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The Studios Are a Step Closer to Offering Premium Video on Demand Next Year & The Theaters Won’t Like It

Earlier this year AMC Entertainment CEO Adam Aron, the man charged with running the largest theater chain in North America, assured investors that there was no industry consensus on premium video on demand yet, at least not enough to start offering anything before the end of 2017. He was right about the year. You won’t be able to stay home and simply pay a lot to legally stream The Last Jedi over Christmas instead of seeing it in theaters. But next year? A strong maybe.

According to THR, Comcast, Apple and Amazon are partnering with the film studios on a plan to offer $30 rentals for new movies 30-45 days after premiering in theaters. That’s around twenty dollars cheaper and two-three weeks later than some of the more hard-line proposals which had been floating around, such as $50 rentals after 17 days in theaters. But they want movie theater and need consumer buy-in, which might be more achievable with a longer lead time and lower price point. Their goal is to roll this out at some point in the first two months of 2018, possibly just in time for the Christmas 2017 titles to have reached the 30-day threshold.

The studios are turning to the tech companies and cable providers to figure out a delivery system and anti-piracy strategy, and then those companies will negotiate with each studio individually to skirt around anti-trust laws which prevent the studios from out-and-out collusion. However, that’s more than just the legal work around it might appear to be. That’s actually the opening for this whole thing to go south because for this to work there has to be an industry consensus on price. While most of the studios might agree on $30 right now things could change once actual negotiations begin. All for one, and one for…hey, Universal, where the heck are you going? Or something like that.

Just to be clear, as of right now Disney wants no part of this. So, it’s just Warner Bros., Universal, Sony, Paramount and possibly some of the various mini-majors (LionsGate, STX, etc.).

So, what changed from the time Aron said no deal to now? After all, the movie theaters see premium video on demand as a direct threat to their business model which is entirely dependent upon maintaining a 90-day exclusive window on all new movies. Without it, the theaters fear they will go the way of the record shop, book store and video store by becoming just another brick and mortar fatality in the death march of technological progress. In fact, Aron guessed that “the odds of whatever happening being good for exhibitors has a higher probability of happening than for it being bad for exhibitors.”

Never tell the studios the odds, though, because they are prepared to say screw you to all of the theaters and just do this thing whether they like it or not. The theaters want assurances that whatever PVOD window is introduced stays the same for 5-10 years, and that it won’t change the 90-day window which otherwise prevents movies from being sold for purchase. If they don’t get that they won’t support this deal and are again threatening to boycott any movies made available on PVOD. The studios are calling their bluff.

Here’s the really shitty part about this: The theaters are hurting right now, and it’s mostly the studios’ fault. AMC, for example, lost 25% of its value on the stock market earlier this month due to a lower-than-expected quarterly report, and that’s because the summer movie season was one giant fart noise for exhibitors. That’s not their fault. They don’t make the damn movies. They just show them. And maybe if Hollywood made better decisions in that area the exhibitors wouldn’t be suffering.

But that’s the way it is, and because Hollywood’s ineptitude has made the theaters newly vulnerable the studios now feel emboldened to move forward with something the theaters don’t want, outright daring them to boycott.

Daaaaaamn. That’s seriously cold, but it’s exactly the move that might be required to get PVOD off the ground. But surely going this alone without support from the exhibitors is the nuclear option, right? I get it. Movie theater owners can be real stick-in-the-mud types. They’ve held too tight to the (it should be noted) voluntary 90-day window, and threatened legal action when MoviePass moved to see if a $10-a-month-for-unlimited-movies-in-theaters model is viable and sustainable. Still, do the studios really want to so brazenly upset a working relationship they’ve enjoyed for a century just to cater to our short-attention spans and the gradual Wall-E-ification of consumers, especially if all the theaters are asking is that they stick to a certain price point and time frame for PVOD.

PVOD is coming. The continually waning attendance figures and surging TV viewership numbers suggest a change is necessary. But, as they would say in The Matrix, not like this. Please. Not like this.

Source: THR

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