Regal, Cinemark Slam Imax, Weinstein Co. for 'Crouching Tiger 2' Netflix Deal

Courtesy of Netflix

"We will not participate in an experiment where you can see the same product on screens varying from three stories tall to 3-inches wide on a smart phone"

Regal, the country's largest theater chain, has wasted no time in slamming a historic deal to release The Weinstein Co.'s Crouching Tiger, Hidden Dragon sequel simultaneously on Netflix and in select Imax theaters around the world, circumventing the normal theatrical release.

Regal operates 86 Imax locations and will not carry the Netflix title in any of those theaters. And shortly after the Regal announcement, Cinemark, the country's third largest circuit, and Carmike likewise said they wouldn't participate.

"Cinemark does not play day-and-date movie releases on any of our screens including the Imax screens that we operate," a spokesman said. Cinemark operates 14 Imax theaters.

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Among the big three, that leaves AMC Entertainment, which has been more willing than other chains to play specialty movies that are getting a simultaneous VOD release. AMC, which has the biggest Imax presence, has yet to weigh in on the Netflix deal, but insiders say the exhibitor could end up carrying it in some Imax locations.

Crouching Tiger, Hidden Dragon: The Green Legend will make its debut Aug. 28, 2015. When announcing the deal Monday night, Netflix and Imax said it will be the first of several major films to be given a day-and-date release.

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"At Regal Cinemas, presenting movies on a grand scale is our promise to movie fans as we work to continually enhance the moviegoing experience. We recognize that there is a tremendous slate of films scheduled for release in 2015 and we couldn’t be more excited by the prospects," Regal spokesman Russ Nunley said in a statement.

"While a home video release may be simultaneously performing in certain IMAX locations, at Regal we will not participate in an experiment where you can see the same product on screens varying from three stories tall to 3" wide on a smart phone. We believe the choice for truly enjoying a magnificent movie is clear," he continued.

On Wall Street, at least one analyst was bullish on the deal. Eric Wold of B. Riley & Co. noted in report that most day-and-date VOD experiments have been attempted with "unsuccessful, lower-budget films." However, considering the success of Crouching Tiger, Hidden Dragon, "the sequel actually brings a solid franchise property into this equation."

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Wold predicted that many would boycott playing the film in Netflix territories, but noted that the sequel's Imax prospects are strong in China, where there is no Netflix. "We believe this news only helps to further validate the importance of the Imax format to the industry as a major player in the evolving industry’s future," he added.

Netflix's chief content officer, Ted Sarandos, has long wanted to release movies day-and-date on Netflix and in theaters, something most exhibitors are unlikely to ever allow, since they believe in preserving the theatrical window.

"Fans will have unprecedented choice in how they enjoy an amazing and memorable film that combines intense action and incredible beauty," Sarandos said in announcing the deal. "We are honored to be working with Harvey Weinstein and a world-class team of creators to bring this epic story to people all over the world and to partner with Imax, a brand that represents the highest quality of immersive entertainment, in the distribution of this film."

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Added TWC co-chairman Harvey Weinstein: "The moviegoing experience is evolving quickly and profoundly, and Netflix is unquestionably at the forefront of that movement," in a statement. "We are tremendously excited to be continuing our great relationship with Netflix and bringing to fans all over the world the latest chapter in this amazing and intriguing story."

Sept. 30, 8:15 a.m. Updated with Cinemark statement.