One of the strategies being used to combat video piracy has been shrinking the time between theatrical and DVD releases. Similar to their U.S. counterparts, overseas theater chains are battling the studios over the issue.
With foreign market ticket sales higher than the U.S. domestice sales, they at the least have some leverage for negotiations.
Overall worldwide box office sales last year was $25.8 billion, rising 11 percent. U.S. sales accounted for a 5.5 percent increase, taking in $9.5 billion, while overseas sales rose by a much larger 14 percent to reach $16.3 billion. These are definitely two combatants with opposite agendas.
The studios pretty much make the vast majority of their money on DVD sales. The longer it takes for DVDs to come out, the more money they lose through pirated copies. For theaters they want their seats to be filled while selling from their concessions, which makes up such a big part of their profits. If moviegoers stay home and wait to see a DVD that's coming out quickly, the theaters lose out in an already diminishing market.
What foreign theater owners are doing is trying to get laws implemented that would stop the studios from cutting down the time between a movie and DVD release. Ad Westrate, president of the International Union of Cinemas (UNIC), which represents around 30,000 screens said that a French law that disallows DVD releases within six months of the theatrical run is the type of model that he's looking at. "We are trying to implement this law in other nations," he said. "Shortening the window is not the answer to piracy."
Andrew Cripps, president of Paramount Pictures International, told those at a movie theater industry conference that "the marketplace has to dictate those things." He opposed laws created that imposed arbitrary time limits on DVD releases.
This is a tough one. Both sides really have a point. But if studios aren't able to make money on DVDs, they're not going to be able to make money. They really don't make much money at all on the vast majority of theater releases.
If I was a theater owner I'd already be looking at other ways to make money besides through theatrical releases. Some owners are already doing that by making their theaters a destination through serving food, drinks and other ideas like that. To think that they will survive by doing business as usual I think will be a mistake.
To attempt to force the studios to wait to release DVDs doesn't really make good business sense at all. The studios are right in that they should let the market make that decision, not governments.
Remember to Sign up for my feed, bizzbite and digg this!
Comment Preview