BUSINESS

Cineplex, Paramount to cut time between film release, home viewing in experiment

07/08/2015 05:24 EDT | Updated 07/08/2016 05:59 EDT
TORONTO - Hollywood studio Paramount Pictures is pairing with movie chain Cineplex Entertainment to test a shorter window of time between theatrical releases and their arrival for home viewing.

Under the plan, low-budget Paramount horror films "Paranormal Activity: The Ghost Dimension" and "Scouts Guide to the Zombie Apocalypse" will make their way into theatres this October.

When the films have been scaled back to play on fewer than 300 screens across North America — a sign that the movies have exhausted most of their box-office potential — a 17-day clock will begin ticking for their home release on Apple's iTunes, the Cineplex Store and other video-on-demand platforms.

As part of the agreement, Cineplex would receive a percentage of revenue from digital rentals and sales proportional to what it would've earned from ticket sales, the companies said in an announcement Wednesday. That will last for 90 days from the film's initial theatrical release date.

It's the shortest window proposed for a major studio release yet in Canada and it could shake up the long-standing tradition that puts a minimum 90-day window between a movie's release in theatres and its eventual premiere on DVD and video-on-demand services.

It's not a coincidence that Paramount chose two horror movies for the experiment. The genre is known for its short lifespan in theatres where audiences show up in droves for the opening weekend before the box-office plummets within a week.

That's why Cineplex chief executive Ellis Jacob says moviegoers shouldn't expect this to extend to the next big summer blockbuster, which can spend months in theatres.

"You're not going to do this with a 'Mission: Impossible' or 'Terminator' because those movies will last in theatres way beyond the full-week mark," Jacob said in an interview.

"This is about those niche movies with specific genres."

For Cineplex (TSX:CGX), the test run offers a new revenue stream for a business pressured by stagnant growth in ticket sales.

Paramount could also spend less marketing its films, as it wouldn't have to buy ads once for the theatrical release and again for the home entertainment launch.

"Some films generate 99 per cent 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," said Megan Colligan, president of Worldwide Distribution and Marketing at Paramount.

Several smaller distributors have played with other approaches to the traditional theatrical window, including a simultaneous release to theatres and video-on-demand. However, Cineplex has not played those films in its theatres, saying it would hurt its theatrical business model.

Paramount says it will also try the experiment with the AMC Theatres chain in the United States and is also in talks with other U.S. exhibitors for similar agreements.

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