By partnering with AMC and Cineplex to make two low-budget horror films available in the home earlier than they would normally be, Paramount didn’t shatter the traditional release window — but it did find a way to crack it open a bit.
The deal is symbolically significant, even if it is unlikely to radically alter the business, because it represents one of the first times theater owners have agreed to a plan that impinges on their turf.
Under the deal, Paramount can push “Paranormal Activity: The Ghost Dimension” and “Scout’s Guide to the Zombie Apocalypse” to digital platforms as soon as 17 days after they leave most theaters, instead of the typical 90 days.
Of course, there was a carrot involved to lure exhibitors to the table: By offering the two chains a percentage of digital sales that take place during the standard three months the films would have been in theaters, Paramount gives exhibs a taste of the home entertainment pie.
“This gives them more flexibility,” said James Goss, an analyst with Barrington Research. “Once you get down to a few nearly empty theaters, exhibitors might as well show something else.”
It won’t be a model that works in all cases, Paramount execs stress. More than other genres, horror films tend to make most of their money in the first few weekends. But the partnership does seem to acknowledge the movie business has changed, and that smaller films may not need to linger in theaters.
Paramount vice chairman Rob Moore told Variety that after news of the pact leaked, exhibitors started asking if they could participate. He predicted more chains would embrace the initiative.
Things weren’t always so rosy. At last spring’s CinemaCon, theater owners were enraged that Paramount and MGM hadn’t consulted them before the VOD release of flop “Hot Tub Time Machine 2” just 46 days after its theatrical opening. “We said, ‘In the past, you haven’t seemed that open-minded,’ ” said Moore. “But they said, ‘We’re happy to talk about doing something different and whether the same model works for every movie.’ ”
The proposal lets the studio piggyback a film’s home entertainment debut on the promotional campaign for its theatrical run, potentially saving millions. For theater owners, analysts say there could be more money from profit participation than in tickets or concessions related to a fading movie. “The share they’re giving to exhibitors is equivalent to the amount they’d spend for advertising the video release,” said analyst Tom Adams, who expects other studios to follow Paramount’s lead.
But some in Hollywood fear the experiment sets a bad precedent. One senior exec at a rival studio argued it has the potential to get customers used to skipping theaters in favor of home viewing.
But “Paranormal” series producer Jason Blum sees the compromise as ushering in an era of cooperation. “Studios, producers and theater owners must work together to keep movies relevant in our culture amidst the rise of accessible HD T.V. sets, the ability to consume content on multiple screens and the incredible quality of original broadcast, cable and steaming television shows.broadcast, cable and streaming television shows,” he said.