How Much Would You Pay to Stream a New, First-Run Movie?
March 22, 2017 by Paul AusickMovie studios and theater owners are talking about shortening the between a movie’s first theatrical release and the first day the movie may be streamed. The gap between the so-called “release window,” when theaters have exclusive rights to exhibit a film, is typically around a year, but the time until the movie makes it to a streaming service may be another year.
Recent conversations among studios, theater owners, and streaming video providers have centered on a price ranging from $30 to $50 with a time frame of 17 to 45 days after theatrical release.
Currently, between the theatrical window (typically 90 days0 and the release to streaming, the film will go on sale exclusively on DVD before going on to DVD rentals, on-demand cable viewing, and, ultimately a streaming service. Companies like Apple Inc. (NASDAQ: AAPL), Netflix Inc. (NASDAQ: NFLX), and Amazon.com Inc. (NASDAQ: AMZN) would like streaming release to follow theatrical release by no more than a few weeks.
Seven of eight major studios are willing to talk about shortening the release window, Lions Gate Entertainment Corp. (NYSE: LGF) and Viacom Inc.’s (NASDAQ: VIAB) Paramount among them. Only The Walt Disney Co. (NYSE: DIS) has shown no interest in the discussions.
Theatre owners , like Regal Entertainment Group (NYSE: RGC), are hostile to the idea of shortening the theatrical window and have used their distribution power to beat back earlier attempts to shorten the window.
According to a report in Variety, Warner Bros. began the discussions with a price tag of $50 after a theatrical window of just 17 days. Since then a price of $30 with a longer window — 30 to 45 days — has also been discussed. Theater owners would get a piece of the action, but the size of that piece is still unsettled — and probably will be for some time.
According to BoxOfficeMojo, the average theater ticket price last year was $8.65, so $30 for a family of four probably won’t do the trick. A price nearer $50 seems more likely, and that will still face opposition from theater owners who have taken the position that their 90-day window is a minimum. Stay tuned.
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