Cineplex Working With Studios to Make Potential Early In-Home Movie Rentals a "Win-Win"

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Cineplex CEO Ellis Jacob

CEO Ellis Jacob says the Canadian exhibition giant is collaborating with studios to make any premium VOD window "a win-win for both of us."

With a premium video-on-demand window for new theatrical releases possibly on the horizon, Canadian exhibition giant Cineplex says it's ready should Hollywood studios try to shorten the theatrical release-to-streaming window on their own.

"We are working closely with our studio partners to be, whatever ends up happening, in a situation where it [premium VOD] will be a win-win for both of us," Cineplex CEO Ellis Jacob said Tuesday after releasing his company's third-quarter results.

But Jacob told The Hollywood Reporter a successful premium VOD rollout will require participation from across the industry and the major studios should not harm exhibition, the "engine that drives the train," just to recover lost home entertainment revenues.

"The movie business is strong, and it's exhibition, not the home entertainment part of the business, that continues to deliver results," the exec argued. The major studios and exhibitors have been holding talks on launching a premium VOD window, but so far without success, and the studios appear willing to try premium in-home rentals if exhibitors don’t come on board.

Ellis said Cineplex is prepared for any scenario as it has a delivery system for premium VOD titles in place. The VOD app, Cineplexstore.com, already allows Canadians to purchase or rent movies from their living rooms or via various electronic devices. 

But Jacob insists shortening the theatrical window will not end Hollywood's home entertainment woes, and should be seen as one more response by the movie industry to digital disruption. "It's another opportunity to partner and do things smart together," he said of the ongoing collaboration between the major studios and exhibitors.

Cineplex last year was among the first major chains to sign up for Paramount's distribution plan to get Scout's Guide to the Zombie Apocalypse and Paranormal Activity: The Ghost Dimension into homes far earlier than the traditional three-month theatrical window.

Wall Street observers are predicting a premium VOD service could be rolled out in early 2018, with several studios participating. The continuing early-windowing talks come as Cineplex on Monday reported reduced third-quarter profit and revenue as fewer people went to the local multiplex. Canada's largest exhibitor saw net income tumble 33 percent to $17.2 million on overall revenue slipping 1.5 percent to $370.4 million.

Attendance fell nearly 13 percent to 16.8 million patrons during the latest quarter, and box-office revenue fell 11.3 percent, or $20.9 million, to $164.5 million during the period as the performance of Spiderman: Homecoming and It didn't match last year's third quarter when Suicide Squad, The Secret Life of Pets and Star Trek Beyond played on Cineplex's screens.

While box office and concessions revenue per-patron was up during the quarter, Cineplex's Jacob said too many Hollywood summer 2017 releases "did not meet expectations," which depressed attendance.

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