×
You will be redirected back to your article in seconds

Studios Flirt With Offering Movies Early in Home for $30 (EXCLUSIVE)

Six of the seven biggest Hollywood studios are continuing to push to offer movies in the home mere weeks after their theatrical debuts.

However, the companies, particularly Fox and Warner Bros., are showing greater flexibility about timing. Initially, Warner Bros. CEO Kevin Tsujihara had kicked off negotiations with exhibitors by offering to cut them in on a percentage of digital revenues if they agreed to let them debut films on-demand for $50 a rental some 17 days after they opened. Currently, most major movies are only made available to rent some 90 days after their release. Some studios offer films for sale electronically roughly 70 days after their bow in theaters.

Other studios, particularly Fox and Universal, felt that $50 was too steep a price to ask consumers to pay. They are now trying to get exhibitors to agree to a plan that would involve a lower priced premium on-demand option that was made available at a slightly later date, according to three studio insiders and two exhibition insiders. Fox and Warner Bros., for instance, are considering making films available between 30 to 45 days after their opening, but at $30 a rental, a price they believe won’t give customers sticker shock. Universal, which is seen as being the most aggressive negotiator in these talks, would like the home entertainment debut to remain in the 20-day range.

Studios are looking for ways to shore up home entertainment revenues as DVD sales continue to slide. They also believe that their advertising can be more effective and cost efficient if a film’s home entertainment release is closer to its theatrical debut. By grouping those two things closer together, studios wouldn’t have have to launch a massive promotional campaign to reintroduce consumers to a movie months after it was on the big screen.

Then there’s the issue of shifting consumer tastes. Younger consumers, used to streaming services such as Netflix, are accustomed to being able to access content whenever and on whichever device they would like — they’re not used to having to wait months to watch something.

Lionsgate, Paramount, and Sony have also been talking with a group of exhibitors that includes AMC, Regal, and Cineplex. Disney is not interested in shortening the release window, the industry term for the amount of time a film runs exclusively in theaters. That’s unsurprising because Disney releases Marvel, Star Wars, and animated movies that tend to have long runs in theaters and have a size and scope that tends to work well on the big screen.

Because of anti-trust laws, the studios cannot work together to sign deals. They have to reach agreements with each participating chain on an individual basis. The talks have been going on for over a year, and are still very much in flux, insiders caution. Many issues have to be resolved before a final pact is in place.

Further complicating the picture is the fact that there are a number of different models being circulated.  Some studios, for instance, are weighing a scenario where movies could be made available for rental at a higher price as soon as they dip below a certain number of screens. The thinking is that it doesn’t make sense for a movie to stay exclusively in theaters if it isn’t being widely shown.

Universal would like all of its films to be released on premium video-on-demand early, but other players like Warner Bros. and Fox seem more amenable to having a different release pattern for different movies. In that kind model, bigger franchise films that tend to have longer runs in theaters might be held back from release on demand.

No deal is imminent. Theater owners are engaged in the talks, and they’ve spent million of dollars researching consumer behavior. They’re particularly concerned that if movies are offered to consumers too early and at too low a price they will stop showing up at the cinema.

Sony is very early in its discussions, but it would be in favor of an early on-demand debut that’s somewhat later than the one being floated by the likes of Universal and at a higher price point.

Exhibitors are firm on one point. If they agree to shrink the amount of time they have exclusive access to movies then studios must agree to keep the window for lower priced rentals and copies of movies at roughly 90 days. Those movies typically cost between $3 to $6 a rental and in the range of $20 for a disc or digital copy. Exhibitors want studios to make a pact not to try to alter the traditional home entertainment distribution model  for between five to ten years.

More Film

  • The-Ancient-Law

    Lumière Festival’s MIFC Broadens International Spotlight with Focus on Germany

    The 7th Lumière Film Festival’s International Classic Film Market (MIFC) is expanding its international scope this year with more foreign companies than ever before taking part in the event, high-profile guests and an examination of Germany’s heritage cinema sector. With 17 international firms from 25 countries at the event, the MIFC has reported a 20% [...]

  • US actor Donald Sutherland poses for

    Donald Sutherland Reflects in Lyon On A Life And Career Marked By Cinema

    In a loose and free-flowing on-stage interview held at the Lumière Festival this past Sunday, Donald Sutherland reflected on his decade-spanning career with a tone that mixed personal irreverence alongside genuine veneration for the art form that brought him this far. “I love filmmakers, I really do,” said the Canadian actor, who delighted the local [...]

  • Terry Back chairman ACF

    Veteran U.K. Media Investor Terry Back Joins ACF as Chairman

    CANNES — Veteran U.K. film industry investor Terry Back has joined ACF investment bank as chairman. ACF, headed by CEO Thomas Dey, has been at the forefront of the M&A activity around independent TV and film production outfits, mostly in the unscripted TV arena. ACF is in the midst of expanding its activities in the [...]

  • Joker

    Korea Box Office: 'Joker' Remains on Top, 'Gemini Man' Lands in Fourth

    Warner Bros.’ “Joker” remained on top of the South Korean box office in its second weekend. The American psychological thriller earned $5.71 million from 768,000 admissions between Friday and Sunday, for a total of $28.3 million from 3.85 million admissions after two weekends. It accounted for 46% of total weekend box office in the country. [...]

  • dolittle-DRD_Tsr1Sht_1011_RGB_4_rgb-1

    Robert Downey Jr. Embarks on Perilous Journey in First 'Dolittle' Trailer (Watch)

    Robert Downey Jr. is setting sail with some furry friends in the first trailer for “Dolittle,” Universal Pictures’ reimagining of the classic story about a man who could speak to animals. “We have no choice but to embark on this perilous journey,” he says. Set to a rendition of Louis Armstrong’s “What a Wonderful World,” [...]

  • Parasite

    Bong Joon Ho's 'Parasite' Posts Powerful Opening in North America

    Bong Joon-Ho’s dark comedy “Parasite,” which won the Palme d’Or at the Cannes Film Festival, has launched with a spectacular $376,264 at three U.S. theaters.  Neon opened “Parasite” at The Landmark and Arclight Hollywood in Los Angeles and at the IFC Center in New York, where it broke the opening record set by 2014’s “Boyhood.” Its per-screen average of [...]

More From Our Brands

Access exclusive content