If you want to know what the lynch pin in the ongoing cold (but increasingly heating up) war between studios and exhibitors (Variety, 11/28/09) it’s that their priorities, once more or less in alignment, are more and more competing against each other.
Studios want to make as much money as they can, whether it’s through domestic or international theatrical exhibition or through some form of home video platform. For the last decade home video – specifically DVDs – have made up a good chunk of each film’s profitability. But that’s slipping and they’re looking for ways to prop that market up. To cater to what they’ve found to be new consumer behavior and desires they’re taking a fresh look at things like the timing of those home video releases.
Exhibitors – in this case defined as theater owners – want to make as much money as they can and preserve the idea that going to the theater being a special event, the preferred way to see a movie. Movies, though, aren’t where they make much of their money. Sure, they do make money from the tickets they sell, but the percentage of each ticket they keep goes up every week the movie is there, with the studio taking the lion’s share up-front. To counter that imbalance the theaters charge you $4.00 for a bag of popcorn and join ad networks to run commercials before the film starts.
Studio’s desire to put the movie in the consumer’s hands in the consumer’s preferred way, no different than any other consumer packaged goods manufacturer.
Exhibitors want the consumer to come to their location in order to watch the movie, no different than any other consumer packaged goods retailer.
So if the motivations are the same as they are in other industries why are we seeing such a clash?
Because not many other consumer products are currently subjected to a tiered release pattern.
Because not many other consumer products can be delivered in a variety of ways. You can’t download bread or milk.
In addition to that fundamental difference you have – and this is something that frequently gets overlooked when discussing this problem – the fact that the massive (sometimes) marketing campaigns studios mount are focused on driving behavior within a very limited time period. Part of the move by studios to shorten the theatrical-to-DVD window of time is to bring that home video release closer to the marketing campaign in order to make the money laid out for that campaign go, at least hypothetically, farther. As budgets tighten at studios, they need to increase the ROI for every dollar spent and re-thinking release patterns is certainly part of that.