Disney's plan to release 'Alice' on DVD early upsets theaters
02-12-10, 10:33 AM
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Disney's plan to release 'Alice' on DVD early upsets theaters
http://www.latimes.com/business/la-f...,2771995.story
Not sure if this was posted elsewhere.
I don't see how yanking 'Alice' after 3 months is going to hurt Disney. By that I would believe it has earned at least 90% of its gross.
Chris
The studio plans to release 'Alice in Wonderland' on disc three months after it opens March 5 instead of the usual four months. Exhibitors worry it will keep people from watching it on the big screen.
By Claudia Eller, Dawn C. Chmielewski and Richard Verrier
6:08 PM PST, February 11, 2010
In a move that begins to redraw the way movies are distributed, the Walt Disney Co. plans to release the film "Alice In Wonderland" on DVD only three months after it opens in theaters March 5.
The decision signals a big shift in strategy for Disney, which until now has resisted tampering with the traditional four-month period between a movie's theatrical release and its availability in the home. Some theater operators, who worry that pushing up the date of DVD releases will dissuade people from watching movies on the big screen, fear that Disney's action could snowball and become standard industry practice.
The chief executive of one regional circuit in Knoxville, Tenn., said he would yank "Alice" off screens as soon as it reaches DVD.
"I speak for myself and other exhibitors when I say we don't like it," said Phil Zacheretti, chief executive of Phoenix Big Cinemas Management, which operates 170 screens in 13 states. "It encourages people to wait for the DVD to come out. Three months is way too early on any film, much less what's being touted as a potential blockbuster."
Exhibitors, which split box-office revenue with the studios, generate higher profits the longer they can keep a movie in theaters.
Disney Chief Executive Bob Iger has championed a change in movie release patterns to address the changing habits of consumers, who want to see movies on their big-screen TVs or portable devices without waiting months for the DVD.
The decline of DVD sales, exacerbated by the recession, prompted Iger to renew the call to speed up a film's release to the home.
Until now, Iger has not made the move -- despite raising the idea five years ago -- because of resistance from theater owners.
Exhibitors have admonished other studios that have shortened release windows.
In November, major theater chains yanked Sony Pictures' family animated comedy "Cloudy With a Chance of Meatballs" after the studio announced it would release the movie to owners of its Internet-connected TVs a month before its DVD release. Similarly, Paramount Pictures raised the ire of exhibitors when it released its summer blockbuster "G.I. Joe: The Rise of the Cobra" on DVD slightly less than three months after its theatrical debut.
Since those flare-ups, however, major theater owners have acknowledged that they need to adapt to a changing market.
Exhibitors have been meeting with studio executives for months, agreeing to be more flexible about their period of exclusivity, as long as it doesn't lead to a wholesale collapse of so-called release windows.
Walt Disney Studios Distribution President Bob Chapek and distribution executive Chuck Viane have been meeting with major theater chains to explain Disney's reasons for accelerating DVD releases, which they say will be limited to a couple of movies annually.
But Iger's pointed remarks Tuesday about "windows" during an earnings call with analysts roiled exhibitors, according to people familiar with the matter. He signaled Disney's plans to begin compressing the release time to maximize DVD revenue, which long has propped up profits for the movie business.
Chapek offered a similar explanation Thursday.
"It is important for us to maintain a healthy business on the exhibition side and a healthy business on the home video side," Chapek said. "We remain committed to theatrical windows, with the need for exceptions to accommodate a shortened time frame on a case-by-case basis."
Disney said its decision does not auger a broader policy shift, presenting it as one that mutually benefits Disney and exhibitors.
In order to make and release an expensive 3-D film such as director Tim Burton's "Alice in Wonderland," starring Johnny Depp, the studio is seeking to maximize DVD sales to help recover costs. Disney wants to release the discs in early June, while the movie is still fresh in consumers' minds, rather than at the height of the summer season when DVD sales fall off.
Tony Kerasotes, chief executive of Kerasotes Showplace Theatres in Chicago and chairman of the National Assn. of Theatre Owners, said most exhibitors would probably support Disney's decision, as long as the early release of "Alice" was an exception to the traditional release window and not the rule.
"The income that studios get through DVD sales has been seriously depleted, and we're generally supportive of some experimentation on a limited basis to see if they can improve their revenue," Kerasotes said.
The Disney news was met with less than an enthusiastic reception in Britain, where two major chains, Odeon and Vue, pulled the "Alice" film trailer and refused to sell advance tickets. Viane met with overseas exhibitors to explain that Disney wanted to avoid competing with the World Cup soccer tournament, which begins June 11 in South Africa.
[email protected]
dawn.chmielewski@
latimes.com
richard.verrier@
latimes.com
Copyright © 2010, The Los Angeles Times
By Claudia Eller, Dawn C. Chmielewski and Richard Verrier
6:08 PM PST, February 11, 2010
In a move that begins to redraw the way movies are distributed, the Walt Disney Co. plans to release the film "Alice In Wonderland" on DVD only three months after it opens in theaters March 5.
The decision signals a big shift in strategy for Disney, which until now has resisted tampering with the traditional four-month period between a movie's theatrical release and its availability in the home. Some theater operators, who worry that pushing up the date of DVD releases will dissuade people from watching movies on the big screen, fear that Disney's action could snowball and become standard industry practice.
The chief executive of one regional circuit in Knoxville, Tenn., said he would yank "Alice" off screens as soon as it reaches DVD.
"I speak for myself and other exhibitors when I say we don't like it," said Phil Zacheretti, chief executive of Phoenix Big Cinemas Management, which operates 170 screens in 13 states. "It encourages people to wait for the DVD to come out. Three months is way too early on any film, much less what's being touted as a potential blockbuster."
Exhibitors, which split box-office revenue with the studios, generate higher profits the longer they can keep a movie in theaters.
Disney Chief Executive Bob Iger has championed a change in movie release patterns to address the changing habits of consumers, who want to see movies on their big-screen TVs or portable devices without waiting months for the DVD.
The decline of DVD sales, exacerbated by the recession, prompted Iger to renew the call to speed up a film's release to the home.
Until now, Iger has not made the move -- despite raising the idea five years ago -- because of resistance from theater owners.
Exhibitors have admonished other studios that have shortened release windows.
In November, major theater chains yanked Sony Pictures' family animated comedy "Cloudy With a Chance of Meatballs" after the studio announced it would release the movie to owners of its Internet-connected TVs a month before its DVD release. Similarly, Paramount Pictures raised the ire of exhibitors when it released its summer blockbuster "G.I. Joe: The Rise of the Cobra" on DVD slightly less than three months after its theatrical debut.
Since those flare-ups, however, major theater owners have acknowledged that they need to adapt to a changing market.
Exhibitors have been meeting with studio executives for months, agreeing to be more flexible about their period of exclusivity, as long as it doesn't lead to a wholesale collapse of so-called release windows.
Walt Disney Studios Distribution President Bob Chapek and distribution executive Chuck Viane have been meeting with major theater chains to explain Disney's reasons for accelerating DVD releases, which they say will be limited to a couple of movies annually.
But Iger's pointed remarks Tuesday about "windows" during an earnings call with analysts roiled exhibitors, according to people familiar with the matter. He signaled Disney's plans to begin compressing the release time to maximize DVD revenue, which long has propped up profits for the movie business.
Chapek offered a similar explanation Thursday.
"It is important for us to maintain a healthy business on the exhibition side and a healthy business on the home video side," Chapek said. "We remain committed to theatrical windows, with the need for exceptions to accommodate a shortened time frame on a case-by-case basis."
Disney said its decision does not auger a broader policy shift, presenting it as one that mutually benefits Disney and exhibitors.
In order to make and release an expensive 3-D film such as director Tim Burton's "Alice in Wonderland," starring Johnny Depp, the studio is seeking to maximize DVD sales to help recover costs. Disney wants to release the discs in early June, while the movie is still fresh in consumers' minds, rather than at the height of the summer season when DVD sales fall off.
Tony Kerasotes, chief executive of Kerasotes Showplace Theatres in Chicago and chairman of the National Assn. of Theatre Owners, said most exhibitors would probably support Disney's decision, as long as the early release of "Alice" was an exception to the traditional release window and not the rule.
"The income that studios get through DVD sales has been seriously depleted, and we're generally supportive of some experimentation on a limited basis to see if they can improve their revenue," Kerasotes said.
The Disney news was met with less than an enthusiastic reception in Britain, where two major chains, Odeon and Vue, pulled the "Alice" film trailer and refused to sell advance tickets. Viane met with overseas exhibitors to explain that Disney wanted to avoid competing with the World Cup soccer tournament, which begins June 11 in South Africa.
[email protected]
dawn.chmielewski@
latimes.com
richard.verrier@
latimes.com
Copyright © 2010, The Los Angeles Times
I don't see how yanking 'Alice' after 3 months is going to hurt Disney. By that I would believe it has earned at least 90% of its gross.
Chris
02-12-10, 10:49 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
A lot of theaters get pissy about things like that. Alice will pull buck because it is in 3D and stars Johnny Depp, neither Disney nor exhibitors need worry.
02-12-10, 11:04 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Bottom line, for exhibitors, they might "lose" a million in revenue, which will easily be replaced by the revenue from other, fresher releases, while Disney stands to increase DVD/Blu-ray sales by a much higher margin by shortening the window.
I think the cries of the exhibitors are going to fall on deaf mouse ears this time.
Last edited by RoboDad; 02-12-10 at 11:06 AM. Reason: Added quote for context
02-12-10, 11:06 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
I was actually being very conservative when I said 90%. I thought it was a lot higher, but didn't want (can't do 
) the math!
Chris
) the math!Chris
02-12-10, 11:09 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
I think the percentage is actually higher than that. Looking at two notable releases from last year, Star Trek earned $257,730,019 in domestic box office receipts. Of that, just $2,840,889 was earned after the 3-month mark. Disney's own Up earned $293,004,164, of which $4,176,191 came after 3 months. So, the percentage of "lost" revenue looks like it will be between 1-2%, unless a significant number of people really do stay home during the overall run, in anticipation of the DVD release (which I can't see happening).
Bottom line, for exhibitors, they might "lose" a million in revenue, which will easily be replaced by the revenue from other, fresher releases, while Disney stands to increase DVD/Blu-ray sales by a much higher margin by shortening the window.
I think the cries of the exhibitors are going to fall on deaf mouse ears this time.
Bottom line, for exhibitors, they might "lose" a million in revenue, which will easily be replaced by the revenue from other, fresher releases, while Disney stands to increase DVD/Blu-ray sales by a much higher margin by shortening the window.
I think the cries of the exhibitors are going to fall on deaf mouse ears this time.
02-12-10, 11:14 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
There's really no reason for any movie to be in the theaters longer than 90 days, unless it's Avatar!
Chris
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02-12-10, 11:38 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
I'm all for getting my movies on BD as quickly as possible, but after a certain point the revenue those films generate is all cream for the theaters. Sure, something big & new & exciting will come along and put asses in seats, but the theaters don't start getting a larger percentage of the gross until after a movie has been out for a while. That $1-5m might seem like a negligible amount to anyone else, but that's almost 100% their loss while the studio has already reaped all of the substantial profits.
02-12-10, 11:40 AM
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02-12-10, 11:44 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
how often do movies stay in theaters for 3 - 4 months? unless it's a huge blockbuster with legs, most flicks are out of the movie theater (around here anyway) in about 2 months or so.
02-12-10, 11:44 AM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
I think the percentage is actually higher than that. Looking at two notable releases from last year, Star Trek earned $257,730,019 in domestic box office receipts. Of that, just $2,840,889 was earned after the 3-month mark. Disney's own Up earned $293,004,164, of which $4,176,191 came after 3 months. So, the percentage of "lost" revenue looks like it will be between 1-2%, unless a significant number of people really do stay home during the overall run, in anticipation of the DVD release (which I can't see happening).
$254 million in its first three months at the box office. Went from a screen count of 3,800+ to 300+. Average price per ticket during this time frame, $13 (includes IMAX). 19.5 million tickets sold.
$3 million in its remaining ten weeks at the box office. Went from a screen count of 300+ to 89. Average price per ticket, $2. 1.5 million tickets sold.
While it's a small chunk of change that Paramount might not have needed, 1.5 million people saw Star Trek that might not have in the regular cinema. Or most were repeat watchers. Hard to say.
Now let's look at Up.
$289 million in its first three months. Went from a screen count of 3,700+ to 200+. Average price per ticket, $13 (includes 3-D). 22.2 million tickets sold.
$4 million in its remaining twelve weeks. Went from a screen count of 200+ to 100. Average price per ticket, $2. 2 million tickets sold.
Yeah, again, $4 million is chump change for Disney; but it's 2 million people who might've not seen the film previously. People who may have bought the DVD or BD when it came out rather than have rented it from say a Redbox.
Hard to say. For films that tank at the box office, I welcome the shorter windows with welcome arms. Others, depends on the title.
02-12-10, 12:17 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
First of all, I don't think the majority of moviegoers pay that much attention to the advance DVD release dates of movies not yet in theaters, so I don't see it hurting box office, at least not in the first month where it really matters.
Second, it is opening March 5, which means three months later will be the first weekend of June. Even ignoring the other March and April releases, by that point the following big movies will have been released: Iron Man 2, Robin Hood, Shrek 4, Prince of Persia, and Sex and the City 2. Shrek 4 will likely take all the 3d screens. What are the chances there will even still be first-run theaters playing it by then? Unless it's a *huge* hit, but I just don't see this one having ridiculous legs like that. Even Avatar is a good month away from its 3-month point, and it's about the best case scenario of b.o. legs you will find these days.
Second, it is opening March 5, which means three months later will be the first weekend of June. Even ignoring the other March and April releases, by that point the following big movies will have been released: Iron Man 2, Robin Hood, Shrek 4, Prince of Persia, and Sex and the City 2. Shrek 4 will likely take all the 3d screens. What are the chances there will even still be first-run theaters playing it by then? Unless it's a *huge* hit, but I just don't see this one having ridiculous legs like that. Even Avatar is a good month away from its 3-month point, and it's about the best case scenario of b.o. legs you will find these days.
02-12-10, 12:25 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Most people have no idea when DVDs are coming out, and only become aware when they get that weekend's Best Buy ad or actually see it in the store. The people who are aware don't affect the box office much at all. Theater owners are whining for no reason.
I've always thought the movie should be available to purchase in the lobby after the film. Similar to CDs are concerts or theater shows. That's when I would be most likely to make a purchase if I wasn't paying attention to release schedules.
I've always thought the movie should be available to purchase in the lobby after the film. Similar to CDs are concerts or theater shows. That's when I would be most likely to make a purchase if I wasn't paying attention to release schedules.
02-12-10, 12:28 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Most people have no idea when DVDs are coming out, and only become aware when they get that weekend's Best Buy ad or actually see it in the store. The people who are aware don't affect the box office much at all. Theater owners are whining for no reason.
I've always thought the movie should be available to purchase in the lobby after the film. Similar to CDs are concerts or theater shows. That's when I would be most likely to make a purchase if I wasn't paying attention to release schedules.
I've always thought the movie should be available to purchase in the lobby after the film. Similar to CDs are concerts or theater shows. That's when I would be most likely to make a purchase if I wasn't paying attention to release schedules.
). *Chris
* - again that 90% is a conservative figure.
02-12-10, 12:44 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Most people have no idea when DVDs are coming out, and only become aware when they get that weekend's Best Buy ad or actually see it in the store. The people who are aware don't affect the box office much at all. Theater owners are whining for no reason.
I've always thought the movie should be available to purchase in the lobby after the film. Similar to CDs are concerts or theater shows. That's when I would be most likely to make a purchase if I wasn't paying attention to release schedules.
I've always thought the movie should be available to purchase in the lobby after the film. Similar to CDs are concerts or theater shows. That's when I would be most likely to make a purchase if I wasn't paying attention to release schedules.
I'd also love to be able to pickup certain movies on DVD in the theater. I very likely would have purchased a Star Trek DVD in the lobby after seeing it in the theater last year.
02-12-10, 12:50 PM
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02-12-10, 12:54 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Just doing some averages, let's look at Star Trek first.
$254 million in its first three months at the box office. Went from a screen count of 3,800+ to 300+. Average price per ticket during this time frame, $13 (includes IMAX). 19.5 million tickets sold.
$3 million in its remaining ten weeks at the box office. Went from a screen count of 300+ to 89. Average price per ticket, $2. 1.5 million tickets sold.
While it's a small chunk of change that Paramount might not have needed, 1.5 million people saw Star Trek that might not have in the regular cinema. Or most were repeat watchers. Hard to say.
Now let's look at Up.
$289 million in its first three months. Went from a screen count of 3,700+ to 200+. Average price per ticket, $13 (includes 3-D). 22.2 million tickets sold.
$4 million in its remaining twelve weeks. Went from a screen count of 200+ to 100. Average price per ticket, $2. 2 million tickets sold.
Yeah, again, $4 million is chump change for Disney; but it's 2 million people who might've not seen the film previously. People who may have bought the DVD or BD when it came out rather than have rented it from say a Redbox.
Hard to say. For films that tank at the box office, I welcome the shorter windows with welcome arms. Others, depends on the title.
$254 million in its first three months at the box office. Went from a screen count of 3,800+ to 300+. Average price per ticket during this time frame, $13 (includes IMAX). 19.5 million tickets sold.
$3 million in its remaining ten weeks at the box office. Went from a screen count of 300+ to 89. Average price per ticket, $2. 1.5 million tickets sold.
While it's a small chunk of change that Paramount might not have needed, 1.5 million people saw Star Trek that might not have in the regular cinema. Or most were repeat watchers. Hard to say.
Now let's look at Up.
$289 million in its first three months. Went from a screen count of 3,700+ to 200+. Average price per ticket, $13 (includes 3-D). 22.2 million tickets sold.
$4 million in its remaining twelve weeks. Went from a screen count of 200+ to 100. Average price per ticket, $2. 2 million tickets sold.
Yeah, again, $4 million is chump change for Disney; but it's 2 million people who might've not seen the film previously. People who may have bought the DVD or BD when it came out rather than have rented it from say a Redbox.
Hard to say. For films that tank at the box office, I welcome the shorter windows with welcome arms. Others, depends on the title.
If anything, you have only proven that the threat from the exhibitor in Knoxville is rather hollow. If he runs a bargain theater chain, he would be a fool to yank the film, since it would only just have arrived on his screens. If, on the other hand, he runs a first-run chain, then the film will likely be leaving his venue at about the time he is threatening to yank it, anyway.
02-12-10, 12:55 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
02-12-10, 01:03 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
I do see a couple of potential problems with your calculations. First, I don't know about where you live, but around here, the average price for bargain theater tickets is actually $3. And second, you are presuming that no bargain theater would elect to show the film once it has been released on DVD. That is not the case, at least from my personal experience. I have observed many popular films that were still playing at our local bargain theaters weeks after their DVD release.
If anything, you have only proven that the threat from the exhibitor in Knoxville is rather hollow. If he runs a bargain theater chain, he would be a fool to yank the film, since it would only just have arrived on his screens. If, on the other hand, he runs a first-run chain, then the film will likely be leaving his venue at about the time he is threatening to yank it, anyway.
If anything, you have only proven that the threat from the exhibitor in Knoxville is rather hollow. If he runs a bargain theater chain, he would be a fool to yank the film, since it would only just have arrived on his screens. If, on the other hand, he runs a first-run chain, then the film will likely be leaving his venue at about the time he is threatening to yank it, anyway.
Star Trek had a 21-week theatrical release and was out of theaters by late-September/beginning-October. The DVD/BD didn't hit until weeks later in November.
Up had a 23-week theatrical release and was out of theaters a few weeks prior to its DVD/BD release.
There have been films like G.I. Joe that have had a 13-week theatrical release that ended up running into (and overlapping) its DVD/BD release. [For example, G.I. Joe didn't hit the dollar theater here until two weeks prior it it's DVD/BD release and ran for about a week after.]
02-15-10, 08:18 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
I agree, once a movie is out people usually got see it immediately within the first couple of weekends of its release. I don't think theaters should boycott the entire movie because that isn't fair to the fans. Maybe this way instead of having half empty theaters for the span of the film's theater life, the shows will be full and sold out.
02-17-10, 06:07 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Interesting point riley_dude, but I don't know. There is just something about going to a theater to see a movie that can not be replaced by watching it at home. The huge screens, the IMAX surround sound...just the excitement of going to see a movie when it comes out opening weekend. I also don't know if I want to purchase every single movie I see, you know?
02-17-10, 08:08 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
The article makes it seem like 3 months is some new fangled thing, but many August summer releases sneak out before Christmas. As it states, G.I. Joe was a recent example. And other movies have had similarly short turnarounds. It's not typical, but it's not like this one movie is the end of the world.
02-17-10, 09:35 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Movie theaters should start selling DVDs and Blu-rays.
Make deals with studios to get new releases ahead of other retailers.
Promote this to consumers by giving a discount to those who saw a particular movie in the theater and who bring in their ticket stubs (or CC receipt) for that particular movie.
Make deals with studios to get new releases ahead of other retailers.
Promote this to consumers by giving a discount to those who saw a particular movie in the theater and who bring in their ticket stubs (or CC receipt) for that particular movie.
02-17-10, 11:26 PM
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Re: Disney's plan to release 'Alice' on DVD early upsets theaters
Selling the DVD in the theater would kill a good amount of theatrical business. If someone liked the movie enough that they would get the DVD, it makes it much less likely they'll see it in the theater again. For example, I saw 2012 twice in the theater. I will buy the DVD when it comes out. If they were selling it when I first saw it & I bought it, I wouldn't have seen it again in the theater. So the studio/theater just lost $8 I would have spent on seeing it again in the theater.
Besides the person that saw the movie in the theater not seeing it again, there are also all his/her friends that will now not see it in the theater since they will borrow/come over to watch the movie at home instead of going out to the theater. Lets use Shutter Island for example. I go and see it and get the DVD. So the studio/theater gets $28 ($8 ticket & $20 DVD) from me. Normally amoung my frinds, I have about 6 people that would go see it at least once in the theater. $48 worth of tickets. But since I own the DVD, those 6 frinds come over to my house and watch it or borrow my DVD to watch at home. The studio/theater gets $0 from them. Now multiply the loss of my friends' $$ by millions of other people that do the exact same thing. Big time loss.
Besides the person that saw the movie in the theater not seeing it again, there are also all his/her friends that will now not see it in the theater since they will borrow/come over to watch the movie at home instead of going out to the theater. Lets use Shutter Island for example. I go and see it and get the DVD. So the studio/theater gets $28 ($8 ticket & $20 DVD) from me. Normally amoung my frinds, I have about 6 people that would go see it at least once in the theater. $48 worth of tickets. But since I own the DVD, those 6 frinds come over to my house and watch it or borrow my DVD to watch at home. The studio/theater gets $0 from them. Now multiply the loss of my friends' $$ by millions of other people that do the exact same thing. Big time loss.