×
You will be redirected back to your article in seconds

Studios Expected to Push for Early Home Release in 2019 (EXCLUSIVE)

Hollywood may want to brace itself for another epic fight. At least two major studios — Warner Bros. and Universal Pictures — are expected to reignite discussions about early video-on-demand, sources tell Variety, a move that could lead to a protracted standoff with theater chains.

For the past decade, no issue has incited bigger battles than that of theatrical windowing, the industry term for the length of time a movie appears exclusively in cinemas. Studios argue that they need to be able to release films on home entertainment platforms earlier as a way to combat piracy and capitalize on expensive advertising campaigns publicizing a picture’s debut in theaters. Exhibitors counter that a shorter window could cannibalize ticket sales and encourage consumers to skip the multiplexes, and wait to see a movie when they can rent or buy it. As it currently stands, most theatrical releases are not available in the home until roughly 90 days after they premiere in multiplexes.

In 2017, studios and major theater chains were close to reaching a grand bargain, one that would enable distributors to release movies on-demand within weeks of their theatrical debuts. As a carrot, exhibitors were promised a percentage of the profits from films rented or sold during this period. At the time, every major studio except Disney was engaged in some form of talks. However, negotiations stalled out and were abandoned when Disney announced plans to buy the bulk of 21st Century Fox’s film and television assets. That took one major advocate for collapsing windows off the board, weakening studios’ leverage. Compounding issues, Warner Bros., another supporter of shorter windows, had to deal with larger corporate issues as it waited for its former parent company, Time Warner, to be sold to AT&T.

However, the AT&T-owned Warner Bros. remains intent on releasing movies in homes earlier and is expected to re-engage theater owners in discussions at some point in 2019. The same scenario is expected to take place with the Comcast-owned Universal Filmed Entertainment Group whose chairman Jeff Shell is an outspoken proponent of a shorter window. Other studios may follow suit if Warner Bros. or Universal look to be making headway.

John Fithian, the head of exhibition industry trade group the National Association of Theatre Owners said no talks are currently taking place.

“This does not jive with anything I’ve heard,” he told Variety.

Theater owners believe that if windowing becomes an issue, they have the upper hand. Once Disney owns Fox, they will have gained an outspoken defender of traditional release strategies. The combined studios will boast the “X-Men,” “Star Wars,” “Avatar,” and “Avengers” franchises, and were responsible for over 40% of the domestic market share. Disney has yet to announce how it plans to integrate Fox into its operations, but it has signaled to theater owners that Fox Searchlight, the company’s indie label, will continue to release movies in theaters. Past Searchlight releases include Oscar winners “The Shape of Water” and “Birdman.” Without Fox pushing to trim the windows, Universal and Warner Bros. may find that they don’t have enough product to push exhibitors to compromise.

Publicly, Disney CEO Bob Iger has been a vociferous ally of the exhibition business. “We have a studio that is doing extremely well and a [release window] formula that is serving us really well in terms of its bottom line,” he said on the company’s most recent earnings call.

However, rival studios feel that Disney is being somewhat disingenuous. As the company prepares to launch its streaming service, Disney+, it is lining up several movies with healthy budgets that will forgo a theatrical release. They include a live action remake of “Lady and the Tramp,” the Anna Kendrick comedy “Noelle,” and another version of “The Sword in the Stone.” These are the kinds of movies that other studios would welcome on their slate, even though they lack the heft of an “Avengers” or “Star Wars” sequel. These studios privately gripe that Disney is ignoring the windows when it suits them.

Fithian disagrees. “Straight-to-video meant something back in the day and straight-to-streaming means the same thing today,” he said. “It’s fine to release movies to the home, but we hope that quality movies that have the chance of doing substantial box office will continue to be released in theaters. We have confidence that Disney is going to respect the theatrical window.”

Universal and Warner Bros. have their own reasons for wanting shorter windows. WarnerMedia, the new name for AT&T’s entertainment assets, is launching its own streaming service in 2019, and Comcast is widely expected to delve more deeply into the world of digital video. To be successful, these companies will need to offer premium content to customers and making theatrical releases available earlier to subscribers could be critical.

Spokespeople for Warner Bros., Universal, and Disney declined to comment.

RELATED VIDEO:

More Biz

  • Barron HiltonBarron Hilton 1990

    Famed Hotelier Barron Hilton Dies at 91

    Barron Hilton, a famed hotelier who helped expand the Hilton Hotels empire and a founding owner of the Chargers NFL football team, has died, the Conrad N. Hilton Foundation announced. He was 91. “Today the world of hospitality mourns for one of the greats. Barron Hilton was an incredible family man, business leader and philanthropist. [...]

  • Patrick Whitesell and Ari Emanuel WME

    Endeavor Targets Sept. 27 for Stock Debut, IPO Video Tells Company's Origin Story

    After years of preparation, Endeavor is set to make its formal Wall Street debut on Sept. 27, when its stock will begin trading on the New York Stock Exchange. Endeavor has targeted Sept. 26 for the final pricing of its shares. The stock will trade publicly the following day. Earlier this week, Endeavor said its [...]

  • Netflix - Apple TV

    Netflix Stock Drops After CEO Acknowledges 'Tough Competition' Coming From Disney, Apple

    Netflix shares fell as much as 7% Friday to a nine-month low, coming after CEO Reed Hastings commented that the November launches of Disney Plus and Apple TV Plus will introduce a “whole new world” of competition. Hastings, speaking at the Royal Television Society conference Friday in Cambridge, England, said, “While we’ve been competing with [...]

  • Charlie Rose Sexual Harassment

    Charlie Rose Sued for Sexual Harassment by Longtime Makeup Artist

    A makeup artist who worked for Charlie Rose for 22 years has filed a sexual harassment lawsuit, accusing the former CBS and PBS host of years of unlawful behavior toward female employees. Gina Riggi alleges that Rose was verbally abusive with her and would often make derogatory comments about her weight. She also alleges that [...]

  • Rob Stringer

    Sony Music Chief Rob Stringer on Sustaining Growth and Recovering From the 'Dark Times'

    The Goldman Sachs Communacopia conference, now in its 28th year, gives top executives at major companies the opportunity to make their case to investors — and the Goldman analysts the opportunity to keep things on the up and up. While the analysts don’t necessarily grill the executives, they don’t lob softball questions either. That was [...]

  • Frank Grillo'Avengers: Endgame' Film Premiere, Arrivals,

    Matt Phelps Tapped as President of Joe Carnahan, Frank Grillo's Warparty

    Frank Grillo and Joe Carnahan’s Warparty productikon banner has appointed Matt Phelps president of the company. Phelps will head the Los Angeles office and be responsible for overseeing all film and television projects. “We searched long and hard to find the right fit for Warparty and felt that Matt embodied everything that we were looking [...]

  • Jack Gilardi, Longtime ICM Partners Agent,

    Jack Gilardi, Longtime ICM Partners Agent, Dies at 88

    Jack Gilardi, a longtime ICM Partners agent who represented such stars as Burt Reynolds, Sylvester Stallone, Jerry Lewis, Charlton Heston and Shirley MacLaine, died Thursday at his home in Los Angeles. He was 88. Gilardi was known for his gentlemanly style, love of the Los Angeles Dodgers and his skill at representing top actors. He [...]

More From Our Brands

Access exclusive content