Past experiments with early VOD releases have infuriated theater chains, but this one hinges on exhibitor support
Ever since the bottom fell out on the DVD market roughly a half-decade ago, studios have been scrambling to find a way to plug the hole in their balance sheets.
Their efforts to gin up new sources of home entertainment revenues by experimenting with offering films on video-on-demand before their theatrical runs are over have frequently put them at odds with exhibitors.
But recent ticketing experiments tied to "Pacific Rim" and "World War Z" show there may be a new way forward — one that arrives without the sniping and threats that characterized recent efforts to revitalize movie sales.
Canadian theater chain Cineplex Entertainment and Warner Bros. are teaming up on the "Pacific Rim" "SuperTicket" giving purchasers an UltraViolet copy of the film for an additional $19.99 to $24.99 on top of the movie ticket price. The digital copy comes equipped with bonus scenes and special features about the making of the Guillermo del Toro monsters versus robots film.
The initiative, similar to the $50 MegaTicket Paramount tested with "World War Z" last month, doesn't carry the same theatrical baggage as Universal's aborted premium VOD test with "Tower Heist," which the studios abandoned after exhibitors cried fowl.
Indeed, Cineplex is hailing the test as an example of what can happen when distributors and exhibitors work in harmony.
"We pride ourselves on having a good relationships with the studios and this was something we conceived of and planned with them," Mike Langdon, director of communications at Cineplex. "This is a great example of the kind of innovative offering we like to provide for our customers and one that is mutually beneficial."
Likewise, UltraViolet's backers see it as a way to raise the profile of the cloud-based platform as it continues to get customers acclimated to the concept of buying digital copies of movies.
"We develop and produce movies for big screen and we want to keep it that way," Mitch Singer, president of DECE, the studio consortium behind UltraViolet, and chief digital strategy officer of Sony Pictures, said. "Those consumers love seeing films in theaters, but they like to buy copies as well. What we're doing with Cineplex shows how the content industry can work with exhibitors in ways that are collaborative. It's a more productive way to go."
Langdon said Cineplex is planning similar SuperTickets for films from Universal, Sony and Paramount. He declined, however, to provide any details about how many patrons have opted for a digital download to go with the price of admission to "Pacific Rim," opening in theaters Thursday evening.
Paramount teamed with Regal Cinemas on the MegaTicket, which included an advance screening of "World War Z," along with various goodies such as a high definition version of the film when it hits stores, 3D glasses and a small popcorn for $50.
The trial was limited to five theaters in cities like Atlanta and San Diego, but Regal said the results exceeded projections, even as it acknowledged that the concept still needs work. Like Cineplex, it declined to divulge how many MegaTickets it sold.
"We were pleased," Ken Thewes, Regal Entertainment's chief marketing officer, said. "It's a niche offering, but some customers appreciated the convenience. There's still stuff to work on to find out what's the ideal price point and to make it so there's a clearer value proposition."
Thewes said the company is talking to other studios about similar experiments, though it has no immediate plans for a follow-up.
Although major filmmakers such as George Lucas have expressed alarm about the rising cost of tickets, forecasting a time when going to the movies will cost $150, analysts praise the test. Their major gripe is that it does not go far enough.
"Why not allow them to get the digital copy that night?" Tom Adams, an analyst at IHS Screen Digest, asked. "It seems like the logical next step. Theater owners aren't losing money and I don't see why they'd have an objection to them having it that early."
Studios aren't ready to go that far, but Singer acknowledges that it would be easy to give SuperTicket or MegaTicket buyers access to movies prior to their home entertainment debut. After all, companies are already offering early digital versions of films two or three weeks prior to their debut on DVD or Blu-ray.
"That is something we would explore with the various theater chains," Singer said. "I don't think it's too early to rule anything out. It's not inconceivable to to think that when you buy a SuperTicket you could get access to a movie before the general public, though that's not something we're planning to do here."
For now, exhibitors seem cool to the idea of allowing instant access to a movie that is still playing in theaters — unless there is a way to make certain that only moviegoers who purchase a ticket to the film get to watch it digitally.
Two years ago, theater owners objected threatened to boycott "Tower Heist" over the proposed premium VOD release three weeks after it arrived in theaters, causing Universal to abort the test. The experience made studios understandably leery about risking the ire of theater owners on major releases.
"If you could guarantee that only people who saw the movie in theaters got access, that would be something we would talk about, but the concern would be about how do you control something like that," Regal's Thewes said.
He argues that the Mega Ticket and SuperTicket experiments actually demonstrate that studios can use theaters as home entertainment retailers and don't need to shorten the typical 90 day window between when a movie debuts on screen and when it hits store shelves.
"We clearly are not advocating shortening the window," Thewes added. "If anything, we'd like to see it get longer and we want to incentivize studios to make sure it stays at 90, even 120 days."
For the record: An earlier version of this article incorrectly stated that Mitch Singer was CTO of Sony Pictures.