Regal, Cinemark Nix Trailers in VOD Spat8 Apr, 2011 By: Erik Gruenwedel
Two of the nation’s largest theatrical chains said they will stop showing trailers and displaying signage for new releases earmarked for premium video-on-demand.
Regal Cinemas and Cinemark Entertainment said the boycott will take effect April 15, targeting movies Warner Home Video, Sony Pictures Home Entertainment, Universal Studios Home Entertainment and 20th Century Fox Home Entertainment indicate will be made available to satellite operator DirecTV later this month.
“Based on the recent announcement regarding premium video-on-demand, we are amending our policies for support of films from studios participating in the new VOD model,” said Regal CEO Amy Miles in a statement. “It is simply not in Regal’s best interest to utilize our resources to provide a marketing platform for the release of premium VOD movies.”
Miles said the theatrical chain would also cut in half the number of trailers it screens.
El Segundo, Calif.-based DirecTV is slated to bow several theatrical releases eight weeks after their box office bow as part of nascent Home Premiere transactional VOD platform. The unidentified titles would be available for $29.99 each, and at least four weeks before the traditional retail window. Similar premium VOD platforms are reportedly slated to follow on Comcast and Vudu.
Cinemark CEO Alan Stock told The Hollywood Reporter the theatrical chain was not in the business to promote DirecTV or VOD. Studios will have to be up front about a title’s subsequent release windows before Cinemark or Regal commit to it. AMC Theaters is reportedly considering similar action.
“Our goal is to promote and advertise movies for their theatrical run,” Stock said.
Richard Greenfield, analyst with BTIG Research in New York, said the studios should respond swiftly and brutally. He said studios should begin raising film revenue splits on a weekly basis until the trailers return.
With theatrical attendance and revenue down 20% year-over-year, Greenfield said theatrical operators are making a big mistake killing trailers – a promotional vehicle he said drives attendance.
“We believe studios should not even bother negotiating with exhibitors on these new policies related to trailers,” Greenfield wrote in a post. “Studios need to find more ways to make money in a film business that is suffering from falling home entertainment profits.”