The drama of the shrinking theatrical window

By Sarah Sluis

Going to the movies can be expensive. Last week, tickets to 3D IMAX Shrek Forever After in New York City hit the twenty-dollar mark, only to be reduced once news outlets got wind of the story (at least that's my take on what happened; the theatre claims it was an error). With movie tickets becoming so expensive, it's no wonder people would turn to rentals to see at least some movies--but that field is getting more expensive as well.

Today, Variety dubbed 2010 the year of the window. New mediums of delivering movies to viewers, like the Internet and on-demand, are becoming more popular and more available.

First, there are the changes that make sense: I think there is a compelling argument for shepherding box-office bombs like MacGruber to

DVD as quickly as possible, so that audiences will still remember the

marketing of a film enough to rent it. Bad movies have arrived in

video stores sooner than good ones for as long as I can remember, and a

further shortening of the window shouldn't be a problem.

Second, there are the changes that seem like fleecing the customers. I'm skeptical of charging exorbitant fees to see movies at home while they are in theatres. Time Warner, in particular, wants to be able to put movies on-demand thirty days after they release for $20, though some think the number will approach $30-50. For $50, you could take four to six people to the movies, depending on your location, so it's hard to imagine who the intended audience for this could be. My first thought is the cast of "Jon & Kate Plus 8," and my second is those people on the show

"Cribs" that have home theatres. I think it will be very, very

difficult for average households to get over the sticker shock of

paying that much for a movie when they can rent a slightly older one

for $1 at their local RedBox. However, studios have already taken steps like delaying the Netflix release of a movie one month beyond its on-sale date. A bifurcation of the rental release date could make the on-demand experience more valuable. If you wanted to see it at home, you'd have to wait much longer.

One part of the equation that is interesting is the idea of a business' "comfort" with a new idea. Variety explored that notion in a recent article about World Wrestling Entertainment. The pay-per-view provider has recently branched out into feature films starring WWE standouts, and plans to release the movies on DVD shortly after they open in theatres. Perhaps WWE's experience in the pay-per-view and alternative content markets has made it more eager to see theatrical distribution as a way to boost DVD sales, instead of a revenue stream in of itself.

As a counterpoint to that argument, there's still the model of indie, platform release, which is considered incompatible with compressed DVD releases. If a movie needs time to build theatrically, putting it out on DVD may not help. A recent panel at a film financing forum, for example, highlighed the opposite of a "MacGruber" situation: a movie that's doing so well at the box office DVD release can be pushed back.

So few Americans are regular moviegoers (they say that 80% of the tickets come from 20% of the people) that exploring new ways of home distribution makes sense--except for the $50-per-movie fee to see it at home when the theatre is clearly better.

Studios rattle the DVD windows

By Sarah Sluis

How long should a movie be out of the picture between its theatrical run and its DVD debut?

When I was growing up, that time period between theatrical release and home video release could be agonizing. Some movies were "must-sees" in theatres, and others I could wait to rent at the video store, but a lot of them fell in between. I frequently missed seeing a movie in a theatre, because there were simply too many other good films out or I didn't have enough time (I also had a thing against seeing a movie once it had been out for months--you might as well just wait to see it at home).

Now, this same theatrical window that vexed me as a child is causing exhibitors and studios to draw their swords once again. While exhibitors want to maintain a long window to preserve the

sacredness of theatrical release, studios want to make money on the

pent-up demand caused by a film going dark--being unavailable in

theatres or on DVD--for a few months. A month ago, Sony's decision to make the film Cloudy with a Chance of Meatballs available earlier for those that bought a special Sony television led exhibitors to pull the film from their theatres. Even as studios are trying to release films on DVD earlier, they're also fighting RedBox, which rents new releases for $1. They're in the odd position of trying to break new ground in one area and preserve the status quo in another.

Most of the studios' home-grown proposals for shorter windows involve charging a premium for the privilege of seeing a movie in this "in-between" time--up to $50 for in-home viewing. I don't buy that this will work. I personally would never see a film for such a high price tag, not even if I were one of the targeted demographics, living in a "geographically isolated" area with an expansive brethren and laid out with a bad back. The stereotype in my head of the perfect family for this proposal, The Duggar Family of TLC's "18 Kids and Counting", would never spring for a $50 rental, even though it would cost them $200 to go to a movie theatre. This is the same family that has a recipe for discount laundry detergent on their website. I think theatres are overestimating the value of their product, especially in a market saturated with media choices (why not just surf Hulu for free?). Plus, going to a theatre has a unique value of its own: there are fewer distractions, a bigger image, and the enjoyment of seeing a picture with an audience, to name a few reasons. While seeing a film at home shortly after its theatrical release may present a value for large groups, the only thing justifying the price point is being able to see a movie in sync with its water cooler hype. You still miss out on the fun of going out to the movies.

The fight on both ends is far from over. Just today, the Los Angeles County Economic Development Corp., which receives donations from film studios, released a study that was proposed by an "unnamed" guild, saying that cheap DVD rentals will cost the region thousands of jobs. While the special interests close to the study make its findings suspect, it shows how seriously film studios are taking this threat, and the lengths that they will go to fight it.

Female stars with the top returns, and a look at the 85% rule

By Sarah Sluis

Today Forbes compiled a list of female stars that give the most return on their salary. They divided the total gross of the film, including DVD and television, by the star's salary to get their number. The formula has its flaws, namely that a supporting part in a big-name movie can put you near the top of the list. They also only looked at the star's past three films, though arguably, that kind of short-term outlook is what flies in Hollywood.

The top ten actresses were Naomi Watts, Jennifer Connelly, Rachel McAdams, Natalie Portman, Meryl Streep, Jennifer Aniston, Halle Berry, Cate Blanchett, Anne Hathaway and Hilary Swank. At the top of the list, each dollar Watts earned brought in $44 at the box office. For the bottom three, each dollar brought in $23 at the box office. In contrast to normal 'A' Lists, the group highlights some lesser-known stars by presenting the information through a different lens.

The unusual grouping also brings to mind the movie mindset that focuses on opening weekends instead of theatrical runs. A month ago, I noted that quiet film Julie & Julia was playing strongly week after week, which was expected given its audience demographics. While the industry standard works off a simple formula of exponential decay, meaning that they expect to earn half as much each week (adding up to 85% in the first three weeks), many movies defy that formula For example, since my post, the percentage of gross Julie & Julia earned from its first three weeks dipped from 73% to 64%--and it's racked up $91.9 million. It just kept on making close to the same amount of money, week after week. The news is good for theatre owners, too, since they earn a greater percentage on the film as weeks go by.

I took a look at some other films to see where they fell using the 85% rule (keep in mind some 2009 films are still playing, so the percentage may eventually lower a point or two). Turns out, the films I decided to check out first--films I simply remembered strongly--usually outperformed, earning 85% or less of their gross from the first three weeks. They have sticking power. It took random selections from Box Office Mojo to find a movie that actually went over the 85% rule: take the March release Street Fighter: Legend of Chun-Li (by now, a faint memory). It earned 91% of its gross from the first three weeks.

Most hits fell below or met the 85% rule. Sex and the City earned 78% of its gross in the first three weeks.Twilight, even though it dropped over 60% in its second week, went ten percent below the rule: 74%. Star Trek, with its strong word-of-mouth, brought in 71%. A youth-oriented hit like Transformers: Revenge of the Fallen also released on a Wednesday, boosting its front-end gross: 84.3%. A summer flop like Year One? Just barely over, at 88%.

When you look at platform releases, it's a whole different story. Slumdog Millionaire earned just 2.4% of its gross in the first three weeks, and the reigning champion in my mind is My Big Fat Greek Wedding, which earned 1% of its gross in the first week. It didn't even fulfill the rule of platform releases, which is a $15,000 or more gross per theatre. It earned just $5,000--a number it stuck to for most of its run.

While the 85% number is useful, especially for those frantically calculating potential gross after opening weekend, it's interesting to see the range of results--especially when tweaks of a few percent adds up to millions.