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Theaters: Studios Must Resist Shrinking Release Window for DVD

3 Apr, 2009 By: Erik Gruenwedel

Encouraged by record box office revenue despite the recession, the trade group representing theater owners said studios must resist further shrinking of the theatrical release window in the face of declining DVD sales.

The average theatrical release window in 2008 (before bowing on DVD) was four months and 13 days, which was six days shorter than in 2007.

Speaking March 31 at the annual ShoWest confab in Las Vegas, John Fithian, president and CEO of National Association of Theatre Owners, outlined a series of talking points underscored by 2009 box office revenue data through March 22 that was 8.8% above record 2008 revenues during the same period.

Box office sales year-to-date totaled more than $2.2 billion, compared to $2 billion during the same period in 2008.

Fithian said DVD revenue declined by 8.4% in 2008, with consumers increasingly opting to rent movies rather than buy them. He said consumers treat theatrical and DVD differently, and studios should do the same and not negatively impact box office revenue with reduced release windows in an attempt to buttress falling disc sales.

“In doing so, they only endanger the healthiest and largest revenue producing segment of the industry,” Fithian said.

Specifically, NATO said the top 10 theatrical releases in 2008 generated 2.8% more at the box office while declining 15% in revenue when released on DVD.

With an average ticket price of $7.18 in 2008, Fithian said going to the movies represented greater entertainment value than live sports events, live theater, music concerts and even bowling.

“Consumers are revealing their careful spending priorities in a way that bodes well for the cinema industry,” he said.

The home entertainment industry, which is still on track to double theatrical revenue in 2009 despite the economic downturn, counters that DVD and Blu-ray sellthrough and rental continue to generate greater margins and significant revenue.

DVD and Blu-ray distributor Wax Works recently began marketing bags to retailers outlining how a new release $4 movie rental offered greater economic value to a couple than going to the movies. Specifically, Wax Works said when adding together the cost of tickets ($18), soft drinks ($6) popcorn/candy ($9) and babysitter, a night out at the movies was about $45.

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