The end is here and its name is on demand movies. Forget the days when movies lingered for months in theaters. That’s already getting rarer. And it’s about to go extinct with a plan by the big four, WB, Fox, Universal and Sony to give DirectTV streaming rights on new releases 60 days later. The theaters are threatening boycotts, but how do you boycott the major studios and still have movies to show.
The development was inevitable. Movies are now expected to make most of their money in 2 or 3 weeks. Few movies stick around longer than 6 weeks and by then they’re making pocket money. A few million if they’re lucky. A few hundred thou if they’re not. The formula is a big opening weekend and then everyone goes home. Oscar worthy pics may get a boost later on, but that’s the rare exception. Indies stick around but the big studios aren’t big on the indie business now.
Theater owners are seeing red. Major investments in 3D and digital in partnership with studios were supposed to keep them all fat and happy. But the business model is bad.
Theaters and studios both complain they’re losing money. Even with studios covering promotion costs and theaters taking home a big percentage of the box office, theaters are not on solid ground. And studios are starting to look at theaters as one venue among many. It’s not a smart move when little divides them from just making video that can be streamed anywhere, but maybe it is.
TV licensing has always been big business, but that’s a fading business. Direct TV’s model promises a new era, or the death of the old one. With DVD sales in the toilet thanks to the big HD-DVD/Blu-Ray battle and the rise of internet content delivery, they’ve got to try something. The dwindling release window is leading to cannibalization. And that is going to force theaters away from the movie and toward more experimentation with premium concert and sports content.