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There’s been a lot of discussion lately in the movie industry about windows and the ever-narrowing gap between theatrical and home video releases. Gregory S. Marcus is the president and CEO of the Marcus Corp., which owns or manages nearly 700 screens in the Midwest. Marcus recently published an essay in The Hollywood Reporter arguing against shortening theatrical windows and pleading with studio execs to reconsider such a move.

While Marcus’ status as the head of a large chain of theaters obviously doesn’t make him the most objective commentator, his reasons are interesting and well worth a read. Here are some highlights from Marcus’ arguments:

Windowed release patterns are brilliant

“Release a movie to different outlets over time so it can be sold to the same person multiple times. First see it in the theater, then buy or rent it, then catch it on cable or TV. Shorten the window and risk losing the ability to sell the product multiple times.”

Windows allow the distributor to charge a premium for immediacy

“The earlier someone wants to view the product, the more they pay. As the only window able to charge per capita, theaters collect the most per head. As the product moves through ancillary markets, the price per head declines. It won’t take many people (trading out of the theater) attending a premium VOD “viewing party” to negatively impact per capita revenue.”

Shortened windows harm exhibitors, and by extension, the overall movie business

“…exhibition is a high, fixed-cost business. Rent is expensive, as is paying people to operate a complex. The marginal revenue the studios might be willing to sacrifice at the theatrical window would decimate exhibitor’s profits.

It is not as if exhibitors have outsized returns. If too much revenue leaves the theatrical window, further investment in state-of-the-art facilities will dry up as will maintenance capital. Over time, theaters would become less and less desirable to the consumer, leading to even greater unprofitability. The negative impact on the prime venue for the great American art form could be significant.”

Shorter windows won’t necessarily decrease piracy

“No one knows how much — if any — theft will be prevented by a premium VOD window. The risk of negatively impacting the pricing scheme, however, seems high and not unprecedented. I find it hard to believe studios really like rentals for a $1.

Please don’t say, “We need to give the consumer what he wants,” because the historical implication was, “or your competitor will provide it,” not “or the customer will steal it.” The proper response cannot be to cede to the thieves’ demands and earn less along the way. . . If I were the studio execs, I would focus on catching and punishing thieves and look for less destructive opportunities to grow my business.”

(via The Hollywood Reporter)

8 Responses to “Shortened Theatrical Windows a Bad Idea?”

  1. Member [Join Now]
    Bikemiles [bikemiles]

    If a movie sucks it sucks. Word will get out. I actually have a single screen second run neighborhood theater in my neighborhood http://riverviewtheater.com They do well with post DVD release movie. I have talked to a number of people in the Riverview lobby who say that if a Redbox movie is good, they watch it at the Riverview with all the bells and whistles.

  2. Visitor [Join Now]
    UBM [visitor]

    High ticket prices, high concession prices…The Theatrical business has long been in decline, and the fact that you can now get ( at current levels) 70″ of HDTV (1080i)
    in your living room, makes the “movie going experience” obsolete.

    Here is a real consumer story for you:

    When the biggest TV I could afford while in college was a 19″ B&W,
    which was handed down to me, I went to the movies twice a week.

    When I graduated, got my first job, and my first apt., and bought a 27″ color TV,
    I went to the movies once a week.

    When I got my third job (the highest paid job I had out of my other two previous ones) I bought two 32″ color TVs, one for the living room
    of my new home, and one for my bedroom, I went to the movies once a month.

    I now have a 42″ Samsung DLP in the living room (720p) and a 40″ RCA (720p)
    in the bedroom. I go to the movies once a QUARTER ( EVERY 3 MONTHS).

    Guess what will happen when I get the living room up to 60″ at Christmas?
    :)

    Movie studios have become the niche market of the movie business,
    and the studios know that, the consumers know that…only people
    who don’t know that is the movie theatre people…..

  3. Visitor [Join Now]
    Agreed [visitor]

    Hear, hear! The movie industry is so arrogant, they confuse their lame form of entertainment with some vital necessity: it’s not like we have to give them money for their garbage (what’s the last true classic movie you can think of?) If I can watch something for little money, I will. Otherwise, there are plenty of old ones I can get from libraries (and other sources) for free.
    Geez, I’m glad health care is not in the hands of people like that! (Or, is it?)

  4. Visitor [Join Now]
    rb [visitor]

    I thought the studios actually make a nice profit this past year with theater goers….Wasn’t there a post on this site about it? Anyway, if the studios shorten the theatrical window think they are just shooting themselves in the foot again,…Much like when they had the brainy idea of having an on-demand/streaming ability for a movie same day as the movie opens at the theater.

  5. Visitor [Join Now]
    Wesley [visitor]

    There are several problems with the movie theater business model.

    The first is that they are relying on someone else’s product. They are nothing without the movie studios, but the movie studios don’t need them. That’s really bad for the cinemas.

    Secondly, their competition (cheap and free video entertainment at home) is getting more and more prevalent and easy to consume.

    Lastly, jerks go to theaters, and it doesn’t take many to ruin the experience for everybody else. Because the theaters are running on a razor thin margin, they can’t hire effective ushers that will actually do anything about these people.

    I think we’re nearing the end of the cinema era. Soon, “Direct to DVD” will be a selling point, not an insult.

  6. Visitor [Join Now]
    will [visitor]

    Everybody whines about the lack of civility and high prices for tickets and concessions at the multiplex, but the fact remains that the theatrical release window still makes up the vast majority of movie revenues, and that won’t change. The studios are trying to shorten the window in order to reduce the advertising spend on subsequent windows, but that pales by comparison to the revenue loss that would be caused by shortening the theatrical window. Training moviegoers to wait a couple of months for features to show up on VOD is penny wise, pound foolish. There’s a reason why the phrase ‘direct to video’ has a negative connotation. Wanna see Redbox filled with more of this cheap, lowest-common-denominator junk? Be careful what you wish for…

  7. Visitor [Join Now]
    Tony [visitor]

    I do find the cost of going to the theater prohibitive. For two tickets, a medium popcorn and sharing a drink at the most recent viewing I went to in a theater it was almost $50.

    I will also say though, that even among my friends with insanely large and expensive home theater equipment at home, going to the theater itself is an experience. One that we are occasionally willing to shell out the cash for/ There are just some movies that are best viewed at least once in the theater. Just like with books. Sure, e-books are really convenient, and I read them, but there is also something about holding a book in your hand and turning the pages.

    But for me, and those in my circles, the cost is what keeps us out of the cinema’s. Not the availability of ridiculously large televisions or knowing i can catch it on dvd or online soon.

  8. Member [Join Now]
    bigmama9987

    I have always loved the experience of going to theaters and drive-ins. Unfortunately, I can rarely afford the cost anymore.