Breakthrough looms on release windows
It’s not a done deal but talks between distributors and exhibitors are progressing, perhaps inexorably, towards a far more flexible regime for releasing films theatrically and on home entertainment in 2016.
Many executives hope and expect the traditional holdback of 120 days will be reduced to 90 days for the vast majority of the majors’ films.
For some independent films, particularly those that have a short cinema run, the gap is likely to be significantly shorter, which would benefit the vast bulk of Australian titles.
Some home entertainment distributors are pushing for day-and-date releases with the US for both theatrical and VOD/DVD, in part to minimise the potential for online piracy.
Conversations between the major players are expected to continue – behind closed doors- at next month’s Australian International Movie Convention.
If a consensus can be reached, some films that are due to open in December, including Disney’s Star Wars: Episode VII- The Force Awakens and The Good Dinosaur and Fox’s Alvin and the Chipmunks 4, could be released on VOD and DVD at Easter- a 90-day window.
Distributors have long argued it makes no commercial sense to leave films on the shelf for 120 days after they open in cinemas, particularly those that are yanked off screen after a few weeks.
They say the films that have gone out on a 90-day window under a deal between the Hollywood studios and the major circuits in the past 20 months have benefitted from the shorter gap, with zero impact on their B.O. takings.
Among the 90-day releases this year were The Water Diviner, The Hobbit: The Battle of the Five Armies, The Hunger Games: Mockingjay Part 1, Big Hero 6, Cinderella, Pitch Perfect 2 and Mad Max: Fury Road.
Similarly in New Zealand, where there are no fixed windows, films are often released on varying windows due to the parallel importing regime for DVDs, with no adverse effect on grosses.
Distributors point to the increasing trend to compressed windows in the US as proof that product needs to be made available to consumers as speedily as possible.
The average DVD window in the US for the majors’ titles dropped from 4 months 1 day in 2013 to 3 months 26 days last year, according to the National Association of Theatre Owners.
For EST releases the average was 3 months 11 days but for some independent titles the gap in the last quarter of last year was just 2 months 17 days.
Distributors say most films that gross up to $500,000 do not make money theatrically and, depending on the P&A spend, the margins can be slim on those that generate $1 million-$2 million. So no one benefits if those titles sit on the shelf for up to120 days- except piracy websites and file-sharers.
This year Transmission Films negotiated one-month windows for Slow West and Strangerland after their Sydney Film Festival premieres but both were classified as mini-festival releases and, like alternate content, fell outside the usual 120-day holdback.
While all parties agree the theatrical window must be protected, support for more flexible release patterns is growing among some exhibitors.
Wallis Cinemas’ Bob Parr and Sasha Close told IF, “The debate is worth having if 90 days is fair to all parties. To make sure cinema has films for a range of tastes we also need smaller films which can struggle to make a profit. There is no doubt that these titles can’t wait 120 days when they will be forgotten.
“The one size fits all models for the 120 days window clearly doesn’t work in the present climate for the majority of films and we need to be open to a considered discussion on a film-by-film basis or come up with a model that best suits the industry now.
“We are screening many small titles which could never play a season using Tugg and FanForce. These platforms have enabled these titles with a specific demographic to see them at special one-off sessions taking away the economic risk.
“This year we have seen a lot of Australian films with exciting results. However, even with their success, many would not go into profit theatrically. A 90 day window would be acceptable to help our own industry make films for cinema.”
Palace Cinemas CEO Benjamin Zeccola says, “I think Australian distribution and exhibition partners are dealing with windows in a sophisticated way: by respecting rights-holders, viewers, distributors and exhibitors interests and finding mutually rewarding solutions. For as long that continues we will continue to see healthy innovation in this field.”
As talks continue, watch this space.