On April 19, 2011, DIRECTV launched its much-discussed premium video-on-demand service. A service that offers customers to watch newly released movies only after 2 months they hit the theaters for the price of $29.95. Recent films that aired include Battle: Los Angeles, The Diary of a Wimpy Kid: Rodrick Rules and Sucker Punch.
Now dozens of Hollywood directors and producers are criticizing this plan by the major Hollywood studios to release movies in the home early while their movies are still playing in the theaters. James Cameron and Peter Jackson were the first two who signed the letter prepared by the National Association Of Theater Owners, which now also includes M.Night Shyamalan, Christopher Nolan, Quentin Tarantino and Jon Favreau.
As an aspiring screenwriter, I can understand the grief of these filmmakers. I mean they work hard and consume long days and nights to make a film and they are not only filmmakers or writers, but movie fans as well. I personally find it preposterous, for if I were a filmmaker myself, I would be saddened and broken hearted seeing my film playing in homes while it’s playing in the theaters.
This is not the case of being selfish and greedy, please don’t think that. The average theatrical release window is over four months. The theatrical release window model has worked for years for everyone in the movie business. Current theatrical windows protect the exclusivity of new films showing in state of the art theaters bolstered by the latest in digital projection, digital sound, and stadium seating.
The letter that NATO prepared and signed by all the filmmakers states that, as a crucial part of a business, last year grossed close to $32 billion in worldwide theatrical ticket sales, we in the creative community feel that now is the time for studios and cable companies to acknowledge that a release pattern for premium video-on-demand that invades the current theatrical window could irrevocably harm the financial model of our film industry.
And, I must agree with the letter, for studios are struggling as you read to replace the revenue lost by the declining value of DVD transactions. Low-cost rentals and subscription are undermining higher priced DVD sales and rentals. But the problem of declining revenue in home video will not be solved by importing into theatrical window a distribution model that cannibalizes theatrical ticket sales.
The letter also brings up some very important points that the history has shown the price points cannot be maintained in the home video window. What sells for $30-a-viewing today could be blown out for $9.99 within few years. If wise heads do not prevail, the cannibalization of theatrical revenue in favor of a faulty, premature home video window could lead to the loss of hundreds of millions of dollars in annual revenue. Some theaters will close. The competition for those screens that remain will become that much more intense, foreclosing all but the most commercial movies from theatrical release. Specialty films whose success depends on platform releases that slowly build in awareness would be severely threatened under this new model. Careers that are built on this risks that can be taken with lower budget films may never have the chance to blossom under this cut-throat new model.
Thanks to Hollywood Reporter. You can read the rest of the letter signed by these filmmakers and you are welcome to post your comments below. Let us know what are your thoughts? Would you pay $30.00 to watch the movie at home or watch it with your family in the big screen? This is what I think, film fans will say no to Premium VOD and go watch it in theaters to enjoy the magic that movies present.