More On Folding Windows
Patrick Goldstein offers a significantly less understanding and more short-sighted view of collapsing windows than EJE.
However, it is instructive about the mania that continues to bubble up in the desperate executive offices of studios.
So even though everyone in the world knew it was coming out 12 or so weeks later on DVD, they went to the theater anyway. As one studio chief said to me the other day, barely suppressing a chortle: “Case closed.”
Whichever studio chief that was… you are a fool.
Only a fool takes a single example as the definer of an entire paradigm shift.
No one has every felt that you couldn’t do massive one-day numbers by opening Harry Potter or a Johnny Depp/Tim Burton family movie that obviously had a massive must-see. That is not a good argument for shortening windows.
For one thing, we all know that the actual window for the majority of box office in the vast majority of wide releases is under 10 weeks. The 12 week thing was never an infringement on that, as such. If you opened Harry Potter day-n-date, you would likely do over $70 million at the theatrical box office, do as much as $200m in PPV/VOD, and sell at least 7 million units of the DVD, generation over $100 million in sales revenues there. That’s a $370m opening weekend. Wow.
But what about Clash of the Titans? What about Sex & The City 2? What about MacGruber? What about Cats & Dogs: Revenge of Kitty Galore?
The whole thing is predicated on two assumptions… that they will get audiences to spend more on a title by making it available across platforms more quickly or same day… and that people will pay a significant premium for the privilege of immediate access.
Patrick coughs up this furball… a decade old notion, repeatedly proven not to be something PPV buyers will bite on… when he writes, “If you have a film like “Shutter Island,” “Cop Out” or “The Bounty Hunter,” that could just as easily be enjoyed at home as in the theaters, why not charge fans a premium–say $22.95–to see it at home on VOD at the same time as it plays in the theaters?”
Because they won’t pay it.
And if they don’t pay it, the movie is losing money.
(And by the way… Shutter Island on your TV at home? Really? Do you just hate movies, Patrick? I never thought so.)
Patrick is a smart guy, but on this issue, he has long had a massive blind spot… he thinks HE is the audience for widely released movies. He is not. Nor am I.
He writes, If you let your business model lag too far behind the habits of your most loyal consumers, you’ll soon discover that you don’t have a business anymore.
Well, first… no industry has made progress by letting the consumer set the structure for them. But putting that aside, the record industry and the film industry are NOT the same. A digital music file can play on the world’s most expensive sound system or a $10 mp3 player that holds 500mg of music… and 90% of the listeners would not notice too much of a difference either way.
There is an audience for rough hewn delivery of movies. They are, in almost all cases, either motivated by the excitement of possessing what they are not meant to possess OR they are price motivated, as in they don’t have the money to pay to go to the movie theater or to buy a retail DVD.
What really killed the record industry was pricing. They were greedy. And technology showed up and bit them on the ass… not only technology, but big companies that were allowed to freely engage in the sponsorship of piracy for years.
It is, absolutely, easy to find movies online, illegally, right now. Wires may get faster, but the speed of download is not what is holding back the mainstreaming of piracy in America. In the end, the system is in place and people – for the most part – are willing to pay a reasonable price.
But the biggest signal is, so ironically, the very argument at the center of Patrick’s argument… people went to go see Alice… and Avatar… and The Blind Side… and Shutter Island… in large numbers. Over 15 million people paid retail, in each case, to see this films in a format they could only experience once. No stopping the DVD for a pee break. No going back to figure out what happened in that scene in the cave.
THAT is the habit of the industry’s most loyal customers… the frequent moviegoers. The next most loyal customers are the frequent DVD buyers. And after that, the frequent renters. And after that, the buyers of all the pay channels. And after that, the selective pay channel buyers. And after that, the PPV and VOD buyers. And after that, the spenders of the teensy, tiny longtail dollars that reflect what the value of 90% of studio releases after 18 months or so.
The bet that Disney and Patrick seem to want the entire industry to make is that the least valuable part of the revenue stream will, because it technically can, become the biggest.
I think they are nuts.
And as I wrote in the last piece, I think Iger has more in mind… which is a complete disinterest in the quality of movies… searching for a way to make Disney invulnerable to financial trends and to failed films.
Much as I say that I don’t think one example should serve as a template, you don’t have to go too much farther than the Oscars to see how much unpredictability is critical to quality. Hurt Locker was a movie that almost no one wanted to fund, make, or distribute. It did very little business, but won Best Picture. Slumdog Millionaire was a movie that almost no one wanted to fund, make, or distribute. It did a big honkin’ load of business and won Best Picture.
Warner Bros, nor any other studio, would fund The Blind Side. It took Peter Jackson and a relatively sparse budget to get District 9 made.
Disney fired the guys who brought us Burton’s Alice in Wonderland and The Proposal, but are still happily in business with the guy who made G-Force and Confessions of a Shopaholic. How they butter their bread is a little more complex than giving 40somethings immediate access to DVDs or PPVs of every film that hits theaters.
Shortening windows in no way addresses what “broke” in the film industry in the last couple of years. In fact, it is kind of the opposite. The big dip of significance is in DVD sell-thru. The reaction is to emphasize DVD sell-thru and other Home Ent platforms. The cover, for the all-to-eager press, is the technology.
Imagine if the record industry, with all the problems they encountered with CD sales, but with continuing success in the concert business, generating many times the gross revenues of CD sales, said, “Hey… CD sales are down… let’s force bands to only do 12 weeks of concerts a year because that will force more people to buy CDs of their music… and it’s less expensive… and easier to market. We don’t need that concert money in the pool.”
Now, I know this is a bit silly, since for the most part, records promote concerts and not the other way around. But I think some of you will see my point.
Shortening windows for studio movies is not a serious approach to a positive future for the film business.
And in the indie world… well, completely different, since the size of the audience and the availability of the films is a near 180 degree different proposition.
One of the very unique propositions of the film business is the lack of price competition. It’s quite brilliant, in terms of building an industry. Pricing increases are incremental. Every piece of product costs the same. Potential ticket buyers know the fundamentals and make choices of taste (often tricked by marketers).
In recent years, the post-theatrical availability of movies has evolved, in no small part because of pricing considerations. The choice to make DVD a sell-thru-first business and not primarily a rental play, like VHS, was massively successful… in no small part because it was cheap. From $25 to $19.95, the average cost per unit dropped and felt comfortable. Then NetFlix revolutionized the rental business and made it so cheap and easy that buying DVDs seemed silly for many. DVD sell-thru dropped more. Library titles started going out for under $10 per film… sometimes under $5 a film. All of a sudden, even $14.95 for a brand new DVD title seemed like a lot of money when you could have as many movies as your queue could hold for $20 a month or less.
The structure of having a variety of options for Home Ent devolved in the mud of a price battle.
So what do the window breakers want? They want to increase the cost of the theatrical experience with 3D to $15 per person or more in major markets. And they’d like to offer you ownership of a DVD that you can show as many people as you like… for the same $15. It might be $22 on Blu-ray.
There is no real indication that more people would by the DVD day-date. There is no real indication that people will pay premium prices day-n-date… not even $15.
So, you can choose to see the movie on opening night for $5 at home… or you can pay $15 per person to go to a movie theater. The film industry competing against itself on pricing. Brilliant.
After all, it’s working so well for DVD…
“So even though everyone in the world knew it was coming out 12 or so weeks later on DVD”
Herein lies the basic problem of entertainment reporting. Most entertainment writers assume that, because they know something, everyone in the world must have known about it too. I’ll bet you that the vast majority of the world’s population had no clue when Alice was going out on DVD. We, those of us who visits sites like this and HE and DHD knew it, because we care about the entertainment industry, but I’ll bet you bottom dollar that my father, my mother, my wife, my brother, my sister-in-law and pretty much everyone else in my family had no fucking clue. Why? Because they aren’t junkies for this shit like I am.
My point.
It was irrelevant in this situation.
But if standardized, your father, mother, wife, brother, sister-in-law and pretty much everyone else in your family will know. An behavior will shift.
You’re absolutely right, Poland. It’s like we’re living in some kind of bizarro-world with these media companies. DVD sell through business tanking? Promote the guy in charge of the division to take over all distribution channels. Theatrical revenue growing? Reduce the number of films you’re releasing in theaters.
I just don’t get it.
I’ve never understood the “only movies with expensive CGI need to be seen in a theater” argument.
I happily paid $10 to see Bong Joon-Ho’s Mother last night. The sheer pleasure of watching a film by a director who knows where to put the damn camera (as opposed to, say, Andy Tennant) is always amplified in a theater.
I love movies and I can’t imagine any movie released in the history of cinema that I would pay $22.95 to watch in the comfort of my own home on opening day that I could’ve watched in the theather on the same day for $7.50. And I’m talking about my favorite movies of all time. Let alone movies like Shutter Island and Cop Out.
CGI will only be included in films one way or another more as we move into the future. I dont mind watching a plain simple film, but the fact cant be denied cgi is always in there. If it is used correctly then great, but in the case of avatar it gives me a bloomin headace!
“I’ll bet you bottom dollar that my father, my mother, my wife, my brother, my sister-in-law and pretty much everyone else in my family had no fucking clue.”
Actually, I’ll take that bet, but with a caveat. They probably don’t know the street date, but they do know that in few months it will be on DVD. Repeatedly these days I hear someone assuming that if they just wait 3 – 4 months they can rent it.
Someone should really sit each exec down and ask them if they understand the concept behind The Goose That Laid the Golden Eggs. Collapsing the window is going to be the biggest crises they’ve had since television.
Sure, in the beginning there will be a few mega blockbusters (Poland’s one miscalculation is that they will continue to charge just $5 for PPV for day and date, when that is likely to at least triple). But many films that will need time to build word of mouth and awareness without massive marketing will simply disappear, each one chewing up more of the mega-hits’ profits. The studios will react by making even fewer risky moderately priced films and betting even heavier on the tent poles.
Until a few of those tent poles tank so badly they have studios running yearly deficits. Wonder how long the corporate owners will let that continue? For GE and Sony, film is such a small piece of their empires.
Is it just me or did the studios watch the mistakes the music industry made with CDs and boast “Hey, we can fuck up worse than that just give us the chance?”
I agree with Edward and Poland on this. Using ALICE (The first and single example) is really poor analysis (anyone who has taken a stats class would know this). Also, middle America doesn’t know the difference between 12 or 16 weeks on a single example. However, conditioning an audience to expect DVD in 12 weeks for every single movie is where the damage would really show itself.
chadillac’s last sentence sums it all up. That’s where the real damage is done.
But moviemaking is a notoriously fickle business. It only takes one conspicuous failure to turn the ship around. Thanks to Avatar, 3D is the savior of the industry…until one high profile bomb comes out and sucks the wind out of the sails.
We see this on a smaller scale all the time. Cutthroat Island put pirates on the shelf for eight years. Then Pirates of the Caribbean suddenly made them okay. It was never about pirates, of course: it was about the specific movies they were in. But the industry would prefer to believe that box office receipts are all about changing public tastes, which can be quantified and predicted, rather than something more elusive. Unpredictability is anathema to business forecasts. It cannot be tolerated. Thus, a single unexpected outcome at the box office is suddenly imbued with meaning that simply doesn’t exist.
For now, Alice In Wonderland means that small windows are good — even if nobody who went to see the movie was aware that the DVD would arrive four weeks sooner.
The next short-window experiment could accidentally reinforce the idea, or it might turn things around entirely. The danger to the industry isn’t so much that they’re chasing short windows now — it’ll always be trying weird experiments, good and bad, based on some box office outlier or other — but that the next few movies with short windows might also happen to be successful. This would embolden studios to continue down the path, but there is only so far you can go before the public becomes conditioned, and you can’t go back.
Deathtongue: Actually, I am not so sure my parents or my brother and his wife would even know how long it takes a movie to go from theatre to home video. Only that, eventually, movies come out on video. My wife might notice, but only because she lives with me and hears about stuff like this through me.