Paramount, theaters hatch deal to trim theatrical window

By David Friend, The Canadian Press on July 8, 2015.

The deal is scheduled to go into effect for the studios’ two October releases: Paranormal Activity: The Ghost Dimension and the comedy horror film Scouts’ Guide to the Zombie Apocalypse.

According to new reports, Paramount is looking to shorten the time between when a movie is released in theaters and when it is available on demand.

When the films have been scaled back to play on fewer than 300 screens across North America – a sign that the movies have exhausted most of their box-office potential – a 17-day clock will begin ticking for their home release on Apple’s iTunes, the Cineplex Store and other video-on-demand platforms.

That may not sound like much, but it’s potentially a big change from the status quo: for decades, studios have typically waited at least 90 days after a film’s theatrical release before making it available on home media, often leaving a gap of a month or more. Top exhibitors have held fast to it, refusing to play movies that don’t abide by it. Indie distributors have already been releasing movies in theaters and on demand with only a small gap between them, if not simultaneously.

Added analyst Eric Handler of MKM Partners: “It’s a great way for the studio to maximize their marketing prowess, and the exhibitors are now able to capture part of the downstream profit”.

Paramount says it will also try the experiment with the AMC Theatres chain in the United States and is also in talks with other USA exhibitors for similar agreements.

Paramount Worldwide Distribution and Marketing President Megan Colligan said that the “new distribution strategy is modular and allows us to engage with consumers throughout the lifecycle of our films to meet their needs while reducing the piracy window”. “Our hope and intent is that this initiative offers a degree of innovation that benefits all parties”.

Paramount may have broken the traditional theatrical window today, but has it really been shattered? Faced with a boycott, Universal abandoned that plan.

Theater owners have long opposed such a change, fearing it would hurt box office sales. “We applaud Paramount for discussing this with theater owners”. “Individual theater companies will determine for themselves whether or not this is a model that works for them”.

Shortening the release date for all of Paramount’s movies will be a bigger move, and it’s not entirely clear if it has the deals to make that happen just yet.

Both films, which will debut in October, have budgets that each came in at less than $20 million.

Regal Entertainment Group, the country’s largest exhibitor, didn’t immediately return messages Wednesday.

“Exhibition for the first time was open-minded about evolving our business instead of sticking their heads in the sand and ignoring what is happening around us”, Paramount vice chair Rob Moore told the Hollywood Reporter. That was good enough for AMC and Cineplex. “But every movie is different and a one-size-fits-all business model has never made sense”.