Cinema Without the Cineplex

Why Video-on-Demand is the future your movie theater doesn’t want you to know about

On an average week, about eight films are released theatrically in the U.S. Of those eight, only two will open at your local cineplex regardless of which podunk suburb you’re trapped in. Three will open in “limited release,” which means they’ll get shown only in the top five to 15 “major markets” (i.e., cities such as Chicago and San Francisco), before gradually “rolling out” to smaller markets (if they do well at the box office). The remaining three movies will open in New York and/or Los Angeles.

In practice, this means that Las Vegans who want to see Nicholas Winding Refn’s latest film, Valhalla Rising, will have to put it in their Netflix queue or wait to purchase it on DVD. This out-of-date distribution model excludes millions from seeing 75 percent of new films. But technology has brought a potential new solution: streaming video-on-demand (VOD) movies the same day they are released in cinemas.

The industry is full of bellowing Cassandras who believe that this form of distribution will bring down cinema chains. Theater companies have threatened to cease releasing a specific studio’s films if they dare deliver titles through VOD on the same day a film opens in cinemas.

Magnolia Picture’s daring Magnet division recently drew the battle lines. It took advantage of the FCC’s April ruling allowing studios to stream films in advance of theatrical release, and they ran George A. Romero’s Survival of the Dead at a premium price on VOD Amazon and XBOX LIVE a month before it hit the cinemas. Blood is in the water.

Ten years ago, the typical lag time on DVDs was six months after release. Earlier this year, Europe’s top cinema chain Odeon boycotted Disney’s Alice in Wonderland due to the studio’s plan to release the DVD 12 weeks after the film’s theatrical premiere. Now, 12 weeks is the standard lag time for a DVD release after a theatrical premiere, and 28 days is the lag time for rentals or streaming through companies such as Netflix and Redbox. I predict that by the end of the year, the timeline will shrink even more.

Blu-ray discs have momentarily juiced up flagging DVD sales, but the market is slipping. Disney is now looking ahead to online distribution, but they’re already behind multi-platform production and distribution companies such as IFC, Magnolia and Variance Films.

EpixHD, (a company jointly owned by Paramount, Lionsgate and MGM) is an online premium movie channel that delivers stockpiled films over the Internet as HD-quality VOD. Viewers can even “share” movies with fellow subscribers to watch the same film from as many as four different locations. EpixHD’s chief digital officer Emil Rensing paradoxically defended the aggressive stance that theater chain owners are taking against day-of-release VOD movies.

On the other hand, Variance Films President Dylan Marchetti doesn’t think simultaneous day-of-theatrical-release and VOD will become an industry-wide practice. Though he does think it’ll help indie filmmakers find a national audience.

“I think it works in the indie world,” Marchetti says. “And we’ve seen hard figures that show theatrical box office isn’t hurt by VOD availability most of the time on independent/arthouse films. But for big Hollywood films? I have a hard time believing the major theater chains are going to let that happen—that’s a mighty risk. What if Twilight were available on VOD [on the same] day and date? Would you see millions of people hitting the theater at 12:01 on Tuesday? No chance, and everyone knows it.”

In my mind, though, VOD is already poised to serve the full spectrum of blockbuster, foreign and independent films. Hollywood is dying, and charging audiences 50 percent more to see a movie in mediocre 3-D isn’t going to save it. Someone traveling on an airplane is just as likely to take a chance on Lisa Cholodenko’s film The Kids Are All Right on the day it comes out as they are to watch Date Night, weeks after it premiered. iPad users in Las Vegas might want to watch J. Blakeson’s The Disappearance of Alice Creed on their device the day it opens in New York and Los Angeles, even though it’s not playing at a local cinema. I also believe that just as many hormone-raging girls would plan a Twilight slumber party on the day the movie comes out, as they would fill cinema seats. It all comes down to creating an additional income stream for an out-of-balance industry. In the early ’80s MTV’s slogan was, “I want my MTV.” For the next generation of movie audiences it’s, “I want my VOD!”

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