Seeing Through Windows Darkly

One of the biggest home entertainment themes of this year will be windows — which supplier offers them to what outlet and when. But it’s anyone’s guess how it will all shake out, and it’s never been more complicated, with numerous outlets looking for a piece of the studio pie.

Warner had the first big announcement of the year with its agreement with Netflix for a 28-day window for new releases. The windowing of Redbox by Fox, Universal and Warner — currently embroiled in the courts — already is having an effect on which titles the kiosk retailer carries, according to analysts and industry observers. Cable companies, meanwhile, are trumpeting same-day video-on-demand releases with disc, albeit at a higher rental price than Redbox’s $1.

We in the home entertainment business have been living with windows for a long time. At one time we had a pervasive “rental” window, which fell for the most part about five to six months after the theatrical release. Then the DVD format came along and the rental window dissolved, with every title priced for sale (five to six months after theatrical) to consumers more interested in collecting movies than ever. Also, the window between the theatrical and DVD releases began to shrink, with movie theaters crying foul.

Now, old is new again. The theatrical business, like the rental video business, is experiencing a resurgence, and studios, which had grown comfortable with the DVD sellthrough window as it was, are looking to change the terms to keep disc sellthrough robust.

But will the consumer bite? Certainly, consumers would like to purchase certain films on disc, especially Blu-ray Disc, which offers superior picture and sound. But will they be so interested in seeing a movie at home as soon as possible that they will buy instead of wait a month to rent a title they don’t necessarily want to own? Will consumers even notice the window?

As far as the theatrical window, that, too, may continue to move. A disc sale still has an advantage over a ticket sale, in that the studio gets $15-$20 upfront, rather than a portion of the theatrical take. As a consumer I would ideally like to buy the film as I leave the theater (especially when I have kids in tow who are asking why the movie is not yet on disc).

Windows always have been a negotiation between studio profitability and consumer demand. The terms of the new deal are up in the air.