August 20, 2020
Several “captains” in this month’s Women in Home Entertainment section noted that one of the long-term effects of the pandemic may be a change in how entertainment is distributed to consumers.
Indeed, we’ve already seen the beginnings of that dramatic shift in content windowing with premium VOD releases such as Trolls World Tour and Scoob!, which went directly into homes as theaters were shuttered. On the heels of those developments, theater chain AMC bowed to the changing times, making a shortened window deal with Universal Pictures. The deal allows Universal to distribute titles on PVOD as few as 17 days after they bow in AMC Theatres, which will receive a cut of the PVOD revenue.
The imprimatur of a theatrical release will certainly take a hit as more quality titles rush into the home window, and the pandemic may forever change how consumers view the home market. The quality of content on TV and from SVOD services such as Netflix and Amazon Prime Video had already boosted the allure of watching at home, and the closing theatrical window will likely do the same.
The home entertainment market has had to adapt to numerous distribution models, from video rental stores to sellthrough at mass merchants to VOD. The market has also undergone numerous format changes, from Betamax to VHS to DVD to Blu-ray to 4K Ultra HD to digital. Now, it seems, the theatrical marketplace is being forced to adapt, too.
“There will have to be a descreening [in the theatrical business],” noted Michael Nathanson, of research firm MoffettNathanson, in a DEG: The Digital Entertainment Group presentation Aug. 20.
“We are the most overscreened countries in the world, the U.S. and Canada,” he added.
Meanwhile, AMC’s if-you-can’t-beat-them-join-them deal with Universal “shocked” and “puzzled” his team, Nathanson said.
“We think it’s a very dangerous precedent,” he said, adding it is “a bad outcome for theaters.”
“At the end of the day, the theatrical business will be one of blockbusters,” he said.
Meanwhile, PVOD will only gain, with a 17- to 30-day window established and Disney, Universal and Warner leading the charge, he said.
“I think PVOD just becomes the way of the world,” he said.