say that the price is likely to be on the higher end of that range and that a month delay between a film’s theatrical opening and its home entertainment bow is the most likely scenario. Theater owners would get a cut of the revenue in exchange for agreeing to the new windows.
Getting theater owners on board could be a challenge. In 2011, exhibitors were up in arms after news broke that several studios had a deal with DirecTV to rent several releases eight weeks after they landed in theaters. A plan to offer “Tower Heist,” a 2011 Eddie Murphy comedy, on demand for $59.99 some three weeks after its debut was scuttled by Universal after theater chains threatened to boycott.
It’s not clear if other studios are also having discussions with theater owners. One major player, Disney, is not involved in this push to shrink windows. That makes some sense, as Disney has emphasized making tentpole films such as “Star Wars” and “The Avengers,” that tend to do sizable business in theaters.
The issue of windowing was reignited earlier this year after Variety broke the news that Screening Room, a startup from entrepreneurs Sean Parker and Prem Akkaraju, wanted to offer new releases for $50 in the home at the same time as they open in theaters. As part of their pitch, the company would give users access to an anti-piracy-equipped set-top box that transmits the films and will give customers 48 hours to watch the movies.
Screening Room has not factored heavily into these latest talks with exhibitors, insiders say. Part of the reason is that the studios are not interested in giving one platform exclusive rights to content. They want the films to be available on iTunes and other retailers.