‘Paranormal Activity’ Finale Gambles on Low Box Office, High VOD

Studio hopes to earn more from early VOD release on “The Ghost Dimension” despite wrath of many theater chains

Paramount is anticipating that “Paranormal Activity: The Ghost Dimension” will have the lowest opening in the found-footage horror franchise’s history. But the studio is willing to sacrifice lower theatrical grosses for larger returns from its radical experiment with shortening the window for video-on-demand availability.

“Ghost Dimension” is on track for a $10 million to $12 million debut on 1,600 screens — significantly less than the 2,867 theaters that played the last film in the franchise, 2014’s “The Marked Ones,” for its $18.3 million debut.

What the studio loses in theatrical grosses it hopes to make up in robust VOD sales by releasing the film just 17 days after it falls below 300 screens theatrically. Usually, a movie gets released on DVD or VOD 90 days after it first plays in theaters.

We went into it knowing that we were taking a little risk,” Megan Colligan, the studio’s president of Worldwide Marketing & Distribution, told TheWrap. “We hope we do well enough that people can say this is an interesting model and something that we should think about.”

Indeed, Paramount’s experiment could potentially reshape the industry by shifting its revenue stream away from a reliance on theatrical grosses.

“I don’t think Paramount will really sweat whether they make $10 million or $12 million less on ‘Paranormal Activity,’ because this whole play isn’t about this week, or next week,” one exhibition executive told TheWrap.

Shortening the window has become a hot-button issue for theater owners, who argue that people won’t go to the multiplex if they know they can watch at home in less than three months. Last weekend, Netflix released the indie drama “Beasts of No Nation” on the streaming service on the same day as they did in theaters, prompting many theater chains to boycott booking the film.

The resistance to shortened windows is similarly pronounced for “The Ghost Dimension.”

Regal Cinemas and Cinemark, the nation’s largest and third-largest chains, are among several exhibitors refusing to play the “Paranormal Activity” sequel since Paramount struck a deal with rivals AMC Theatres and Cineplex Entertainment in July to allow consumers to watch the movie at home just 17 days after it leaves most theaters, rather than the standard 90 days. Under the deal, AMC and Cineplex will share some of the studio’s early VOD revenues.

“The aim here was to find a way to make this work, and whether this particular approach is the right one or not, at least there is a dialogue and evidence that the two sides can work together,” the exhibition executive said.

Paramount is hedging its bets by shooting “The Ghost Dimension” in 3D, boosting the budget of the finale of the six-movie series to $12 million with a format that plays better in theaters. The first movie, made for just $15,000, opened to $19.6 million from 760 theaters in 2009 — then went on to scare up an impressive $107 million cumulative haul.