Paramount, AMC and Cineplex set a new precedent

In Focus

For decades, one of the most contentious issues dividing motion picture studios and theatrical exhibitors has been the window between a film’s debut in cinemas and its availability in ancillary markets like home video and, more recently, streaming outlets. Though that window has shortened somewhat over the years, it’s held fairly steady at roughly three months.

On July 8, the ground rules suddenly changed. In a surprise announcement, two of the leading North American circuits, AMC Theatres and Cineplex Entertainment, disclosed that they have reached an agreement with Paramount Pictures to dramatically shorten the window for two of Paramount’s upcoming releases, Paranormal Activity: The Ghost Dimension (opening Oct. 23) and Scout’s Guide to the Zombie Apocalypse (debuting Oct. 30). These two titles will be available digitally just 17 days after each film’s screen count drops below 300 screens; Paramount estimates that will happen four to six weeks after the theatrical premiere. In exchange for this concession, the studio is offering exhibitors a percentage of digital revenue earned within the first 90 days after the film debuts.

"Exhibition for the first time was open-minded about evolving our business instead of sticking their heads in the sand and ignoring what is happening around us," Paramount vice chair Rob Moore told The Hollywood Reporter. "This is all about changing the definition of theatrical windows. Instead of starting the countdown from when a movie opens, we are starting from when it ends."

AMC CEO and president Gerry Lopez confirmed his willingness to cooperate with the studio on this issue. “Consumers know theatrical movies from their 'gotta see it now' exclusive releases in theatres,” he stated, “but every movie is different, and a one-size-fits-all business model has never made sense. This model aligns the interests of consumers, filmmakers and exhibitors to maximize the theatrical experience first and then enable legitimate digital access."

Most crucially, the National Association of Theatre Owners was conciliatory rather than confrontational. "For several years, we've been asking studios to work with exhibitors on new models that can grow the pie for everyone while protecting the exclusive theatrical window,” noted NATO VP Patrick Corcoran.“So we are pleased that Paramount spoke with exhibitors first. As far as whether this experiment will work is up for other theatre companies to decide.”

As of press time, other major theatre circuits like Regal and Cinemark had not weighed in on this momentous agreement. Sensibly, Paramount’s Moore emphasized that the formula wouldn’t apply to big tentpole films like the studio’s July 31 release, Mission: Impossible—Rogue Nation.

The upside of this announcement is the fact that Paramount reached out to two leading circuits, as contrasted with the attempted (and failed) end run around exhibition that sparked so much blowback in 2011 when Universal quietly pacted with DirecTV for an early premium VOD release of the movie Tower Heist. And Paramount’s offer to exhibitors of a share of the digital pie is certainly a friendly gesture.

Still, exhibition has reason to be wary. Yes, studio conglomerates have been frustrated by NATO’s firm stance on windows and its impact on their goal to earn as much money from their properties from as many outlets as possible. But this new deal sets a precedent the cinema industry will need to monitor closely. There’s a reason for windows: Exhibitors have invested millions in upgrading their auditoriums to make the theatrical experience as special and inviting as possible, and a successful launch in cinemas is still the main driver behind all that later ancillary revenue. Many films do have a short life in cinemas, and it makes sense to accelerate their digital availability while they’re still fresh in the minds of consumers. But all parties need to agree that applying this formula to higher-profile movies doesn’t make sense—either for the exhibitor or for the studio whose investment has been burnished by today’s deluxe theatrical presentations. We’ll be watching as this story unfolds.

Getting in the Game

On July 21 and 30, Fathom Events and BY Experience will be presenting in cinemas All Work All Play: The Pursuit of eSports Glory, a documentary about the growing subculture of fans who fill arenas to watch videogame tournaments. The film will be followed by live gaming with top players, guest appearances, and a Q&A in front of a live studio audience.

At this year’s South by Southwest conference, Audience Entertainment and Rare Games Ltd. demonstrated Banjo-Kazooie gaming, in which the audience was able to collectively control the content on the screen through motion and sound. As Audience Entertainment chief marketing officer Adam Cassels described the scene in our July issue, “The audience was blown away, yelling and urging the presenters to let them play again. (They played three times!)It’s easy to extrapolate from this success story how a similar game or experience might work its way into a movie pre-show, or even an animated children’s film.”

As alternative content (aka event cinema) gains a stronger foothold in cinemas, these two events would seem to augur a major potential revenue source for theatres in their down times. As anyone with a child or teenager can attest, videogames are one of the most compelling pastimes for today’s young generation—indeed, they’ve created stiff competition for the blockbuster movies that open each week. And believe it or not, young people get a thrill out of watching other young people play videogames in arena settings.

So why shouldn’t movie theatres get in on the action? With the new interactive technologies coming to the pre-show from companies like Audience Entertainment and TimePlay, the promise is there for a unique and enticing in-theatre gaming experience that just might make the local movie theatre a cooler place for that young demographic to gather and hang out, even when there’s no Jurassic World or Avengers onscreen. Game on, exhibitors!