Movie chains AMC and Cineplex almost on board with theatrical window collapse, studios say

Major studios have offered to cut exhibitors in on as much as 20% of the profits from same-day digital releases.

The day when consumers can pay a premium to rent movies the same day they debut in theaters is closer than it’s ever been. 

According to Variety, studio executives believe they are close to getting two of three major North American exhibition chains—AMC and Canada's Cineplex—on board with a plan to release movies within their theatrical launch. A top-level distribution executive for a major studio told FierceCable that studios have backed off a push for "day and date" release of films into the home entertainment window and are now seeking release 17 days -- or three weeks -- after theatrical launch.

The report said the major studios have offered to cut exhibitors in on as much as 20% of the profits from such digital releases. Slowing the process: The theater chains want a bailout clause, in case the North American consumer population decides that it never wants to hassle with parking and $6 sodas again.

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The theater guys also want some standardization. For example, studios wouldn’t be able to rent or sell movies for home video prices until they’ve been in the theatrical/premium release window for 90 days. This is a tough one. Such a rigid rule might make sense for a hit like Warner Bros.’ "The LEGO Batman Movie," which showed “legs” by grossing more in its third week than it did its second.   

But on the other hand, the rule, would hurt a film like Paramount’s "xXx: The Return of Xander Cage," which saw its gross decline to practically nil by its fifth week. There’s no reason to wait for that film to enter the home entertainment window. 

The major studios are pushing the window collapse harder than ever, with younger consumers increasingly turning to digital piracy to see new-release films. Their DVD and Blu-ray business, meanwhile, has begun to plummet again after briefly stabilizing. Variety said that Walmart-owned Sam’s Club has even considered getting rid of the disc section. 

This collapse also has relevance, of course, to operators that are home entertainment adjacent, like pay-TV and SVOD companies. It’s unclear, for example, if companies that have deals to sell and rent digital movies in the home entertainment window, like Comcast, will be part of premium window schemes.

It’s also unclear whether companies like Netflix would continue to be able to work directly with filmmakers on simultaneous theatrical/home releasing if a standardized deal were to be carved out between studios and exhibition chains. 

Variety noted that Screening Room, a startup that includes Napster/Facebook/Spotify benefactor Sean Parker as a backer, has been considered as a possible third-party broker of such a premium release window.