Paramount signs early VOD deal with cinemas: The future of film distribution?
James R | On 12, Jul 2015
For all of its advantages and benefits, digital distribution has long been a source of contention in the film industry. Indeed, films have traditionally made their big bucks at the cinema box office long before anyone even considered watching them at home. In an age of the Internet, though, that distance has been increasingly been erased across the entertainment world: where once, the 12-month gap between Game of Thrones being broadcast on TV and hitting DVD might have seemed normal, it now seems out of date. The theatrical window between a cinema release and a home video debut, meanwhile, has been cut to 12 weeks, if not shorter.
Exhibitors, naturally, are none too happy: releasing films day-and-date online means that they are likely to get a smaller share of the pie, and pie is becoming harder and harder to bake. It’s something that Netflix has learned the hard way, as its plans to release original films theatrical and on VOD simultaneously have seen cinema chains boycott their titles altogether.
Now, though, Paramount has signed a landmark new deal with AMC Theatres and Cineplex Entertainment, which will see it release films on digital platforms within a few weeks of their cinema premiere. The films in question are not quite the big blockbusters needed to change the industry: Paranormal Activity: The Ghost Dimension and Scouts Guide to the Zombie Apocalypse. They will be released digitally 17 days after each film’s cinema release drops below 300 domestic cinemas.
Universal to back off in 2011 when it tried to offer the Ben Stiller-Eddie Murphy movie Tower Heist on Premium VOD just three weeks after it was due to open in theaters.
At that point, the cinemas will receive an undisclosed chunk of digital revenues for the period ending 90 days after the movies are first released, which will be proportional to their gross shares of the theatrical market.
“Movie-lovers want us to respond and meet their desires,” Paramount Pictures CEO Brad Grey is quoted as saying by Deadline. “Exhibitors want to keep their businesses strong. Filmmakers want us to put a premium on the theatrical experience and optimize consumer access to their creations. Our hope and intent is that this initiative offers a degree of innovation that benefits all parties.”
Some films make almost all of their box office revenue in six weeks or less. That leaves “a two month window where they are completely unavailable in the legitimate marketplace,” says
Paramount Worldwide Distribution and Marketing President Megan Colligan notes that some films make their box office revenue within six weeks, which means that old theatrical windows leave a two-month gap where they are unavailable legally. The deal, therefore, is a big move towards reducing the piracy window.
“For several years we’ve been asking studios to work with exhibitors on new models that grow the pie,” adds National Association of Theatre Owners spokesman Patrick Corcoran. “We’re glad Paramount has reached out to theatres.”
Paramount, meanwhile, says that it is already talking to other exhibitors to offer a similar deal. The agreement, of course, will still leave a 17-day window where people will not be able to watch the films online legally. Is this the future of film distribution? It’s certainly a step.