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Don’t get rid of those window coverings just yet. There might be a glimmer of hope for film studios aiming to narrow the theatrical window for consumers willing to pay as much as $50 to see a new release in their own homes rather than trek to the theater.
The major theater chains — including Regal and Cinemark — no longer are steadfast in their opposition to a posh premium VOD service that would kick in about 17 days after a movie first hits the multiplex. “We’re having very constructive conversations with the exhibitors for the first time that we’ve had in a long time,” Warner Bros. CEO Kevin Tsujihara told investors Nov. 29 when discussing AT&T’s proposed acquisition of Time Warner. “We are working with them to create a new window.”
But there is an important sticking point. At least one of the three major theater circuits wants a guarantee in writing that a studio won’t try to shorten the existing home entertainment window for the next five to 10 years, according to insiders. (Generally, a movie is released on DVD 90 to 120 days after it opens in theaters.) And one studio not expected to take part in any discussion is Disney, which is enjoying a banner run at the box office and doesn’t want to change course. Its concerns echo those of many in Hollywood who believe that even offering such a service could confuse consumers and keep them away from the multiplex.
Analyst Hal Vogel says those worries won’t be enough to halt the shortening of windows, considering the pace of recent dealmaking. “Three of the studios have (or will have) direct relationships with inhome delivery platform — Universal/Comcast, Warner Bros./AT&T and Sony/PlayStation,” he told investors. “There appears to be a considerable acceleration in efforts to at least have a framework for an in-home window sometime in 2017.” He doesn’t believe any one platform will prevail, such as Sean Parker’s The Screening Room, which is touting its proprietary technology. (AMC is the only circuit that has signed a letter of intent to do business if the venture launches.)
Parker has shopped a plan to rent movies in the home on the same day they debut on the big screen for $50 and give theater owners a cut of revenue. Sources say Screening Room’s proprietors — backed by influential filmmakers including Peter Jackson and J.J. Abrams — are now open to the idea of 17 days, but they have yet to win over a studio.
Still, even as negotiations continue to churn in Hollywood, not everyone is convinced theater owners will jeopardize a domestic box-office business that grossed a record $11.1 billion in 2015. Analyst Eric Handler of MKM Partners tells THR: “I don’t have the sense that we’re about to see any seismic shift in the business. We’ve been hearing about windows shrinking for a decade, and nothing has happened.”
This story first appeared in the Jan. 6 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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