Filmmakers Take Issue with Premium VOD Service

LOS ANGELES: More than 20 Hollywood filmmakers, including James Cameron and Michael Bay, have issued an open letter criticizing plans by studios and platforms to launch premium VOD services delivering feature films to the home some 60 days after the theatrical release.

The letter comes ahead of the Thursday launch by DIRECTV of the pay-TV debut of the Sony Pictures romantic comedy Just Go With It, starring Adam Sandler and Jennifer Aniston. DIRECTV’s on-demand platform is making the film available to subscribers for $29.99 for a 48-hour window. It was released theatrically on February 11. The other features that will roll out on the DIRECTV premium VOD service include Warner Bros.’ Hall Pass, Universal Pictures’ The Adjustment Bureau and Fox Searchlight’s Cedar Rapids.

The open letter, released by the National Association of Theater Owners (NATO), notes that early-to-the-home premium VOD means that "new movies can be shown in homes while these same films are still in their theatrical run."

The letter continues, "Currently, the average theatrical release window is over four months (132 days). 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. As a crucial part of a business that 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."

The letter goes on to note that "Low‐cost rentals and subscriptions are undermining higher priced DVD sales and rentals. But the problem of declining revenue in home video will not be solved by importing into the theatrical window a distribution model that cannibalizes theatrical ticket sales.

"Make no mistake: History has shown that 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 a few years. If wiser 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 the risks that can be taken with lower budget films may never have the chance to blossom under this cut‐throat new model. Further, releasing a pristine, digital copy of new movies early to the home will only increase the piracy problem—not solve it."

The signatories—among them Michael Bay, Kathryn Bigelow, James Cameron, Guillermo del Toro, Antoine Fuqua, Gale Anne Hurd, Peter Jackson, Michael Mann, Bill Mechanic, Brett Ratner, Gore Verbinski and Robert Zemeckis—want "a seat at the table. We want to hear the studios’ plans for how this new distribution model will affect the future of the industry that we love."

In a separate release from NATO, Cameron said, "You can argue about VOD windows all day long, but what you can’t deny is that
there is an overwhelming outcry from the theater owners that they feel threatened by this. The cinema experience is the wellspring of our entire business, regardless of what platforms we trickle down to. If the exhibitors are worried, I’m worried. We should be listening to them. Why on earth would you give audiences an incentive to skip the highest and best form of your film? My films aren’t going to the home early, but many will, and that will weaken the movie theater industry—and then my movies are threatened."

John Fithian, president and CEO of NATO, added, “The directors and producers we’ve talked to are passionate filmmakers and very informed business people who care deeply about their art and craft. Whether they are the makers of blockbusters or independent films, Oscar winners or just starting their careers, all have expressed extreme concern over announced plans to shorten the distribution window, and stated their desire that films can be seen in the venues they were made to be seen in: movie theaters.”