But those films share something else. All were available for home viewing in the U.S. the same day they reached theaters. Indeed, five of the six biggest grossing titles this year, and six of the top eight, had that option.
Theater play elevates films. Still, the studios that provide them to theaters are transitioning to a long-term battle for home platform prominence. Exhibitors are retailers and tend to resist change. They fought TV, cable, video cassettes, streaming. They have survived all. But the competition has never been this acute. It comes in a period where even before the pandemic ticket buying was declining, and the most optimistic projections now suggest getting to just 85 percent of 2019’s totals in 2022 is doubtful. Theaters know their studio “partners” adapted to COVID conditions. With their vast stake in home platforms, it’s a long-term issue. One trend started last year — titles intended for theaters skipping them entirely, either by streaming on their sites or selling to others — has not ended with theaters rebounding. Top titles are opening closer. But it is unclear whether they will hold as well. And the increase of films skipping theaters for home play is an ongoing trend. Meanwhile, confusion abounds among consumers. Unlike past patterns, distribution no longer operates under one accepted calendar for playoff. Even those films that delay home viewing may lose patrons under the assumption they soon will have it. Exhibition refused to budge over windows for years, insisting on at least 75 days before PVOD, 90 for standard VOD. Looking beyond 2021, they now have accepted three weeks until PVOD, with 45 days looking as the new normal for streaming. But had they compromised pre-COVID, they could have done better. It would be a smart move to think outside the box and work with studios for mutual benefit.
Here’s a radical proposal to throw out for thought: Theaters are playing well with films that have PVOD (at least $19.99) same day release. They work out PVOD revenue participation, perhaps even exclusively through exhibition-based sites. They have some period — perhaps at least 30 days — before these films are offered for free to streaming subscribers. Studios pledge to release all their films in theaters. The scale for film rental would be substantially reduced, determined in part by PVOD participation. Some event films still might have windows, at normal film rental.
Advantages for theaters:
Disney+
Advantages for studios:
Allows them access to theaters at the same time as they accrue revenue elsewhere. Allows for marketing to mostly be targeted to the initial release date. Gives the potential, if PVOD is limited to their home sites, of receiving 100 percent of that revenue (the Disney+ Premium model). Estimates are that “Cruella,” a $29.99 exclusive PVOD for them, has earned as much combined revenue so far from film rental and Disney+ Premier Access as “A Quiet Place Part II” has earned in film rental for Paramount. Provides for stability so they can plan ahead and have filmmakers know what to expect, with the guarantee of theater play. Gives films when they enter streaming to have elevated awareness and the imprimatur of theater play, still important for library value, including a shorter term when they do stream exclusively.
Disadvantages for theaters:
Gives up the possibility that if theaters over-perform in the recovery that they might get a better result. The public over time might become more familiar with PVOD and theaters decline further.
Disadvantages for studios:
They give up the flexibility to maneuver on a case by case basis, including those with streamers to decide to skip theaters. They still hold dominant position, with this deal conceding some ground. Whether this financial model equals alternatives, particularly with greatly reduced film rental, is uncertain. They delay showings on their streaming sites, other than possible PVOD exclusivity.
The key here is for both sides to come to a consensus that the survival of theaters matters, but that exhibition takes into account that they no longer are the sole entry point. For consumers, it satisfies both those who want theater play as their choice, as well as those who prefer home options. Would this work? Of course it’s not clear. But theaters need to understand that studios unchecked will continue to pursue alternatives to them. It makes sense to find some way to make co-existence work. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.
