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Will Windows Winnow?: Path to Platforms Offer Risk of Pratfalls

More links than ever exist in the distribution chain for movies, but further changes won't come easily

Licensing theatrical movies to TV goes back more than a half century, but it’s suddenly a hotbed of change requiring strategic thinking.

New release windows have been carved out of the traditional sequential distribution chain — such as a pricey $30 premium video-on-demand typically accessible in hotel rooms before general VOD, as well as the later subscription VOD window occupied by Netflix and others.

As a result, movies have added more stops in their first-cycle sales, which complicate business for both sellers and buyers of films.

“Though every country is different, the shortening of each window is the most notable change that has occurred,” says Twentieth Intl. TV prexy Marion Edwards. “Everybody wants to move titles through the pipeline quickly. What we’ve tried to do is have a measured approach in our windows so we don’t have a dramatic change, even if the market is moving more quickly.”

Windows vary by territory, though the vast U.S. market is usually a bellwether. All eyes are focused on major studio films because of their high earning power and strong demand in each window. Independent films that sport less economic clout in the marketplace may skip some windows while also doubling up on others — eliminating the customary exclusivity — in order to cash in on opportunities.

Some pundits call for sweeping away the sequential timeline and replacing it with a simple everywhere-all-at-once approach, which eliminates the exclusivity that results from sequential distribution. While there are advantages, such as making piracy less attractive by not withholding from some windows, and hurrying up collection of what are now-downstream revenues — there are problems with simply blasting movies everywhere without segmentation.

Movies lose the allure of theatrical release. Eliminating an exclusive theatrical run throws Oscar consideration into jeopardy. And an all-windows-at-once setup mimics the beleaguered recorded music industry, which with its revenue steadily contracting globally from 1999 to 2011 hasn’t been a model of prosperity.

For theatrical films, more evolutionary changes can be expected from new buyers popping up and some incumbent buyers selectively bidding for quicker access.

“If you look down the road, it’s pretty clear that post 90 days after a film’s theatrical release, the sky’s the limit,” says JeffLogsdon, a West Coast media industry finance analyst. “Those buyers who are willing to pay studios for quicker, earlier access are going to get it.”

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