Top Theater Group Won't Oppose Paramount's VOD Revolution

Paranomal Activity: The Marked Ones Still, New - H 2015
Paramount Pictures

Paranomal Activity: The Marked Ones Still, New - H 2015

Consumers will be able to watch 'Paranormal Activity: The Ghost Dimension' and 'Scout's Guide to the Zombie Apocalypse' on digital platforms far earlier than usual for a Hollywood studio release.

The top lobbying organization for theater owners won't oppose Paramount's bold plan to make some films available earlier in the home.

"For several years, we've been asking studios to work with exhibitors on new models that can grow the pie for everyone while protecting the exclusive theatrical window. So we are pleased that Paramount spoke with exhibitors first. As far as whether this experiment will work is up for other theater companies to decide," said Patrick Corcoran, vice president of the National Association of Theatre Owners.

Earlier Wednesday, Paramount announced that mega-exhibitors AMC Theatres and Canada's Cineplex have agreed to let Paramount make two low-budget fall titles — Paranormal Activity: The Ghost Dimension (Oct. 23) and Scout's Guide to the Zombie Apocalypse (Oct. 30) — available digitally just 17 days after they are all but done with their theatrical run (the cutoff is 300 screens or fewer).

That means customers could watch them in the comfort of their own homes as early as six weeks to seven weeks — instead of three months — after they first open in theaters. Film companies argue that some types of films, such as genre titles like Paranormal Activity or Scout's Guide, have a short theatrical shelf life, yet are still bound by the 90-day window.

For years, studios and theater owners have been at odds over theatrical windows, including a very public showdown between NATO and Hollywood several years ago when several studios quietly pacted with DirecTV to release films early on premium VOD without notifying exhibitors (the studios ultimately scrapped the plan).

It's a sizable victory that AMC and Cineplex have agreed to play the two films, but the big question now is how many other exhibitors will participate in the maverick plan. Paramount began the process by only speaking with Cineplex and AMC; now, it is approaching other theater owners. As of Wednesday, larger circuits including Cinemark and Regal weren't commenting to the media.

For several years, many have speculated that one way to sweeten the pot for exhibitors is to give them a portion of early VOD revenue, and that is exactly what Paramount is doing.

"This is all about changing the definition of theatrical windows. Instead of starting the countdown from when a movie opens, we are starting from when it ends," Paramount vice chair Rob Moore told The Hollywood Reporter.

Moore stressed the experiment wouldn't apply to the studio's next release, Mission: Impossible — Rogue Nation (July 31); nor would it make sense for other big movies that have longer theatrical runs. In terms of films with a shorter shelf life, "what happens next depends upon how these two movies work," he said.

Added analyst Eric Handler of MKM Partners: "It's a great way for the studio to maximize their marketing prowess, and the exhibitors are now able to capture part of the downstream profit. Maybe it's cannibalizing a little bit on the box office, but they are participating. It certainly wouldn't work for Jurassic World, but it makes a lot of sense for some genres."