The studio’s arrangement with AMC Theatres and Cineplex Entertainment could rattle exhibitors who’ve been fighting efforts to offer new films on home video before they’re done showing in theaters. In the past, exhibitors have been less agreeable with Netflix, which plans to finance movies including Crouching Tiger, Hidden Dragon: The Green Legend in the hope of debuting them simultaneously in theaters and online. And they famously forced Universal to back off in 2011 when it tried to offer the Ben Stiller-Eddie Murphy movie Tower Heist on Premium VOD just three weeks after it was due to open in theaters.
In the latest move, Paramount is planning to supply Paranormal Activity: The Ghost Dimension (to be released October 23) and Scouts Guide To The Zombie Apocalypse (October 30) to digital home video outlets 17 days after each film dips below 300 domestic theaters. At that point AMC and Cineplex and other exhibitors that show the films will receive an undisclosed percentage of the studio’s digital revenues for the period ending 90 days after the movies were first released.
Each exhibitor would receive an amount proportional to its gross share of the theatrical market. Paramount says that it is talking to other exhibitors to offer them “a similar arrangement for these two films.”
“Movie-lovers want us to respond and meet their desires,” Paramount Pictures CEO Brad Grey says. “Exhibitors want to keep their businesses strong. Filmmakers want us to put a premium on the theatrical experience and optimize consumer access to their creations. Our hope and intent is that this initiative offers a degree of innovation that benefits all parties.”
Some films make almost all of their box office revenue in six weeks or less. That leaves “a two month window where they are completely unavailable in the legitimate marketplace,” says Paramount Worldwide Distribution and Marketing President Megan Colligan. “This new distribution strategy is modular and allows us to engage with consumers throughout the lifecycle of our films to meet their needs while reducing the piracy window.”
Although theater owners have jealously protected the 90-day period when they want to offer films exclusively, AMC Theaters CEO Gerry Lopez says that “every movie is different and a one-size-fits-all business model has never made sense.” The new arrangement with Paramount “aligns the interests of consumers, filmmakers and exhibitors to maximize the theatrical experience first and then enable legitimate digital access.”
The National Association of Theatre Owners is taking a wait-and-see approach to the test. “For several years we’ve been asking studios to work with exhibitors on new models that grow the pie,” spokesman Patrick Corcoran says. “We’re glad Paramount has reached out to theaters.” The impact “remains to be seen” — and will be “determined by theater companies.”