BY LEAH HOCHBAUMROSNER At an industry conference last spring, Stephen Burke, president of mega cable multiple systems operator (MSO) Comcast Corp., told an audience that a number of studios were “very interested” in the idea of allowing cable providers to charge viewers to watch movies at home the same day as their theatrical releases. He went on to assert that this move would actually increase studio revenue — but didn’t explain exactly how this would work — prompting both theater owners and studios to freak out and speak out. Two of the largest theater chains in the U.S., National Amusements Inc. and Regal Entertainment Group, said they’d simply refuse to play films that were made available simultaneously in homes. While neither got specific as to their reasons, it’s fairly obvious that it wouldn’t make economic sense for a patron to pay the expensive ticket price for an in-theater showing when they could watch a flick more cost-effectively from the comfort of their own homes, if one takes into account inexpensive popcorn, drinks and, for some, a savings of babysitting costs, for a night out at the movies. For cablers, on the other hand, it would make perfect sense. Comcast reportedly wanted to charge $30-$50 per screening (with a good portion going to the studios) — a hefty sum for a single viewing (but still cheaper than a night out for two or more people). Some would contend that releasing movies in homes on the same day as their theatrical releases would surely reduce piracy, since would-be bootleggers simply wouldn’t have the incentive to reproduce the stolen fare. This day-and-date strategy has, in recent years, been proven to work for international theatrical releases. More and more studios debut movies in multiple countries at the same time so as to ensure that pirates cannot get their grubby fingers on copies of films. But is that enough of a reason to release films at home on the date of their movie premieres? A slew of industry insiders have gone on record in recent years, extolling the virtues of maintaining the current system. Tom Freston, former CEO of Viacom Inc. was quoted as saying: “The “We as cinema operators believe the current model of tiered release works best for the movie industry,” said Fithian. “When movies are made for theaters first, they’re made differently. They have bigger budgets, longer production schedules, etc. And consumers know the difference.” Fithian also touched on the buzz that theatrical releases generate, something that would surely be missed in an environment where anyone with a remote had the same access to in-theater movies. “Big pictures like Harry Potter benefit from big screens because movies are seen in the best possible environment,” he said. “It’s a communal experience. You can see who’s laughing and who’s crying. This brings more attention to a movie.” Fithian insisted that the Comcast proposal is “a stale issue now.” He noted that he himself called Comcast, as did several NATO members, “and the company’s retreated somewhat from the statement it made publicly.” Indeed it has. Jenni Moyer, a spokesperson for Comcast, recently said that Burke’s comments were simply misinterpreted. “We are always interested in working with studios to find ways to shorten windows,” she said. “[Burke] was speculating as to what we could do, not what we will do.” But even as Comcast tries to distance itself from Burke’s statement, the company is already hard at work on an experimental initiative that measures the impact these day-and-date releases have on viewing rates. The company has partnered with a number of studios, including NBC Universal, Warner Bros., Paramount, Disney and Lionsgate, to release movies on Comcast On Demand on the same day as their DVD releases. Recent titles include Warner’s TMNT, a modern take on The Teenage Mutant Ninja Turtles, and Unaccompanied Minors, a holiday film starring Wilmer Valderrama. “We wanted to see how content providers and distributors could work together to expand the availability of programming,” said Moyer. Though she wasn’t specific, Moyer claimed that thus far, the trial run has been a resounding success for Comcast. The company also joined forces with IFC Entertainment in 2006 to offer IFC in Theaters, marking the first time selected independent films were made available (for a fee) in customers’ homes through Comcast On Demand on the same day they were released in theaters. “IFC has done very well with dayand-date,” said Moyer. “One film even earned the equivalent of two weeks of theatrical cash flow On Demand.” Moyer believes this partnership is a real boon both to makers of independent features and “to people without typical access to art-house films.” NATO’s Fithian saw things differently. “Some have argued that small independent pictures with limited marketing and distribution would benefit from simultaneous release,” he said. “But there’s a danger in branding them as small pictures. They lose the opportunity to become surprise hits like March of the Penguins or My Big Fat Greek Wedding. The surprise hit phenomenon will be greatly reduced if not all but eliminated.” Fithian recalled the lesson learned with Steven Soderbergh’s Bubble, a 2006 flick distributed by 2929 Entertainment which was released concurrently in theaters, on cable and satellite television and on DVD. “They spent more than $1.5 million making that movie and it made less than $200,000 during its cinema run — and even less than that on DVD,” he said. “If a Soderbergh picture would have had a chance to grow and establish itself, we believe it would have done better.” No one can say for sure. But whether or not a movie is released in theaters and on television at the same time, even those at Comcast agree that there’s still something magical about chomping on buttered popcorn from an oversized tub while staring wide-eyed at a big screen. “At the end of day, will day-and-date releases replace the social experience of going to a theater?” asked Moyer. “No. But with certain movies, you will come home from the theater and want to watch them again immediately.” V I D E O • A G E OC T O B E R 2 0 0 7 47 C a b l e v s . C i n e m a MSOs Storm In With Day-and-Date Demands Stephen Burke, Comcast Corp.’s president and chief operating officer [release] windows system has served the film industry quite well. And from a profitability standpoint, the studios have been a great beneficiary… We don’t see any reason to change that.” Jon Feltheimer, CEO of Lionsgate told The Financial Times: “We’ve got to protect the windows because the system still works.” Dick Cook, chairman of Walt Disney Studios told reporters at last year’s Reuters Media Summit that “the theatrical experience is still the most important experience in the pipeline. We are comfortable where it is now.” Debates about the ever-shrinking window between a film’s theatrical release and its DVD release have raged for years. These days, four months typically pass “ We as cinema operators believe the current model of tiered release works best for the movie industry — John Fithian, president of the National Association of Theatre Owners. before a movie is released on home video or DVD. Studios and theaters contend that shrinking the window any more would have disastrous effects on a film’s box office. Conversely, home video distribs would like to move up a movie’s home release date, and ride on the theatrical publicity wave in order to get their money quicker. While no compromise has yet been reached that truly appeases both sides, John Fithian, president of the Washington, D.C.-based National Association of Theatre Owners (NATO), which represents more than 29,000 movie screens in the U.S., and additional cinemas in more than 40 countries throughout the world, believes that the status quo should be maintained when it comes to windows.
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