Movies

Theaters want you to wait longer to stream movies. Why that probably won’t happen

BBG News

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An age-old debate has roared back to the forefront in Hollywood.

The debate surrounding what’s commonly known as the theatrical release period has been a significant point of discussion among film studios and cinema owners for quite some time. With the advent of the pandemic, this conversation intensified, particularly regarding how quickly a film is made available for home viewing after its initial theater release. Some production companies significantly reduced these windows by releasing movies for video-on-demand and streaming platforms sooner.

Then top theater lobbyist Michael O’Leary threw down an unexpected gauntlet.

Addressing a crowd of theater owners and film industry experts in Las Vegas, he urged the industry to implement a fresh norm: prolong the waiting period for home viewing – a minimum of 45 days after initial release.

In a recent speech at the CinemaCon trade convention held at Caesars Palace, O’Leary, president and CEO of Cinema United, emphasized the importance of establishing a clear and consistent foundation to uphold our shared dedication towards cinematic exclusivity. This foundation, he stated, should also set transparent expectations for movie enthusiasts. He underscored that short-term profits should not compromise our long-term achievements.

Hollywood Inc.

Following a challenging initial quarter at the cinema, production companies displayed their top movies, along with some high-profile actors, during the yearly CinemaCon trade event held in Las Vegas.

Subsequently, the issue was the central focus of the convention, sparking discussions across the industry. From quiet whispers in confidential talks to loud declarations in public forums, it appeared that every individual had a take on the subject of cinema release windows.

Prior to COVID-19, wait times could extend up to a staggering 90 days. Theaters vehemently opposed any efforts to shorten these periods, but the pandemic and subsequent theater shutdowns compelled them to reconsider. Major chains like AMC and Cinemark eventually adapted to the new circumstances through agreements with studios. Now, the average wait time has significantly decreased to approximately 30 days.

Andrew Cripps, who is in charge of theatrical distribution at Walt Disney Studios, mentioned during a gathering that on average, their movies stay in theaters for approximately 60 days, which is longer than any other studio.

During a recent panel discussion, Peter Levinsohn, who holds the position of chairman for global distribution at NBCUniversal Entertainment and Studios, commented that today, there is significantly more contention for leisure or spare time compared to just a few years back.

He suggested that if it’s only a matter of windowing, our industry should strive to be inventive and adaptable to cater to the audience in their preferred locations.

In simple terms, Tom Rothman, head of Sony Pictures Entertainment’s Movie Group, stated a day before O’Leary’s speech that “cost and release timings can benefit or harm us.” He further mentioned that “Sony is ready to collaborate with you on both aspects,” which was met with approval from the gathering of cinema owners.

It remains uncertain if the industry as a whole will agree on a standard timeframe for a return to work – let alone adopt the 45-day period suggested by O’Leary – and there are many skeptical voices within the industry.

Critics contend that reducing the display duration for movies lessens the revenue from ticket sales, as it discourages spontaneous cinema-goers from checking showtimes impulsively and instead promotes viewers to postpone watching a film until they can stream it at home.

Vendors argue that a standard window approach, where one size fits all, isn’t effective, particularly for lower-budget and moderate-budget films. They suggest that by transitioning a film from cinema to home viewing once its earnings in the theater have peaked, it can enhance profitability.

One studio source mentioned that it’s extremely challenging to revert our current course. While I can’t definitively rule out the possibility, I believe there’s a significant amount of effort required for us to move forward.

In response, O’Leary expressed that his suggestion of a 45-day timeframe was a “fair and reasonable basis” to build upon for future negotiations. However, any ultimate decisions will be made by the studios, as window lengths in the U.S. are primarily influenced by market conditions, he explained.

However, O’Leary expressed that it seemed appropriate to delve deeply into the topic now. The second half of 2024, he suggested, bore a resemblance to the first phase of post-pandemic stability, as the double writers and actors strikes, along with the ensuing turmoil in the film industry, had subsided. He predicted that this year and 2026 would be robust, providing the industry with some respite to ponder its future direction.

According to O’Leary, it’s understood that there should be a phase of exclusivity. He also believes that some timeframes might extend. The main issue is whether we can establish some degree of stability and consistency so that moviegoers have predictable experiences.

Hollywood Inc.

In simpler terms, small-scale cinema owners are struggling due to a lack of big blockbusters and successful films. Currently, the earnings from ticket sales have decreased by about 11% compared to the corresponding time frame last year.

Last year’s box office earnings from movies totaled approximately $8.7 billion, marking a 3% decrease compared to the previous year in 2023 and significantly lower than before the pandemic. This decline has sparked worries that viewers’ movie-going habits may have undergone a significant shift. So far this year, the revenue is 5% lower compared to 2024.

There’s been a lot of discussion about whether reducing the time between a movie’s release in theaters and its availability for streaming affects box-office earnings, and if it does, by how much.

According to a recent study by movie data site The Numbers, it was found since 2021 that films with an 18-day window typically had lower box office performance. Contrary to expectations, releasing these films early for home viewing didn’t harm their overall earnings in theaters; instead, the additional advertising might slightly increase their box office sales.

In contrast, it was discovered that movies with a gap of 21 to 44 days before being released on streaming platforms missed out on approximately $132 million at the box office in total. Interestingly, the impact on profits lessened as the time periods grew longer.

Jackie Brenneman, a founding partner at theater consulting firm the Fithian Group who specializes in researching windows, stated, “I’m not suggesting it should be one group against another. Instead, I believe that movie theaters could significantly contribute to [distributors’] overall profits if there was more exclusivity. This doesn’t necessarily mean harm to their streaming platforms; instead, it allows those movies some breathing space.

According to studio officials, a shorter period between film release and theater closure could explain why moviegoers haven’t returned to cinemas in large numbers post-pandemic.

However, that’s not all there is to it. Enhancing cinema-goers’ experience is indeed a crucial aspect, as suggested, and with an abundance of alternatives vying for people’s time, it seems reasonable for them to choose the theater over staying home. This could encompass various strategies like offering daily discounts, upgrading theater infrastructure, providing extended matinee prices, or even showing more exclusive trailers before movies. From the studio perspective, producing high-quality films is non-negotiable.

Adam Fogelson, head of the Lionsgate Motion Picture Group, expressed his readiness to talk about films, but emphasized that this topic should be part of a broader conversation focusing on strategies to encourage more frequent theater visits.

And that is something O’Leary, too, can get behind.

Today’s consumers are far more discerning compared to those in the past, given the abundance of choices they now possess. It’s crucial to consider every aspect contributing to a fantastic cinema-going experience.

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2025-04-14 13:31

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