Just about a year ago Variety‘s Brent Lang reported that the National Association of Theatre Owners had flatly ixnayed Sean Parker‘s Screening Room start-up — early home-video access to brand-new movies. “The exclusive theatrical release window makes new movies events,” a NATO statement read. “Success there establishes brand value and bolsters revenue in downstream markets.” The group added that any new distribution models should be created in consultation between studios and theater owners, and not with the help of a “third party.”
The use of the term “third Party” was “a clear dig” at Screening Room, Lang noted.
But now, at the start of Cinemacon 2017, Lang is reporting that studios and exhibitors “do seem closer to signing that grand bargain which would enable films to get early home entertainment releases for a higher price. As an enticement, distributors are willing to cut theaters in on a percentage of their digital sales. Six of the seven biggest studios — a group that includes Fox, Paramount, Lionsgate, Sony, Warner Bros., and Universal — are having unilateral discussions with major theater chains like Regal and AMC.”
Presumably this willingness to “cut theatres in” on digital revenues is what paved the way for the current constructive dialogue.
“Currently, big theatrical releases are supposed to wait roughly 90 days before they’re available to be sold or rented. But studios argue that’s too long, and they want to shrink the window in which theaters have exclusive access to their films. With the DVD market fading fast, they need to find a way to prop up home-entertainment revenue. There is a belief, accepted as dogma in some studio boardrooms, that streaming services like Netflix have conditioned consumers to access content whenever and wherever they would like it.”
The bottom line is that “fewer people are going to the movies. U.S. and Canadian attendance has failed to match the 1.5 billion admissions the industry hit in 2004.”
How does any of this translate into serious heel-clicking enthusiasm for the exhibition industry?