Yet Another (Yes Another!) Study Suggests Hollywood's Problem Is Dumb Release Windows That Cost It Money
from the damn-the-facts,-it's-piracy-piracy-piracy dept
It really was just two months ago that we pointed to yet another study saying that the problem that Hollywood was facing with infringement was almost entirely its own fault for creating stupid "release windows" that make it harder for consumers to view what they want, when they want it. It's that point alone that is driving significant amounts of infringement. It doesn't add much new, but a new report suggests that if the studios got rid of the windows, they would actually make more money. In aggregate, people would end up spending more money on movies. Of course, we've made this argument for years.To be fair, a big part of the reason this doesn't happen is because of the theaters themselves. Any time the studios seek to take away the box office window by releasing something elsewhere earlier or at the same time, the theaters throw a complete hissy fit -- effectively admitting that they're so bad at the service they provide, that they can't compete with home theaters. Of course, it's not all the theaters' fault. As we've seen with studios like Warner Bros., they're so obsessed with the ability to price differentiate through windows, that they keep seeking to add new windows, which only serve to drive more consumers to infringe.
Honestly, I'm at a loss as to why Hollywood can't do the math here, in terms of how much they'd gain from doing day-and-date release for everything (even if it meant fighting the theaters). It seems like a clear win, with multiple studies supporting that, including this new one. They seem to think the only way to price differentiate is through windows -- but, as lots of others have discovered, you can launch a variety of differentiated offerings at the same time and offer them at different prices, and the market self-segregates. Sooner or later, someone at a movie studio is going to figure this out, and make that studio a lot of money.
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Filed Under: business models, hollywood, research, windows
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...Save us, Internet!
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Eejit, unfamiliar with that word. Is that "A** My Laughing Off" or something else?
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LMAO
I thought the studios already make A LOT of money. Maybe if they stop financing Congress they can make even more.
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In a very distant future, if ever, at a movie studio is going to figure this out, and make that studio a lot of money.
There, fixed for you.
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The issue
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It's all about choice
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Re: It's all about choice
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/sarcasm
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The major studios would never do this. You might be able to successfully argue the idea to a smaller studio (I dunno, maybe someone like Relativity) but such studios simply don't have the muscle to go against the theaters. If you compare the docket of a Relativity versus, say, Warner Brothers:
Relativity:
Haywire (January,20)
Act of Valor (February,24)
Mirror Mirror (March,30)
Movie 43 (Apirl,13)
The Raven (April,27)
House at the End of the Street (September,21)
Hunter Killer (December,21)
21 and Over (TBA)
Warner Brothers:
Journey 2: The Mysterious Island - February 10
Ghost Rider: Spirit of Vengeance - February 17
Project X - March 2
Wrath of the Titans - March 30
Bullet to the Head April 13
The Lucky One - April 20
Dark Shadows - May 11
Rock of Ages - June 15
Magic Mike - June 29
The Dark Knight Rises - July 20
The Apparition - August 24
Cloud Atlas - October
Gravity - November 21
The Hobbit: An Unexpected Journey - December 14
The Great Gatsby - December 25
Who Bump Tom Cat - December 31
The theater could threaten, and successfully carry out, a boycott of Relativity movies with far less impact then they could if they threatened Warner Brother with a similar boycott.
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If someone, like WB, decided to release 'The Dark Knight Rises' to blu-ray the same day to theaters, there is NO FRICKING WAY that AMC will boycott it. Heck, other chains like Regal or Rave might step up and buy the rights and advertise that AMC doesn't have it!
The problem today is that Hollywood spends a great deal of resources in trying to protect it's current cash cows, that any hint of change closes their doors to other opportunities.
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Actually the Matrix would be awesome to watch that way!
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Companies actually pay the studios for the privilege of getting the movies 28 or 56 days before their rivals.For a business it is awfully hard to pass up a contract with a fixed cash payment as opposed to some diffuse future revenue stream. That may be a foolish perspective in the long run, but it is always tempting to take the immediate cash.
One big problem with early release agreement approach is that many of the early release partners are dying slow and painful deaths. Blockbuster is on life support, and On-Demand services are usually tied to cable television which is suffering from a lack of growth potential and market shrinkage as more people cut the cable.
Another problem delayed release causes is that the later releases kill marketing efforts. At least up until now you could add a movie to your Netflix queue when you see the advertisement for it, then have it show up 28 days later. In the lastest brilliant Hollywood move you can't add it to your queue for 28 days. It delights the dying Blockbuster, of course, but by the time the 28 days expires I no longer remember the movie so I never add it to my queue. What an enlightened business strategy!
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I haven't ordered a single PPV movie since the 24-hour limit started. I also haven't purchased any of those movies, or any more than I typically purchase. I just made a clever search on my DVR to always have 5 movies available at all times in HD. How's that working out for them?
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Studio Exex: But that method worked great since the 80s. What do you mean its costing us money?
Researcher: Given internet based entertainment choices people do not want to wait for a movie to be released 6 months after it was in theaters. The especially do not want to wait over a year for the geographic restrictions. They want it much sooner, and because you are unwilling to give them what they want they are using methods like Bit-torrent to get it.
Studio Exec: So Piracy is the problem...... Thank you, you may go researcher. Gene? (Secretary)
**researcher leaves the report on the desk and walks out as the secretary walks in
Gene: Yes sir?
Studio Exec: Get Lamar Smith on the phone. Tell him its that "special" contributor from California.
Gene: Right away sir.
**she turns to leave, but the studio exec grabs the study and hands it to her before she goes.
Studio Exec: And shred this. I got what I need out of it.
Gene: Right away.
**Gene leaves the office and closes the door behind her.
Studio Exec: Fucking Pirates.(**muttered)
/end
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Appeasing the theaters
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RE: Appeasing the theaters
About 40-50% of the people leaving bought the movie. I would doubt that many would buy it 4-5 months later.
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And then once same day world-wide releases becomes the norm, they can make more money by reintroducing windows on their biggest films. Special previews with $20 tickets. Maybe put a little glamor back into show business.
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2cents
People (on a case by case basis) are going to spend roughly the same amount on "Entertainment." What I mean to say is for every person, there is a dollar amount they WANT to spend on entertainment each month. The only thing that really affects this number is the availability of such entertainment, and probably to some extent marketing / advertisements. This seems like an underlying fact that the entertainment industry wants to ignore.
If theaters boycotted same day streaming/dvd releases by not showing something like the Dark Knight Rises, they would be incredibly stupid. A movie theater is a completely different experience (usually a social one, though not necessarily) than watching something on your computer, or even at home on a home theater (visual/audio is inferior). But if they DID boycott, fans would still find a way to see the movie.
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They aren't going to innovate themselves out of a job.
These dinosaurs will change when they have to change, and not a moment before, because these middle managers aren't going to put themselves and their subordinates out of work.
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Re: They aren't going to innovate themselves out of a job.
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It's a Monopoly
I think it helps to realize that entertainment companies are a sort of monopoly. Sure, there are many studios, big and small, but if you want to watch this particular movie or listen to that particular singer, someone in the chain must deal with the particular studio that owns the rights.
The main focus of the monopoly is not maximizing customer service (indeed, the fundamental problem with monopolies is that they don't have to care at all about customer service), it's maintaining control.
If you own Toy Story 3 or War Horse, your only competition for people wanting to see these movies are the pirates. Stop the pirates and you can have any release window you want and there's nothing anybody can do about it. And you like your release windows.
So of course you will do whatever you can to get the pirates and save your monopoly. Screw the internet users. Your secretary spends too much time on Facebook anyway.
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What happened to day and date?
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Don't blame the cinemas -- they have no say
When a new release hits the theatres, the terms usually amount to the studios getting all the profits for the first several weeks, and the cinema only starts collecting a piece (~ 10%) of the ticket sales after three or four weeks (longer for a real block-buster). Then they start to collect a growing share, the longer the movie stays on the marquee.
That's one of the reasons films with relatively low turnout numbers get dropped so fast -- the cinema is never going to see a dime from showing them (technically they get a few percent to "cover costs", but it's inadequate to even that).
That's also why popcorn and carbonated flavoured water keep getting even more ridiculously expensive, and pre-show advertizing has gotten so intrusive -- the cinema has essentially been cut out of the actual screening revenue, until the studio agrees they've pulled in enough dough, that they don't mind sharing a few crumbs at the end of the run.
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Yeah...um, i dont get it
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