After Wednesday’s surprise agreement with the two largest exhibition chains to reduce the period of time that movies play exclusively in theaters, Paramount Pictures may have finally cracked the code on one of Hollywood’s most vexing challenges.
But by getting AMC Theatres and Cineplex Entertainment to allow Paramount to make two October releases — “Paranormal Activity: The Ghost Dimension” and “Scouts Guide to the Zombie Apocalypse” — available for home viewing just 17 days after they hit theaters, Paramount has shown that studios and theater chains may finally be ready to cooperate in dealing with one of Hollywood’s biggest problems.
Filmmakers, studios and exhibitors are facing a broad shift in behavior by consumers, especially the most-prized young adults, away from movie theaters and to digital platforms. This deal won’t resolve how to handle that change, but it could be an important first step.
“Windows,” as the periods of exclusive availability on a particular platform are known in the industry, have been a hot-button issue between studios and exhibitors for years.
Recent attempts by studios to break those windows — Sony with its hack-targeted comedy “The Interview” last year, the Weinstein Company with “One Chance” and Universal with “Tower Heist” in 2011 — have been stonewalled by theater chains wary of cutting the legs off their revenue stream.
Paramount’s experiment is one of the first times that the two sectors have worked together to keep the movie biz from going the way of the music industry, which was gutted when consumers cut record labels and distributors out of the deal as digital access exploded.
Patrick Corcoran, vice president of the National Association of Theatre Owners, applauded Paramount for reaching out. “For several years we’ve been asking the studios to work with theater owners on developing new models and ways to grow the whole pie and market in ways that don’t damage a film’s theatrical run,” he said.
“You have to applaud Paramount’s creativity,” entertainment and media valuation analyst Seth Willenson told TheWrap. “They had to find ways of mitigating rising marketing costs by maximizing returns on as many platforms as possible as quickly as possible, and they may have.”
Not everyone was patting Paramount on the back for peace-making efforts and thinking outside the box. One industry executive said it was more practical reality than historical shift.
“This is Paramount being opportunistic. They have a very thin release slate and this is a way for them to expedite cash flow, make a little money quickly and move on,” said the executive. “I don’t see it as precedent-setting. They’ll be sharing a little bit of the digital stream, but it’s a mainly a way to maximize returns on a couple of genre films.”
Indeed, the risk for Paramount is relatively low since “Paranormal” and “Scouts Guide” are low-budget films without big-name stars. As horror films, they also benefit from communal viewing — it’s fun to get scared witless with your pals — and target young, tech-savvy adults who are driving the theater-to-digital exodus.
Horror releases also tend to be very front-loaded in consumer interest and shelf life in theaters. These aren’t tentpole movies such as “Terminator: Genisys” or “Jurassic World,” which was taking in $40 million at the box office in its fourth week. As a result, any cut in box office grosses from the theatrical run of “Paranormal” or “Scouts Guide” should be minimal.
Theater owners and distributors typically split a film’s profits in half, at least domestically. But video on demand gives the studios between 60 percent and 80 percent of revenues. That market is facing a glut of low-end product of late, and the buzz generated by Paramount’s experiment will help distinguish the two titles.
The “Paranormal Activity” franchise is in decline, and the last entry, 2014’s “The Marked Ones,” was the lowest-grossing of all. It opened to $18.3 million in January’s first week, but by the third week — just after it would become available for VOD under the new plan — it took in just $1.4 million.
Paramount, AMC and Cineplex were all mum Wednesday on the financial details of the plan, but it’s clear the risk to all involved is slight, regardless of how much back-end returns may be shifted.
“We intend to make money on both of these movies,” Megan Colligan, Paramount’s president of marketing and distribution, told TheWrap. “It’s good deal for consumers who get more options, and for the studios and the theaters it reinforces the reality that the theatrical run is No. 1 in terms of giving a film value.”
There are a number of questions left open by the move. Is China’s Wanda Corp., the parent of AMC, using the deal to ingratiate itself with Hollywood studios? Will the studio and the chains go all out on their promotional, social media and marketing efforts to promote each other’s runs? And will consumers want to buy a movie ticket to a film they can see at home in less than three weeks?
42 Summer Movies on Our Radar: From 'Avengers,' 'Jurassic World' to 'Magic Mike XXL' (Photos)
"Avengers: Age of Ultron" - May 1 The elite superhero team -- including Scarlett Johansson, Robert Downey Jr., Chris Hemsworth and Chris Evans -- assembles again in this follow up to the 2012 blockbuster.
"Welcome to Me" - May 1 Kristen Wiig stars in this indie drama about a woman with borderline personality disorder who buys herself a cable access talk show after winning the lottery. Will Ferrell and Adam McKay produced.
"The D-Train" - May 8 Jack Black plays the head of his high school reunion committee who must convince the most popular guy in his class (James Marsden) to attend the reunion in this Sundance pic.
"Maggie" - May 8 Arnold Schwarzenegger stars in this indie as a father who stays with his daughter (Abigail Breslin) as she transforms into a zombie.
"Hot Pursuit" - May 8 Reese Witherspoon and Sofia Vergara star in this buddy comedy about a straight-laced cop (Witherspoon) tasked with escorting a witness (Vergara) to her trial
"The Connection" - May 15 Oscar-winner Jean Dujardin stars in this French crime thriller as a real-life policeman who dedicates his career to taking down a drug lord (Gilles Lellouche)
"Mad Max: Fury Road" - May 15 Tom Hardy takes over the role that made Mel Gibson an international star in this reboot from the madcap mind of George Miller
"Pitch Perfect 2" - May 15 Anna Kendrick returns for the song-filled sequel to the 2012 musical smash hit.
"Poltergeist" - May 22 Sam Rockwell leads a remake of the 1982 horror classic that was originally written by Steven Spielberg.
Twentieth Century Fox
"Tomorrowland" - May 22 George Clooney and Britt Robertson star in a sci-fi fantasy about a man and woman who must discover the secrets of a strange land lost in time and space.
"Aloha" - May 29 Cameron Crowe directs Bradley Cooper and Emma Stone in a romantic comedy about a military contractor overseeing a satellite launch in Hawaii.
Columbia Pictures/Twentieth Century Fox
"San Andreas" - May 29
Dwayne Johnson stars in a disaster movie about a chopper pilot who must rescue his daughter (Alexandra Daddario) after a massive earthquake strikes California.
"Entourage" - June 5 Vince (Adrian Grenier) drives Ari (Jeremy Piven) up the wall when he decides to direct and star in his own movie in the big screen version of the HBO show.
"Spy" - June 5 Melissa McCarthy co-wrote and stars in a comedy about a CIA analyst who gets her chance to work in the field when an arms dealer (Rose Byrne) threatens to destabilize the world.
Twentieth Century Fox
"Insidious Chapter 3" - June 5 In this horror prequel, psychic Elise Rainier (Lin Shaye) agrees to help teenager (Stefanie Scott) who is being targeted by a supernatural force.
"Jurassic World" - June 12 Chris Pratt and Bryce Dallas-Howard lead the latest installment in the Michael Crichton-inspired series. This time around, the park is terrorized by a genetically-engineered dinosaur that escapes its enclosure.
"Me and Earl and The Dying Girl" - June 12 This 2015 Sundance Grand Jury winner follows an anti-social teen (Thomas Mann) who falls in love with a classmate (Olivia Cooke) who has leukemia.
"Dope" - June 19 This Sundance breakout centers on a teen (Shameik Moore) trying to make his Ivy League dreams come true in his tough LA neighborhood.
Open Road Films
"Inside Out" - June 19 Pixar takes us inside the mind of a little girl as her emotions vie for control. Amy Poehler, Mindy Kaling and Bill Hader all lend their voices.
"Ted 2" - June 26 Seth MacFarlane's foul-mouthed teddy bear returns in the sequel that finds Ted (voiced by MacFarlane) and John (Mark Wahlberg) fighting in court to prove that Ted is human.
"Batkid Begins" June 26 This feel-good documentary tells the story of a five-year-old leukemia patient who inspired people from all over the world to help him live out his dream of being Batman for a day.
"Max" - June 26 A Marine-trained German shepherd is sent to live with the family of his former handler (Robbie Amell), who was killed in Afghanistan
"Big Game" - June 26 A teenage-boy (Onni Tommila) rescues the President of the United States (Samuel L. Jackson) when Air Force One crash lands near his campsite.
"Magic Mike XXL" - July 1 Channing Tatum gyrates his way into this sequel as stripper "Magic" Mike who decides to attend an annual stripper conference in Myrtle Beach.
"Terminator: Genisys" - July 1 Arnold Schwarzenegger is back as the unstoppable android as he fights to protect Sarah Connor (Emilia Clarke) with the help of Kyle Reese (Jai Courtney).
"Minions" - July 2 The Minions are back in this "Despicable Me" spinoff. This time, they are recruited by a super-villainess (Sandra Bullock) in her plot to take over the world.
"The Bronze" - July 10 "Big Bang Theory" star Melissa Rauch co-wrote and stars in this comedy about a former Olympic athlete clinging to her last shreds of fame.
"Self/Less" - July 10 Ryan Reynolds stars in this thriller about a wealthy, dying man who pays to have his consciousness transferred into a younger body. When he begins to investigate where the body came from, he discovers a terrifying mystery
"Ant-Man" - July 17 Paul Rudd leads this Marvel comic adaptation about a con man who is given a device that can shrink him in scale by Dr. Hank Pym (Michael Douglas).
"Trainwreck" - July 17 Amy Schumer and Bill Hader star in a Judd Apatow comedy about a magazine writer (Schumer) who refuses to commit, until her relationship with a doctor (Hader) challenges her notions of monogamy.
"Stanford Prison Experiment" - July 17 Based on the infamous 1971 psychological experiment, 24 male students volunteer to play prisoners or guards in a mock-prison, only for things to spiral completely out of control.
"Paper Towns" - July 24 Based on the novel by John Green, Nat Wolff plays a boy who convinces his friends to embark on a road trip to find the missing girl next door (Cara Delevingne).
Twentieth Century Fox
"Pixels" - July 24 Adam Sandler leads a team of gamers (Kevin James, Josh Gad, Peter Dinklage) who must fight aliens that invade Earth in the form of classic video games.
"Southpaw" - July 24 Jake Gyllenhaal packed on the muscle for this drama about a troubled boxer fighting to regain custody of his daughter. Antoine Fuqua directed based on a script by Kurt Sutter.
The Weinstein Company
"Irrational Man" - July 24 Joaquin Phoenix and Emma Stone star in a Woody Allen film about a college philosophy professor (Phoenix) who enters into a relationship with his student (Stone).
"Mission: Impossible - Rogue Nation" - July 31 Tom Cruise once again does the impossible as he leads his team against an international syndicate intent on destroying the Impossible Mission Force.
"End of the Tour" - July 31 Jesse Eisenberg stars as Rolling Stone journalist David Lipsky as he conducts a series of interviews with author David Foster Wallace (Jason Segel). The film is based on Lipsky's book, "Although of Course You End Up Becoming Yourself."
"Fantastic Four" - August 7 Miles Teller (Mr. Fantastic), Michael B. Jordan (Human Torch), Kate Mara (Invisible Girl), and Jamie Bell (The Thing) lead this comic adaptation about the superhero team that gained powers after an accident in space.
Twentieth Century Fox
"Masterminds" - August 7 Kristen Wiig, Jason Sudekis and Zach Galifianakis star in this heist comedy about a real 1997 armored car robbery in North Carolina
"The Man From U.N.C.L.E." - August 14 Henry Cavill and Armie Hammer play an American and Russian agent forced to team up to stop an evil organization trying to steal nuclear weapons. The film is based on the 1964 TV series of the same name.
"Straight Outta Compton" - August 14 O'Shea Jackson Jr., the son of Ice Cube, plays his father in this look at the impact of the revolutionary gangster rap group NWA.
"Hitman: Agent 47" - August 28 Rupert Friend stars in this video game adaptation about a genetically engineered assassin who teams up with a mysterious young woman to bring down an evil corporation.
Twentieth Century Fox
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TheWrap Summer Movie Preview 2015: ”Mission: Impossible 5,“ ”Entourage,“ ”Mad Max: Fury Road“ also among season’s big releases