Paramount, Theaters Look to Redefine Home Entertainment Release Window

8 Jul, 2015 By: Erik Gruenwedel

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In a move underscoring the rapidly evolving digital entertainment landscape, Paramount Pictures, AMC Theatres and Cineplex Entertainment July 8 announced a first-of-its-kind in-theater and digital revenue-sharing initiative that could potentially redefine home digital distribution windowing.

Under the agreement, upcoming Paramount releases Paranormal Activity: The Ghost Dimension and Scouts Guide to the Zombie Apocalypse will be given a wide release this fall with digital home entertainment purchase available 17 days after the film dips below 300 domestic theaters. 

In effect, consumers for the first time could get retail access to theatrical movies still showing in theaters.

AMC and Cineplex and other exhibitors will receive a percentage of any of the studio’s digital revenue for the period of digital availability through 90 days from the initial U.S. theatrical release, with each exhibitor’s share proportional to its theatrical gross market share. Paramount said it is in discussions with other exhibitors and would offer them a similar arrangement for these two films.

Paramount said the move is an effort to work with exhibitors both to grow revenue in a rapidly evolving entertainment environment and to maintain the value of exhibition and acknowledge the role of exhibitors in the larger distribution cycle.

While the studio says the innovative approach “responds to consumer desires for earlier digital access” and piracy, it is no secret studios and theater operators are responding to Netflix, which plans to release theatrical titles day-and-date with streaming access. First up for the SVOD pioneer is a sequel to Oscar winner Crouching Tiger, Hidden Dragon, to be released in August.

“Movie-lovers want us to respond and meet their desires. 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,” Brad Grey, chairman and CEO of Paramount Pictures, said in a statement.

Paramount designed the plan after analyzing the performance of its recent film slate against metrics related to length of time in wide release, piracy activity and sales across windowing periods.

With some films generating 99% of their gross in the first four-to-six weeks of release, followed by a two month window where they are completely unavailable in the legitimate marketplace. It is this period of time that has irked Ted Sarandos, chief content officer with Netflix. He is championing significantly shortened theatrical windows in order to expedite the retail and rental windows.

Gerry Lopez, CEO of AMC Theatres, says this new distribution strategy allows theaters to engage with consumers throughout the lifecycle of films and meet studio needs while reducing the piracy window.

“This model aligns the interests of consumers, filmmakers and exhibitors to maximize the theatrical experience first and then enables legitimate digital access,” Lopez said in a statement.

Paranormal Activity: The Ghost Dimension will be released Oct. 23 and Scouts Guide to the Zombie Apocalypse will be released Oct. 30.

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