By David Poland firstname.lastname@example.org
Film Delivevolution 33111: March 30… A Day That Will Live In Infamy… On Demand
Let’s start with the backstabbing part…
After NATO agreed to keep the discussion of VOD behind closed doors at CinemaCon (nee’ ShoWest) this week, welcoming new MPAA chief Christopher Dodd, 4 of MPAA’s 6 active members announced that they would be launching Premium VOD via DirecTV and a few other outlets… in April.
Dodd, who seemed sincere, made a great noise about movie theaters being the best way to see a movie… and just 24 hours later, turned out to be playing games as front man for the studios. And as problematic as short-window VOD is, it is more problematic that The Studios so aggressively misled their partners in exhibition.
I asked Dodd specifically about whether he would counsel his MPAA member studios to wait until they has consensus about VOD before proceeding with any plan. He avoided the answer and John Fithian, citing respect and a handshake agreement, did as well. But the answer was, they had already reached consensus… and pretty much signed a deal with DirecTV to actualize it. I guess this is the studios’ Libya. It’s just to sensitive a topic to be honest about. (No wonder NATO is pissed.)
Interesting, the most aggressive proponent of shortening windows, Disney, is not (currently) participating in this experiment. It may or may not be coincidence, but Disney also had the greatest presence at the event this week. (They may also still be under agreements that were signed last year regarding Alice in Wonderland.)
Also staying out of this mess is Paramount. Their public excuse is concern about piracy. More likely, the boss, Sumner Redstone, is not anxious to be a pariah amongst his brethren in the exhibition world, where he came from with National Amusements. Redstone also failed to turn up for a gathering of all the former presidents and CEOs of NATO… could it be that he didn’t want to have to lie to his colleagues about what was about to go down?
Here’s another theory about why Paramount and Disney are not leaping right now… Thor, Pirates 4, and Kung Fu Panda 2. Paramount is in position to have its best year ever… perhaps getting into a fight with the movie theaters is just a dumb idea when you feel so good about what is about to happen?
That leaves Universal’s Bridesmaids and WB’s The Hangover 2 as potential May targets for exhibitors. WB, Universal and Fox are also in harms way in April with Arthur, Your Highness, Rio, Water For Elephants, and Fast Five.
When will the other shoe drop, as per the exhibitors’ response to this? Will they target smaller films or wait until summer, when they could do some real damage?
It seems to be overstating to suggest that this is already sure to be The Future. A bit on the scummy side, the four studios involved cleverly slotted this historic event to titles that have already been played out theatrically. So unlike Disney, which dealt with the response to their plan for Alice directly, taking the chance of being vulnerable to an exhibitor revolt, Sony, Fox, Universal, and WB are launching this experiment with movies that the exhibitors have already played out, already in their 7th or 8th weeks of release. (Universal hasn’t announced a title for the launch.. The Dilemma will be at about 75 days at the launch and The Adjustment Bureau around 50 days… and I don’t think they have the rights to sell streaming for Relativity movies.)
The first movies scheduled are Just Go With It (Sony), Cedar Rapids (Fox Searchlight) and Unknown (WB). Fox told The Hollywood Reporter that Searchlight movies would go to VOD 60 days after the went wide… but Cedar Rapids has never gone as wide as 500 screens. I would joke that Sony has a hard enough time getting anyone to see Adam Sandler movies after 3 weeks, but this is actually one of his leggier films. And Unknown has already dropped to under 700 screens.
Where are Big Mommas: Like Father, Like Son and Hall Pass in the plan?
Next up, if things move forward, would be The Adjustment Bureau (U), Battle: Los Angeles (Sony), Red Riding Hood (WB), Paul (U), and Win Win (Fox Searchlight). That would take the experiment all the way into May. The April movies wouldn’t launch until June.
My take is that NATO should take a mid-range position on all of this, reserving their rights to change things up at will. Simple rule for now… if a title is participating in this 60-day VOD window, exhibitors will book for no more than 30 days and only on 1 or 2 screens of any multiplex booking the film. Period.
Show some muscle. Studios want short windows? Give them short windows… and no option for extension. They want to front-load releases in order to get to the next window faster? Give them theaters to play in, but don’t conspire with them to make over 30 million seats available on opening weekend as a matter of course. See how big these same films open with “just” 10 million available seats on opening weekend. See the value of Weekend 5 multiply instantly… but don’t play any of these movies that week. After all, it will be on Comcast, Time-Warner Cable, and DirecTV soon enough.
(Note: Why did DirecTV get the first deal and not MPAA members Comcast and Time-Warner? Could it be…. The Justice Department? “You know, it’s not about us solidifying our cable businesses… seriously… we let that other company do it before we did… it’s not an oligopoly… really!”)
There is possible good news coming out of this… the failure of $30 VOD. It may not take any external effort at all to get this result. However, once the door opens, so does the process of studios juggling pricing to get to the end they seek. There is one thing that powerful men hate most… being proven wrong. Failure is not likely enough to kill this bad idea off. There will be excuses about how the movies just weren’t good enough… how education about the service couldn’t be developed quickly enough, etc.
But within a few months, with some pressure from the exhibitors that is felt at the box office, the talent involved with the films could start to push back. The last summer Harry Potter film was grossing almost $1 million a weekend when it would, in this plan, go to premium VOD. Will exhibitors allow WB to squeeze all but the last couple of million out of their theatrical and then go right to Premium VOD? It’s a major issue. The last summer Potter took in over half its box office by the end of the first weekend. Four weeks isn’t that much of a financial threat. But keep it to 6000 actual screens? This would probably cut opening weekend by 20% or more and slow down the revenue stream. (Actual screen count for Potter’s opening weekend would likely be north of 13,000 screens)
No one can argue that wide-release movies are not playing out in 6 weeks. These distributors want to go to the next window right then. What they don’t seem concerned about is whether a 6 week window will damage those 6 weeks in theaters. In all but about a dozen or so movies a year, the logical answer seems to be, “Yes… there will be real damage.” But if it’s 10% or less, bean counters figure they can replace that revenue with a new window. What they don’t seem to get is that this is a conceptual issue for audiences, not something logical that can be rationalized down to the week. Even people who will never pay $30 or even $20 for VOD will thing of theatrical openings differently because it is available with such a short window. They are disincentivizing an audience that is already very expensive to herd for theatrical. Every movie is not a must-see water cooler event.
in any case, I look forward to Fox releasing the VOD of X:Men: First Class against the theatrical of Rise of the Apes.
I can’t wait to see The Hangover 2 hit 60 day VOD opposite WB’s launch of Steve Carrell comedy Crazy, Stupid, Love.
(ADD, 2:40p – Some are reporting that participating studios are now saying they will keep big grossers off this schedule. Well, speaking for NATO, fuck that! This is the most insulting notion of all… that the distributors can undercut theaters when they feel like it, but what works for their smaller films is not good enough for their big hits. Truth is, this makes no sense anyway, as the biggest hits – with rare exceptions – are more front loaded than the mid-range grossers. It’s the big films that stand to have the best shot of getting premium prices at home. But I don’t think that there are real answers yet. As I wrote… we are still looking at an experiment with no evidence to suggest it will work well. And history tells us that when distributors conspire to shorten effective windows, they get shorter. And they keep getting shorter every year.)