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‘Alice’ truce is just the beginning

Studios planning for shorter windows from theaters to DVD

In 1983, U.S. exhibitors were so angered over Universal releasing “Pirates of Penzance” simultaneously on the bigscreen and pay per view that only 92 theaters played the film.

Fast forward 27 years: Disney and exhibitors have just brokered a brief cease-fire over “Alice in Wonderland” in what’s still likely to be a long war over release windows.

At least that’s the expectation that many in town have regarding the impact of Disney’s stated policy to release two films a year earlier than the norm on DVD, beginning with 3D tentpole “Alice.” That pic will come out on homevid three months after its March 5 theatrical bow, vs. the current standard of four months.

The four-month window has been in place for years; As recently as five to 10 years ago, the window was six months.

Several exhibs in various European territories agreed late last week to Disney’s plan on “Alice” — including major U.K. exhib Odeon, which had until Feb. 24 threatened a boycott — opening the door for other majors to do the same with their bigger titles. “It certainly makes things easier for us,” says one studio distribution topper.

Publicly, studios and exhibs are downplaying the importance of Disney’s “Alice” victory, saying they’re only talking about two titles a year. But between the six majors, that adds up to a dozen or more studio titles annually — more if indies are included. And it could be more than two films for studios who release 18 or 20 titles a year.

For now, the discussion is strictly limited to the DVD window, but digital delivery windows will increasingly become more of a factor. Disney and Sony have said they’d like to offer movies on VOD at a premium charge even before a film’s DVD debut, but no circuit is likely to allow that anytime soon.

So why the softening among circuits, despite the worry that they could lose traffic if a film is going to be quickly available on DVD?

One reason is that films are playing for shorter theatrical runs. Other key factors: Insiders say it took a big title like “Alice” to redraw the line. No exhib wanted to risk a poor quarterly earnings report because they’d passed on screening “Alice,” whose commercial prospects appear bright, particularly with the upcharge for a 3D ticket. (After initially threatening a boycott, U.K. exhib Vue specifically cited its shareholders’ interests when it backed off on its rhetoric and agreed to play the film.)

It’s easy for exhibs to pass on independent films pushing shortened windows, as when Mark Cuban’s company released Steven Soderbergh’s “Bubble” day and date in theaters and on VOD. IFC and Magnolia continue to do day-and-date theatrical/VOD releases, though the indie titles often play mainly in the distribs’ own theaters.

Also, execs on both sides of the debate say theater owners are sympathetic to the economic pressures studios face from the collapse of the DVD market. Circuits don’t want these pressures resulting in fewer movies being produced.

“They want to be part of the process. It’s better to bend than be brittle and break,” one veteran exec says.

Studios are hoping to wring more DVD sales out of shortened windows for select titles, after disc sales went into a freefall when the economy collapsed in 2008.

Studios also say they can save on marketing costs by overlapping their DVD and theatrical campaigns.

And the majors say more flexibility will allow them to better time DVD releases to specific dates, such as holiday and vacation periods. They have, for instance, avoided opening bigger titles in September because the film’s DVD won’t come out in time for Christmas. Disney wanted to release “Alice” before June, since DVD sales slow during summer.

Theater owners have long urged studios to release their bigger titles year-round instead of clumping them in summer or over holidays.

And U.S. circuits still want each studio, including Disney, to abide by an average window of four months, meaning some of their films could be released earlier than four months and some later.

Over the past several years, exhibs have quietly been giving studios their OK to release smaller titles on DVD early, particularly films that have come and gone quickly at the box office. Event pics like “Alice” have largely been off limits, although Paramount persuaded theater owners last fall to go along with the early release of “G.I. Joe: The Rise of Cobra.” (Early is considered to be anything 90 days and under.)

Disney hasn’t announced when “Alice” would be available on VOD or streaming services. Many big releases from Warners, Sony and Summit are available day and date on VOD and DVD, while other studios wait a few weeks for VOD.

Some rival studios were surprised at the ease with which U.S. exhib chains signed onto Disney’s plan. Insiders say Disney’s cause was aided by bringing U.S. exhibitors into the discussions early on. By contrast, a number of exhibs last fall pulled Sony’s “Cloudy With a Chance of Meatballs” when the studio announced an early DVD release, saying they felt blindsided.

Disney also offered repeated assurances that early DVD releases weren’t a blanket policy; They only intend to do so with two titles a year.

There was a hiccup when Disney topper Bob Iger — Hollywood’s most vocal proponent of shortened windows — raised the issue during an earnings call with investors. Some exhibs took this to mean that Iger was indeed in favor of collapsing windows entirely.

The next day, newly installed Disney prexy of distribution Bob Chapek issued a statement saying Disney was committed to preserving the theatrical window.

Overseas was another matter. Circuits in the U.K., the Netherlands, Belgium and Italy reacted strongly to Disney’s proposal to shorten the theatrical window on select titles and threatened to pass on “Alice.”

Both Odeon and Vue said they’d boycott “Alice.” They relented after round-the-clock negotiations, including commitments from Disney that it wouldn’t advertise the DVD until at least six to eight weeks after the film’s theatrical debut.

Vue announced early last week that it would carry “Alice.” By the next day, Odeon was facing under enormous pressure via the press over its decision to boycott the film. The Guardian even ran a poll asking readers what they thought.

By week’s end, Odeon dropped its opposition and said it would play “Alice” in the U.K., Ireland and Italy, the three territories where a boycott had been threatened.