High tide lifts all channels
-- Video Business, 3/16/2007
MARCH 16 | MPAA chief Dan Glickman got it mostly right when he said last week that “the companies I represent are helped not only through strong theatrical sales but also strong home video, DVD and Internet sales.” What he should have said was the studios “are helped not only through strong theatrical sales, but even more by strong home video and DVD sales.”
Given, the more-right message was undoubtedly wrong for the audience—theater owners gathered in Las Vegas last week for the ShoWest convention. Those guys are never that happy to be reminded that home entertainment generates roughly $24 billion in consumer spending, or 2½ times the domestic box-office. After all, theatrical release is the engine that drives ancillary markets… (more on that in a minute).
Preferred nuance aside, Glickman showed he gets the realities of a marketplace more driven by consumers than at any time in the past when he continued, “With new data that demonstrates folks who take advantage of other distribution platforms are more likely to see movies in the theaters, I hope we can recognize that this evolution can be good for everyone in the movie business. … I just want folks to see more movies in a variety of venues, … in the theater, … on DVDs, … on the Internet, legally of course … and in other ways I can’t yet dream of.”
Not so for NATO head and convention host John Fithian—who declared the preservation of the theatrical release window the trade org’s “most passionate goal”—and one that is even more important than piracy!? (Or “movie theft,” as Fithian bluntly and correctly calls it.)
Fithian’s tough talk is not really about the average 10 days that windows shrank this year; it’s about the future shrinkage that theaters fear. Hold the line at four months, eight days, and theaters won’t have to beat DVD back at the three-month mark (which is what really keeps NATO members up at night), or worse, fight studios over simultaneous release. Fithian implied that after some studios “flirted” with that crazy idea, they’ve essentially given it up, but he knows better than anyone, it’s not that simple. How about that international study that found studios could make more money by releasing films to theaters and DVD/VOD rental at the same time?
The reality is that not even video stores want widespread simultaneous release of major motion pictures in theaters and on DVD. There is no more valuable DVD marketing vehicle than a good theatrical run and all the advertising that goes with it.
But the reality also is that all windows are shrinking, and theaters owners did their part to bring it on by building enough seats to stretch from here to Mars. If consumer demand for a theatrical run is played out in three or six weeks, there’s no reason the DVD shouldn’t be available in 12 or 15.
As for NATO’s concern over “the potentially embarrassing association between short windows and bad movies,” shouldn’t that be DVD retailers’ problem to worry about? (Or not.)
The movie business checks out healthy on all fronts—Hollywood held the line on costs in 2006, box-office revenue grew 5.5% and admissions ended a three-year downward trend. There are a slew of high-profile sequels headed to auditoriums this year. That helps every group in the movie food chain.
