With major studios risking exhibitor revolt over earlier and earlier video-on-demand releases, it seems the smaller players have found a way to keep everyone happy: Release movies on VOD "semi-early," taking care to honor the 90 day theatrical window that exhibitors desire.
Summit followed a similar strategy with the early VOD release of "Source Code" earlier this summer.
By timing "Abduction's" Dec. 23 VOD debut to the Christmas holidays and making the film available for just 10 days, the studio believes that it can exploit the number of teens out of school on holiday break.
It will also allow the company to make money off the PG-13 thriller, which opens in theaters on Sept. 23, without pushing it into a crowded Christmas disc market, where family titles and summer blockbusters tend to dominate disc sales. The studio believes that the short 10-day VOD window will not significantly cut into disc sales, given Lautner’s star appeal.
The plan come with theater owner's stamp of approval.
“On VOD experiments, we’ve consistently asked for two things: that theater owners be consulted and that any release to the home should respect the range of the existing release window,” John Fithian, National Assn. of Theater Owners president and CEO, told TheWrap. “Lionsgate did both those things and did it right.”
Theater owners hope that Lionsgate's efforts to keep the lines of communication open will inspire other studios.
"What a refreshing approach,” Gerry Lopez, AMC Theatres CEO and president, told TheWrap. “How they handled ‘Abduction’ sets the bar for others to follow. We're happy to be included in the dialogue and look forward to the movie's release."
That’s a markedly different response from the fury that greeted last spring’s announcement that four major studios would debut over a dozen films -- a mere two months after they hit theaters -- on DirecTV.
At the time, exhibitors and NATO cried foul, claiming that early VOD debuts of movies like “Just Go With It” and “Unknown” would cannibalize ticket sales.
No such complaints have greeted Lionsgate's plan. "Abduction" will become available on demand some 91 days after it premieres in theaters. And at $6.99, though higher than regular VOD, the cost to consumers is a lot cheaper than the $30 studios charge for the DirecTV effort.
“Rather than violate the 90-day period exhibitors have requested, we thought we’d find a film for which it would work to release it on VOD relatively early, at more like the 90-day mark,” Steve Beeks, Lionsgate’s president and co-chief operating officer, told TheWrap.
Exhibitors may love Summit and Lionsgate's approach, but rival studios say that teasing a film on VOD before discs hit stores can cut into DVD rentals and sales.
Just as theater chains have fought to preserve the theatrical release window, studios have worked doggedly to expand the sales window for DVDs and Blu-rays. Many of the major players have signed pacts with Netflix and Redbox that prevent them from renting new releases until 30 days after they hit store shelves.
Lionsgate executives believe that they may have found the ideal film and home video release date to try out the new model.
"We picked a title that we thought would do well on both rental and sell-through," Beeks said. "As a result, we won’t be hurting sell-through by making it available earlier. Right now, there are titles that might be viewed as good in sell-through, but not in rental, but this is good in both."
But even Lionsgate acknowledges that “Abduction” is an experiment, not a road map.
“This was opportunistic,” Beeks said. “We’re not sure this is the permanent model, but it’s a model that should work at a particular time.”
Though the Lionsgate negotiations ended happily for theater owners, exhibitors can expect more pushback on the 90-day release window.
“I’m not sure that this is the best way to optimize the home-entertainment release pattern," a studio executive told TheWrap. "It doesn’t address the piracy gap or that the box office is lying fallow from day 60 to 90.”
Many of the same exhibitors that are hailing Lionsgate’s plan are privately gleeful that the DirecTV premium VOD experiment hasn't exactly been a hit with consumers. They tout those soft numbers as evidence that pushing VOD debuts earlier and earlier and asking for more and more money for the films doesn’t work.
Studios counter that there's not enough evidence to call early VOD a failure.
“Buys were slight, but the reach was slight," an executive at a different studio told TheWrap. "It was not a full distribution footprint.”
With disc sales sliding, and the crucial fourth-quarter holiday gift buying season approaching, studios clearly could use a few more VOD miracles.