Universal Pictures and Warner Bros. are among the studios in talks with Comcast and Apple to offer premium movie downloads for $30 to $50 each.
According to Bloomberg, the companies are in talks to offer films just weeks after their theatrical releases. The studios are eager to introduce a new service which could hopefully prop up sagging home entertainment sales.
However, Disney is not one of the studios involved in talks, as the company continues to enjoy success at the box office. Last year, Disney raked in more than $7 billion globally thanks to top-grossing films including “Rogue One: A Star Wars Story” and “Finding Dory.”
Disney recently revealed a new strategy for monetizing its live action and animated Disney and Pixar films after their theatrical runs. The company will launch a branded streaming service for those films as well as other exclusive, original series and movies.
But for other studios, the talks are progressing and, according to the report, a deal could be in place as early as next year for studios to begin offering digital downloads of films two weeks after their theatrical release.
Of course, this report does not bode well for movie theater chains like AMC Entertainment, Regal and Cinemark. But for studios, this move could help prevent what Barclays analyst Kannan Venkateshwar calls “leakage.”
“We note that the average exclusive theatrical window is ~102 days, but ~50% of the box office collection for the top 10 movies happens in the first two weeks (80% of box office revenues for most movies are collected in the first 10 weeks). This varies quite a bit by title and genre, as a result of which shrinking the window size could be tiered rather than uniform across all movies. As a result of this skew in collections, there is effectively a period of ~5 weeks or more when the movie is essentially not being monetized on any platform,” wrote Venkateshwar in a research note.