×

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

  • Leonardo Dicaprio Once Upon a Time

    Leonardo DiCaprio's Earth Alliance Commits $5 Million to Amazon Fires

    Earth Alliance, an environmental initiative backed by Leonardo DiCaprio, has committed $5 million toward the preservation of the Amazon rain forest following an alarming surge in wildfires. After launching Sunday, the organization’s emergency Amazon Forest Fund is working to support local partners and indigenous communities in their efforts to protect the sensitive habitats within the [...]

  • Harvey Weinstein

    Weinstein Can Get a Fair Trial in Manhattan, Says D.A.

    The Manhattan District Attorney’s office argued on Friday that Harvey Weinstein can get a fair trial in Manhattan, and blamed the producer’s defense team for much of the pre-trial publicity in the case. Weinstein’s attorneys have asked an appellate court to transfer the case — which is set to begin on Sept. 9 — to [...]

  • Leonardo DiCaprio Madonna

    Leonardo DiCaprio, Madonna Call for Action on Amazon Wildfires

    As wildfires rage at an alarming rate in Brazil’s Amazon rain forest, celebrities are using their platforms to bring awareness to the deforestation’s impact and to call for action. In the past week, stars like Leonardo DiCaprio, Madonna, Cara Delevingne and Ariana Grande have taken to Instagram to express their frustration with the lack of [...]

  • 'The Durrells' TV Show

    Greece Sweetens Production Incentives as Struggling Country's Economy Rebounds

    It’s taken the better part of a decade for Greece to show signs of recovery from the crippling crisis that almost pushed it out of the Eurozone. Now, with the economy slowly on the mend, the government is doubling down on efforts to jump-start the local film industry, giving a dramatic overhaul to the incentive [...]

  • Warner Music Group Partners With Audiomack

    Warner Music Group Partners With Audiomack

    Warner Music Group announced it has entered a partnership with the music streaming and discovery service Audiomack, marking the platform’s first licensing deal with a major label. According to the announcement, the two companies will work together on content concepts and explore ways to break emerging artists, connecting music fans with rising talent before they [...]

  • Scooter Braun Congratulates Taylor Swift on

    Scooter Braun Congratulates Taylor Swift on ‘Brilliant’ Album and Campaign

    Two days after Taylor Swift fired off the latest salvo in her battle with Scooter Braun, the manager congratulated the singer on the campaign around her “brilliant” new album, “Lover,” which arrived last night. The message came after Swift said she will be re-recording songs from her first six albums, which are now owned by [...]

  • David Koch Obit

    David Koch, Libertarian Activist and Billionaire Philanthropist, Dies at 79

    David Koch, brother of Charles Koch and one of the owners of Koch Industries, the second-largest private company in the U.S., has died at 79. According to the New York Times, Charles Koch announced the news of his brother’s death in a statement. Though he did not attribute to David’s death to a particular cause, [...]

More From Our Brands

Access exclusive content