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Theater Group Tells Fox CEO James Murdoch to 'Learn' Movie Biz

22 Sep, 2016 By: Erik Gruenwedel

21st Century Fox CEO James Murdoch

The day after 21st Century Fox CEO James Murdoch told an investor group the industry must rethink the theatrical release window, National Association of Theatre Owners CEO John Fithian wrote a letter chastising Rupert Murdoch’s son for willfully ignoring industry practices.

Fithian, in a letter to Deadline.com, said the 90-day theatrical window for new studio releases is important for sustaining the industry’s distribution ladder, which includes home entertainment. He said the trade group has never mandated the length of the window, preferring distributor and theaters iron out specifics.

The CEO said NATO has since 2010 called on theaters and studios to find “more sophisticated release models” that could grow revenue for all parties.

“Those substantive, private conversations with exhibition’s long-time studio partners have taken place without self-serving public pronouncements, and are taking place currently with several major studios, including Fox,” Fithian wrote.

The executive said Murdoch would be wise not to undermine the trust Fox has generated among theaters.

“Welcome to the movie industry Mr. Murdoch. We hope you’ll take some time to learn how it works.”

Murdoch Sept. 21 told analysts at the Goldman Sachs Communicopia Brokers Conference in New York that the existing theatrical window ignored changing consumer habits.

“We have to think about these crazy hold-backs that theater owners put in place — these blackout periods,” Murdoch said, adding the consumer doesn’t care about organizations such as NATO.

He would like the industry to push the envelope — including revisiting premium video-on-demand — to get consumers excited about feature-length movies in an age of episodic television.

“Our business rules are of no interest to families who just want to see the movie,” Murdoch said.

Last October, Paramount Pictures experimented with chains AMC Theatres and Cineplex Entertainment, offering revenue sharing from digital distribution of Paranormal Activity: The Ghost Dimension and Scouts Guide to the Zombie Apocalypse — 17 days after their theatrical runs dropped below 300 theaters domestically.

Netflix has an ongoing policy to release original new-release movies in select theaters simultaneously with worldwide streaming access. The practice has all but killed the box office for Beasts of No Nation, Crouching Tiger, Hidden Dragon: Sword of Destiny, Pee-wee’s Big Holiday, and Adam Sandler’s The Do-Over and The Ridiculous 6.

Regardless, Murdoch suggested the writing was on the wall for the theatrical window.

“We have to make movies more available. We have to price them in a smart way. There are a lot of changes over the next couple of years that are going to be very exciting for the film business.”

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