DVD pace quickens; theaters vent worry

[administrator]

HOLLYWOOD – DVDs featuring new movies are coming out faster than ever.

The average time between the premiere of a movie at the multiplex and its appearance on DVD shrank an additional 10 days last year, further unnerving theater owners who believe that the tightening window threatens their business.

The revelation from a new study is likely to further shake exhibitors when it is formally unveiled this week by the National Association of Theatre Owners at the industry’s annual ShoWest convention in Las Vegas. “The pace of the shrinkage is of concern to us,” association President John Fithian said. “Ten days in one year is a lot.”

How much time should pass before a studio sells a film on DVD continues to be one of Hollywood’s hot-button issues.

Despite slower growth recently, DVDs remain a lucrative gravy train for studios, which believe they must accommodate consumers demanding quicker access to films and myriad choices. In addition, studios can piggyback on the awareness their expensive marketing campaigns have built by releasing DVDs sooner.

But exhibitors fret that moviegoers will shun going to a theater if they know a movie will be available shortly on video. In four years the average period between a film’s theatrical and DVD releases narrowed by an entire month, to four months and eight days.

“My concern is that once we get to a point where the windows are too short, it’s too late to do anything about it,” said Mike Campbell, chief executive of Regal Entertainment Group, the nation’s largest chain.

Campbell said that any DVD waiting period less than four months would be “a very damaging experiment and not in the best interest of anyone.”

But that’s what happened in the fourth quarter. The average narrowed to three months and 25 days, a trend Fithian said was especially alarming.

One positive development in the study showed a widening of the time it took for last year’s highest-grossing films to become available on video. “Blockbusters tend to have longer windows,” Fithian said, because they stay in theaters longer.

Films grossing less than $25 million had the quickest path to the DVD shelf, which probably brought the overall industry average down.

Another factor in the shrinkage is that movies now generally have much shorter box-office runs than they once did. That’s because studio films usually open on thousands of screens to generate big opening weekend receipts, then are quickly replaced with newer releases the moment they taper off. With flops, theaters pull the plug even sooner.

Box-office sales make up about 30 percent of a studio’s worldwide revenue pie, with DVD sales accounting for 45 percent and TV 25 percent.

The shrinking time frame underscores the tensions and delicate nature of the partnership between studios and exhibitors, which split movie ticket sales. Both are grappling with erratic box-office returns, worried that they face growing competition from video games, home theater systems and online entertainment.

No major studio has yet to simultaneously release a movie in theaters and on DVD, and executives doubt they will any time soon. But some analysts have speculated that studios could increase annual revenue by launching their movies all at once.