Cable industry's VOD trial balloon challenged

NATO, UNIC warn of global impact of quick VOD releases

The cable industry's recent trial balloon regarding quicker VOD releasing has gone down like a lead zeppelin.

Time Warner Cable has been hinting heavily that it wants studios to accelerate the release of movies to VOD, or so-called pay-per-view, platforms. But that and other recent signs of potential encroachment on the traditional theatrical window prompted sternly worded statements Wednesday from the National Association of Theatre Owners and its European equivalent.

The implicit message: Mess with exhibition, and there will be blowback of global proportions.

"We want to put an end to any more trial balloons of that sort," NATO spokesman Patrick Corcoran said.

NATO and the International Union of Cinemas (UNIC) noted that the FCC recently granted studios a regulatory waiver allowing them to block consumers' ability to use analog devices to record movies distributed digitally. The MPAA studio group requested the waiver specifically to allow the quicker release of movies through digital home-entertainment platforms.

But VOD and digital distribution aren't the only moves imposing on the traditional theatrical window. Exhibitors have been wary of possible acceleration in the release of movie DVDs, following decisions this year to hasten the disc release of Disney's "Alice in Wonderland" and Warner Bros.' "Clash of the Titans."

Exhibitors have been irked further when Disney's Bob Iger and other studio toppers have popped up at investors conferences with comments about experimentation with distribution windows. NATO took out full-page ads in the Hollywood trade dailies Wednesday to blast studios for public posturing on the issue.

"Individual theater companies must and will make decisions about release-window changes in their own company's interest," NATO's ad read. "(But) public negotiation creates confusion and bad blood between partners. We are keenly aware of the irony in using the media to call for an end to negotiating through the media, but the point is no less valid. Recent trial balloons and public statements regarding possible windows and price points are harmful to the industry.

"Exhibitors cannot be blindsided by unusually short windows after they have already booked and begun playing a movie in their theaters," the trade group's ad continued. "Whatever changes the studios seek to make to their release-window models, it is absolutely essential that theater owners be fully involved."

Getting caught by surprise by studio moves to collapse theatrical windows can be particularly embarrassing for publicly traded exhibition companies. Shares in Regal, AMC, Cinemark and Carmike tend to take hits when investors are rattled by unforeseen developments.

UNIC said Wednesday that it "recognizes that attempts to develop new business models in the film industry are an inevitable feature of a dynamic sector."

But the Paris-based organization added, "Whether as a response to increasingly fragile DVD income or in an attempt to thwart piracy, such developments should occur at the expense of one part of the value chain that undoubtedly works: theatrical exhibition."

The MPAA had no immediate comment on the exhibition industry groups' statements.
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