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The Neverending Story: Windows

15 Apr, 2011 By: Stephanie Prange

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Just when we thought the studio window story was finally settling down, it’s baaaaack.

After a spate of conflict last year, the studios that had wrangled with Netflix and Redbox privately and in the courts finally nailed down windows on new-release discs and settled into a more comfortable, if not wholly friendly, relationship with the two rental companies.
Somewhat satisfied they had safeguarded content in the disc rental realm, the studios this year turned their attention to the window between theatrical release and disc release to try to wring more profit from the content pipeline via a new scheme: premium video-on-demand.

Studios hope to entice consumers to pay a higher price (about $30) to view a new title prior to disc release and 60 days after its theatrical bow. Pushing them, no doubt, into this new venture is the same thing that pushed them to  re-examine disc rental windows: declining sales.

It’s no secret that the theatrical business — following the exciting steroid injection of high-priced 3D theatrical revenue — has hit a slow patch. This makes it vulnerable to a re-evaluation by the studios, just as declining DVD sales made studios rethink their relationship with packaged media.

It’s debatable as to whether the theatrical business is just undergoing the usual title-related slowdown or a seismic shift. Certainly, when DVD sales first began to falter, many blamed the quality of the titles.

But it may be the same thing that has hurt the disc sellthrough business that is inflicting damage on the theatrical take: lower-priced, more convenient alternatives, including home theaters and streaming. The home theater experience — with the penetration of HDTVs and Blu-ray Disc — almost approximates going to the movie theater. Indeed, it’s much more comfortable to watch a movie at home. As for streaming, it’s not quality but quantity that may be hurting theaters (and not just via piracy). Streaming consumes an ever-increasing piece of consumers’ free time. If you are watching a bunch of catalog movies or old TV shows on Netflix, you won’t have time to go to the movies. Time, unlike online content, is limited.

As for premium windows, they are all about timing. They bank on consumers who have a lot of free time paying a premium to see the latest thing. In this economy and with the explosion of content online, I’m just not sure those consumers are as prevalent as they once were.

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