This article starts with 2929's plan for day & date release to theatres and video. But there are also some good tid bits on how others look at this as a way to fight piracy.
http://news.yahoo.com/news?tmpl=story&cid=599&e=2&u=/nm/20050527/media_nm/film_cuban_dc
By Nicole Sperling Fri May 27, 9:12 AM ET
LOS ANGELES (Hollywood Reporter) - If billionaire Mark Cuban has his way, theatrical distribution may never be the same.
2929 Entertainment, the company the Dallas Mavericks owner founded with partner Todd Wagner, is determined to collapse the traditional distribution windows by simultaneously releasing films across theatrical, home video and cable. But even though the experiment has barely begun, it already is running into steely opposition from theater owners across the country.
While 2929 announced late last month that it plans to produce and then release six Steven Soderbergh films on the three platforms simultaneously, exhibitors already are saying they will refuse to play the director's new fare.
As an owner of two of those three distribution outlets -- it controls Landmark Theatres and the high-definition cable channel HDNet Movies -- 2929 has the ability to fulfill its agenda on a limited basis. But if the company aspires to distribute Soderbergh's product beyond Landmark's 209 screens, it faces a formidable roadblock in that many commercial theaters have refused to play product that is released in other formats at the same time as it is offered to theaters.
"Our policy will continue to be that we don't exhibit films that are already in the market on DVD or pay-per-view," said Mike Campbell, president and CEO of Regal Entertainment Group, the largest U.S. theater chain. "We believe the plan is ill-conceived and won't receive much support from the traditional exhibition or distribution community."
Said Tony Karasotes, chairman and CEO of Chicago-based Karasotes Showplace Theatres: "I just think it's a wrong-headed approach. The way to properly distribute film is to use the traditional sequential pattern set up by the studios. (2929's plan) is ass-backwards, and I don't want to encourage that kind of approach because I own motion picture theaters."
AMC Theatres, Loews Cineplex, Cinemark USA, Pacific Theatres, National Amusements and Wisconsin-based Marcus Theatres, among others, all have declined to play films with simultaneous release in the home market.
"We just have to show them results," Cuban said. "By pricing the DVDs at a premium for day-and-date delivery, I think we help create a better value for in-theater viewing. By leveraging day-and-date, we can spend more on P&A (prints and advertising), which should also help."
Soderbergh's first announced project is "Bubble," a murder mystery set in a small Ohio town and cast with nonactors. If the six films Soderbergh creates for 2929 all resemble that model, they might well receive little distribution beyond Landmark's art houses. At least on paper, "Bubble" sounds like an experiment in the vein of the director's R-rated 2002 release "Full Frontal." Even though that film had the benefit of such stars as Julia Roberts, Top of Form 1
Bottom of Form 1
and Blair Underwood, it grossed just $2.5 million after bowing on 209 screens.
"It's really a break for all of us that these films are being released by 2929 and not a Warner Bros., which has to make Soderbergh happy because they have the next 'Ocean's Eleven,"' said one exhibitor at a leading chain who asked not to be named.
Theater owners, of course, have a vested interest in the current distribution model; in many cases they have signed 20-year leases, taken in cash infusions from enthusiastic investors and turned their popcorn-selling, seat-filling operations into profitable businesses.
But even though 2929's proposal threatens to upend a system that guarantees theaters to be the exclusive venue for new film titles, the vision of the future also has a certain logic of its own.
The company first tried its hand at the model, albeit in a more limited fashion, last month with the release of the Magnolia Film documentary "Enron: The Smartest Guys in the Room." Produced by HDNet, 2929's low-budget film production arm, and distributed by Magnolia Pictures, the Alex Gibney-driected film opened in Landmark Theatres and had an exclusive day-and-date release on the HDNet channel on DirecTV. "Enron" has earned $2 million theatrically since its April 22 bow, a respectable gross for a limited-release documentary.
Cuban said HDNet subscriber additions won't be available until next month, but the executive said the response to "Enron" has been great. "From subs, from people who told us they just subscribed, and the continued box office success of the movie will only continue to benefit us," he said in an e-mail.
And while the film originally opened in three Landmark Theatres, it has since expanded to other circuits, including Los Angeles-based Laemmle Theatres.
"We felt that HDNet didn't have a significant market penetration," Laemmle Theatres president Greg Laemmle said. "It wasn't like going day-and-date with cable or DVD, and therefore we felt the box office wouldn't be negatively impacted."
While Laemmle was willing to experiment with a film simultaneously bowing with a day-and-date premiere on HDNet, he won't go down the path of exhibiting titles that also are available on home video.
"It's a whole different ball of wax," Laemmle said. "A lot of people have DVD players, and a lot of people who see art films have DVD players. I have no interest in encouraging that sort of thing. That said, if someone shows it can work, I don't own that decision, and we'll choose to re-evaluate as the situation demands."
Other theater chains might be forced to re-evalute the situation as well.
At the Milken Institute's Global Conference in Beverly Hills last month, studio heads admitted that the cost of piracy is forcing them to rethink the time between a theatrical release and its home video availability. Barry Meyer, chairman and CEO of Warner Bros., predicted that in the future "your premiere will be in Wal-Mart."
While many studios are paying lip service to the exhibitors, agreeing with them on the dangers of collapsing traditional windows, some of them actually are looking forward to 2929's test of its strategy.
"It's going to be an interesting test," said one distributor who declined to be named. "On the issue of piracy, it would certainly help eliminate some of the concern about the amount of money we spend trying to protect against piracy. Marketing costs are another thing no one has been able to control. If we go video, theatrical and pay-per-view all at once with a well-known title, you could bring in $100 million in one night, similar to a (pay-per-view) fight."
One argument for 2929's approach is that it will reduce overall marketing costs, since all markets could be reached at once. However that scenario plays out, one marketing exec said that the challenge to bring consumers to the theater only will grow.
"The challenge will be to get these people to pony up the money to go to the theater when it's available everywhere else," said one studio marketing president who declined to be named. "We always hear from focus groups whether (they deem a movie) a rental or something they want to see in the theater. For most people it's a real financial decision, and there has to be a reason they need to see it in that environment. Releasing simultaneously on different platforms takes away a lot of that reason."
Reuters/Hollywood Reporter
This is a scary quote:
Barry Meyer, chairman and CEO of Warner Bros., predicted that in the future "your premiere will be in Wal-Mart."