Hollywood studios are planning a new marketing strategy intended to make up for stagnant movie audiences by making the latest film releases available in homes two weeks after debuting in cinemas.
During an investor conference call earlier this week Kevin Tsujihara, head of Time Warner Inc.’s Warner Bros. unit revealed that he had held “constructive” talks with exhibitors about a premium home-video offering and is preparing to move ahead.
The pricing point is in line with the average cost for a pair of tickets at cinemas in cities like New York and Los Angeles.
“We’re working with them to try and create a new window,” Tsujihara said. “But regardless of whether it happens or not -- whether we are able to reach that agreement with them, we have to offer consumers more choices earlier.”
Comcast Corp.’s Universal Pictures confirmed that it was also in the midst of discussions with theatre operators about making films available sooner to consumers at home.
Cinemas still account for a major share of Hollywood’s film revenue and so the move is likely to trigger tensions with exhibitors.
Two of the largest US chains in Regal Entertainment Group and Cinemark Holdings Inc have resisted Hollywood’s attempts to cut into the exclusivity period they have with new movies and so the two-week window is likely to be a point of contention.
Early home-video releases of new films would upturn an industry tradition that predates pay TV and the existence of streaming services such as Netflix and Amazon Prime. Many cinema chains have enjoyed up to six months of exclusive rights to new releases however that window is now narrowing as streaming services increasingly make their make and reshape consumer behaviour.
It remains unclear whether film studios would market the home rental films directly to consumers through their own platforms or through third parties such as streaming services.