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)