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Lionsgate Vice Chairman Says Premium VOD Could Happen in 12 Months

Theater owners aren’t going to like this prediction.

Lionsgate Vice Chairman Michael Burns said at Wednesday’s Morgan Stanley Technology, Media & Telecom Conference that he expects some type of premium video-on-demand offering could be introduced in the next 12 to 18 months. He also predicted that studios will be able convince exhibitors to come aboard.

“We’ll do it in a friendly way,” said Burns, adding that the service will only be a “home run” if both sides figure out a way to make the offering a “win-win.”

Burns’ predictions fly in the face of industry chatter. After heating up in 2017, premium video-on-demand talks between studios and theater owners have largely ceased. There are still some discussions taking place between Hollywood companies and the Canadian chain Cineplex, but it’s unclear if they will lead to any pact. Typically 90 days have to transpire between a movie’s debut in theaters and its home entertainment launch, but studios believe that exclusive theatrical window is too long. They note that many films make the bulk of their revenues in the first few weeks of release and believe that sales and rentals would be goosed if movies were available on demand shortly after the studios had spent millions on national advertising campaigns.

Last year, studios were offering exhibitors a piece of their home entertainment sales if they would allow them to introduce movies in the home a few weeks after they premiere. Burns didn’t sketch out what a potential deal would involve, but he did mount a spirited defense of the big screen experience.

“This whole thing about the theatrical businzess is dead,” he said derisively. “It’s dead if you have shitty movies.”

“Black Panther,” he noted, made more than $100 million in its second weekend and should make $1 billion globally — a commercial reception few would have predicted.

Lionsgate has been the subject of sales chatter in recent months, particularly after a deal to merge with Hasbro collapsed. Burns was pressed about whether or not Lionsgate is big enough to compete with massive companies such as Facebook, Apple, or Amazon that have deep pockets and a desire to enter the content business.

“You need to have as much scale as possible, but it’s got to be the right scale,” said Burns, arguing that Lionsgate’s movies and shows are popular enough to help it carve out a niche for itself.

He also noted that few people know just what Apple and Facebook’s plans are when it comes to making movies and shows. Burns said these companies must ask, “am I in or out and if I’m in am I building it or am I buying it?”

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