Fox Continues Battling Europe on Release Window Issue
Filed under: Comedy, New Releases, Distribution, Exhibition, 20th Century Fox, Fox Searchlight, Family Films, Home Entertainment
20th Century Fox has a short memory ... or a lot of nerve. Despite the studio's very recent battle with German exhibitors on the issue of release windows -- which it lost -- Fox continues to see how far it can go with shrinking the time between its films' theatrical debut and video debut. This time Fox has upset the British market, announcing a UK DVD release date for Night at the Museum that is barely three months after the comedy's bow in UK cinemas. Like in Germany, there will be a boycott of the movie by most theater chains. Beginning tomorrow, Night at the Museum will not be shown in cinemas run by Cineworld, Odeon, Vue and Showcase.
People in the UK can still see the movie this weekend, but only at Empire, Apollo and some independent theaters, all of which claim a stronger obligation to the customers than to the goodness of a united national position (even though they apparently agree with that position). Despite the absence of real support from the little guys -- some of which, it is probable, need that Museum business this weekend -- Fox is likely to be hurt by the boycott. Museum is the second biggest movie of the season in the UK, and without the theatrical hiatus, it would continue to make the studio millions over the weekend. It is interesting to point out that Eragon, which is one of the films involved in the German boycott, is not part of the threat/action, possibly because it isn't performing nearly as well.
Hopefully, for customers, exhibitors and the image of Fox, there will be the announcement of a postponement of the Museum DVD before tomorrow morning. Otherwise, you'll hear of other effects come Monday.
Reader Comments (Page 1 of 1)
2-02-2007 @ 3:44AM
arvind ethan david said...
In my view, it’s worse than that. It is a missed opportunity for an industry which is breaking down to try and heal itself, and a classic case of what game theorists call “The Prisoner’s Dilemma“: a situation where two parties (represented by two police prisoners accused of the same crime based on circumstantial evidence and being interrogated in separate rooms), if they co-operated (both deny the crime) and worked for their mutual interest could benefit, but because they choose to betray the other and work for their individual interests (he did it, nothing to do with me), both end up loosing and going to jail.
Game Theorists use the Prisoner’s Dilemma to show that situations that appear Zero-Sum when viewed from a single perspective, are in fact win-win when parties take into account each other’s positions and longer term outcomes.
I think both Fox and the Exhibitors are acting like idiot prisoners over this one.
Now before I get my house picketed by Cinema owners and Murdoch lovers alike, give me a minute to explain.
1. I don’t dispute the fairly clear evidence that shrinking the theatrical window has, in a lot of instances, the effect of depressing box-office returns. Which in a context of steadily decreasing cinema audience numbers (particularly in Germany where exhibitors are under real threat)
2. But neither is it possible to dispute that releasing the DVD early during a key shopping season (Fox wanted to be able to get the DVDs into shops in time for Easter break) would have provided significant uplift to DVD sales.
3. So the key question would appear to be, what’s the net gain in revenue. Do the gained DVD sales more than make up for the lost theatrical revenue. Right? Surely Fox having done the calculation had decided that more DVDs more than made up
Wrong. Because the math works out differently if you are Fox or if you are the Cinema chains.
The interests are not aligned. Because of the way the deal terms between studios-exhibitors and studios - retailers are structured, and because DVDs cost more than cinema tickets; Fox earns more per DVD sold than per ticket sold. Cinema owners on the other hand don’t earn a penny from DVDs, where else for each ticket sold, they earn not only 50% or more of the ticket price, but 2-3 times as much again from concession sales and advertising. And the loss of that would be so painful that they are willing to yank high grossing movies out of their chains rather than contemplate a set precedent for a shortened window.
The prisoners, in their separate rooms, come to different conclusions as to what is best for them personally, and end up screwing each other.
The obvious question might be, why doesn’t Fox offer the cinema’s a piece of the DVD action to compensate them for lost theatrical revenue? Everyone in the industry knows that DVD success is intrinsically linked to the hype and awareness created by a theatrical success - why not acknowledge that in the deal.
Such an obvious question that there is no answer to it. Because they keep acting like prisoners and keep screwing each other.
By contrast, this path of action has been tried, on a smaller scale, by niche distributors in the US such as Magnolia and IFC, both of whom have been doing “day and date” or crashed window releasing of small films for several years now - and presumably find it is working out rather well for them - using the theatrical buzz to drive DVD sales and maximising their marketing spend. How come they can do it? Because they are vertically integrated - Magnolia is owned by Cuban / Wagner companies, which also own the Landmark Theatre Group, and IFC owns a handful of its own cinemas. They are in a position to stop acting like two separate prisoners with competing interests, and act in concert.
I bet a lot of studios are wishing that anti-competitive laws didn’t prohibit them from buying up cinemas right now. Is that the only way? I hope not. Watch this space.
Reply