Studios Make Aggressive Push For Early Home Movie Rentals


Variety
reports five of the major Hollywood studios are making the push to have their films available for audiences to rent at home much sooner than distribution agreements currently allow.

Studios have exclusive agreements with theater chains to screen their films for 12 weeks before a film is able to release on Blu-ray and DVD. While some studios already take advantage of the agreements and release films for sale on VOD services a week or so prior to the Blu-ray release, Warner Bros. and Universal are now negotiating for a premium VOD release just weeks after a film’s theatrical debut.

20th Century Fox has also begun to discuss arrangements with theater owners, while Sony is trying to develop its own plan, having separate talks with exhibitors.

While most of the studios are engaged in separate negotiations with theaters, the arrangement that has the most support is to allow audiences to rent films just 17 days after releasing in theaters for $50. The rentals themselves would available for 48 hours.

The arrangement is very similar to the controversial Screening Room proposal introduced by Napster founder and Facebook co-founder Sean Parker, however, Screening Room being a possible third party platform would not offer exclusive deals with theaters.

After the collapse of the DVD business and the rise of streaming services, studios are under pressure to make up for the loss in profit. Executives who spoke on the condition of anonymity told Variety they hope to sign up three major exhibitors feeling most confident to close deals with AMC and Cineplex. But Cinemark is seen as the least likely to come to an agreement for early distribution.

Studio executives are also very aware of how tired audiences are of having to wait three months in order to watch a film at home.Warner Bros. CEO Kevin Tsujihara told analysts two weeks ago:

“It’s about giving consumers what they want. If we don’t give it to them, they’re going to go to pirated versions.”

For most studios, the films available to rent early would only range from low to mid-budget films, not big budget blockbusters. Fans of DC, Marvel, and Star Wars films may still have to endure the arduous wait for a traditional home release. But some studios are interested in mixing in event films with smaller releases.

Negotiations themselves seem to be far from being settled. Warner Bros. and Universal are interested in setting a fixed time for early home releases while Fox and Paramount are more interested in a flexible release that would see a film made available for rent at home as soon as it sees a significant drop in box office gross. Some executives are going as far as to push for simultaneous theatrical and home releases.

Coming to an agreement with theater chains won’t be the only challenge, however, as anti-trust laws prohibit the studios from working together to solve the industry-wide problem. Instead, each studio will have to come up with their own solution separately.

Exhibitors are also negotiating for transparency into how the studios collect and disburse digital revenues to ensure they are receiving their fair share of the profit. Studios have offered up to 20% of the profits, however, exhibitors want assurances those agreements can be renegotiated on the fly if there is evidence early home releases are significantly impacting their business as they fear the service will lead customers to skip the theater entirely and wait for the home release instead.

Bloomberg also reported back in December that Apple is also in the mix with talks to have earlier access to films available on iTunes, however, the concern is whether or not iTunes is a secure enough platform for delivering films that are still in theaters.

Source: Variety