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Counting James Cameron and Peter Jackson among them, 23 leading directors and producers have signed an open letter opposing a pricy new premium VOD service that puts movies from Warner Bros., Sony, Universal and 20th Century Fox in homes only 60 days after a film’s theatrical release.
Those signing the letter include Michael Bay, Kathryn Bigelow, Guillermo del Toro, Roland Emmerich, Shawn Levy, Michael Mann, Todd Phillips, Brett Ratner, Adam Shankman, Gore Verbinski and Robert Zemeckis. It is a formidable—and powerful—group, with deep ties to the studio they are now taking on.
“As leaders in the creative community, we ask for a seat at the table. We want to hear the studios’ plans for how this new distribution model will affect the future of the industry that we love,” the document states.
“And until that happens, we ask that our studio partners do not rashly undermine the current – and successful – system of releasing films in a sequential distribution window that encourages movie lovers to see films in the optimum, and most profitable, exhibition arena: the movie theaters of America.”
Cameron and his producing partner Jon Landau—also a signatory—have been working with the National Assn. of Theater Owners in amassing support for the open letter. NATO will pay for the letter to appear in industry publication Variety tomorrow—just as DirecTV launches Home Premiere, the new VOD service. The first Home Premiere title is Sony’s Just Go With It, which HD customers can rent for $29.99 as of Thursday. Analysts have predicted this will have little impact.
“You can argue about VOD windows all day long, but what you can’t deny is that there is an overwhelming outcry from the theater owners that they feel threatened by this,” said Cameron, who played a key role in amassing support for the letter, which also will be posted on NATO’s website.
“The cinema experience is the wellspring of our entire business, regardless of what platforms we trickle down to. If the exhibitors are worried, I’m worried. We should be listening to them. Why on earth would you give audiences an incentive to skip the highest and best form of your film? My films aren’t going to the home early, but many will, and that will weaken the movie theater industry—and then my movies are threatened,” Cameron continued. RELATED: 7 key questions related to VOD controversy.
The letter is the first public step in an ongoing effort by theater owners to air the concerns of all those impacted by shortening the theatrical release window.
“As a crucial part of a business that last year grossed close to $32 billion in worldwide theatrical ticket sales,” the letter states, “we in the creative community feel that now is the time for studios and cable companies to acknowledge that a release pattern for premium video-on-demand that invades the current theatrical window could irrevocably harm the financial model of our film industry.”
In their letter, directors and producers say premium VOD could negatively alter consumer buying habits, exacerbate film piracy and severely limit the ability of theater owners to play specialty films in platform release patterns.
Independent director Karyn Kusama (Aeon Flux, Jennifer’s Body) said: “As someone who hopes to have the ability to keep making small movies alongside the opportunity to make some bigger ones, I am concerned by how much a shortened VOD window might affect a filmmaker like me. This shortened window might imperil the robustness, and challenge the already shrinking flexibility in programming, of the very venue that makes movie-making, and movie-watching, the work we choose to do.”
NATO executives have been meeting with various segments of the film industry over the past several months to discuss premium VOD.
“The directors and producers we’ve talked to are passionate filmmakers and very informed business people who care deeply about their art and craft,” NATO president-CEO John said. “Whether they are the makers of blockbusters or independent films, Oscar winners or just starting their careers, all have expressed extreme concern over announced plans to shorten the distribution window, and stated their desire that films can be seen in the venues they were made to be seen in: movie theaters,” Fithian said.
Cameron and his brethren said the problem of declining DVD sales will not be solved by premium VOD. The letter asserts: “What sells for $30-a-viewing today could be blown out for $9.99 within a few years. If wiser heads do not prevail, the cannibalization of theatrical revenue in favor of a faulty, premature home video window could lead to the loss of hundreds of millions of dollars in annual revenue. Some theaters will close.”
Antoine Fuqua, Todd Garner, Lawrence Gordon, Stephen Gyllenhaal, Gale Anne Hurd, Bill Mechanic, Jamie Patricof and Robert Rodriguez also signed the letter.
Read the full letter after the jump.
AN OPEN LETTER FROM THE CREATIVE COMMUNITY ON PROTECTING THE MOVIE-GOING EXPERIENCE
We are the artists and business professionals who help make the movie business great. We produce and direct movies. We work on the business deals that help get movies made. At the end of the day, we are also simply big movie fans.
Lately, there’s been a lot of talk by leaders at some major studios and cable companies about early-to-the-home “premium video-on-demand.” In this proposed distribution model, new movies can be shown in homes while these same films are still in their theatrical run.
In this scenario, those who own televisions with an HDMI input would be able to order a film through their cable system or an Internet provider as a digital rental. Terms and timing have yet to be made concrete, but there has been talk of windows of 60 days after theatrical release at a price of $30.
Currently, the average theatrical release window is over four months (132 days). The theatrical release window model has worked for years for everyone in the movie business. Current theatrical windows protect the exclusivity of new films showing in state-of-the-art theaters bolstered by the latest in digital projection, digital sound, and stadium seating.
As a crucial part of a business that last year grossed close to $32 billion in worldwide theatrical ticket sales, we in the creative community feel that now is the time for studios and cable companies to acknowledge that a release pattern for premium video-on-demand that invades the current theatrical window could irrevocably harm the financial model of our film industry.
Major studios are struggling to replace the revenue lost by the declining value of DVD transactions. Low-cost rentals and subscriptions are undermining higher priced DVD sales and rentals. But the problem of declining revenue in home video will not be solved by importing into the theatrical window a distribution model that cannibalizes theatrical ticket sales.
Make no mistake: History has shown that price points cannot be maintained in the home video window. What sells for $30-a-viewing today could be blown out for $9.99 within a few years. If wiser heads do not prevail, the cannibalization of theatrical revenue in favor of a faulty, premature home video window could lead to the loss of hundreds of millions of dollars in annual revenue. Some theaters will close. The competition for those screens that remain will become that much more intense, foreclosing all but the most commercial movies from theatrical release. Specialty films whose success depends on platform releases that slowly build in awareness would be severely threatened under this new model. Careers that are built on the risks that can be taken with lower budget films may never have the chance to blossom under this cut-throat new model.
Further, releasing a pristine, digital copy of new movies early to the home will only increase the piracy problem—not solve it.
As leaders in the creative community, we ask for a seat at the table. We want to hear the studios’ plans for how this new distribution model will affect the future of the industry that we love.
And until that happens, we ask that our studio partners do not rashly undermine the current – and successful – system of releasing films in a sequential distribution window that encourages movie lovers to see films in the optimum, and most profitable, exhibition arena: the movie theaters of America.
We encourage our colleagues in the creative community to join with us by calling or emailing NATO at 202-962-0054 or firstname.lastname@example.org.
Guillermo del Toro
Gale Anne Hurd
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