Cracking windows

By Marcy Magiera -- Video Business, 11/10/2006

NOV. 10 | SANTA MONICA, Calif.—If major motion pictures were to be released simultaneously in movie theaters and on DVD, an estimated 15% to 20% of movie patrons would stay home, causing about a third of theaters to shut their doors.

That’s from John Fithian, the passionate and articulate lobbyist whose job it is, as president and CEO of the National Assn. of Theater Owners (NATO), to protect his constituency against that.

Fithian, attorney Keith Fleer of Loeb and Loeb, director Donald Petrie (How to Lose a Guy in 10 Days, Miss Congeniality) and I participated on a panel discussion on windows presented by the Directors Guild of America at the American Film Market here this week.

Fithian tracks the theatrical window very closely and puts the average at about four months and 16 days this year, down a couple of days from last year, a couple more days from the year before that, and a couple more the year before that.

Of course, a decade ago, the theatrical window was over six months, and the video window was 90 days. With the video window having shrunk to about 30 days now, it has lost about two-thirds, which is far more than the theatrical window has shrunk, at roughly 25% shorter than it used to be.

Video retailers have been able to withstand that change because of their evolving business model. The widespread adoption of DVD, sell-through pricing and revenue-sharing have made video retail much more similar to theatrical in that movies “open” more strongly than ever, do a huge percentage of business in the first week and taper off quickly.

Theaters have fed the huge open-quick phenomenon as well by arguably oversaturating the country with multiplexes.

No one goes home from Blockbuster—or Wal-Mart—having had to settle for their second choice movie. And virtually no one gets turned away from the multiplex either.

Market forces set the relatively short lifecycle of a majority of, but not all, major studios films, so that neither distribution stream needs a protected three-month window.

Having said that, there is no benefit to video retailers in a theatrical window extremely truncated to get the movie to stores quicker.

It’s an exciting consumer proposition to think that major blockbusters will one day open simultaneously in theaters, on DVD and via download or some form of pay-per-view. But Hollywood is not there yet, and experiments with small films have at best met with mixed success.

Even if one is jaded enough to dismiss the communal and aesthetic experience of seeing a movie in the theater, it can’t be argued that theatrical release is still the most powerful marketing vehicle for DVD.