It’s becoming increasingly clear that Disney’s March 5 release of “Alice in Wonderland” may have helped trigger a dramatic tipping point in film history. The movie’s 3-D ticket sales have been astounding, which has helped spur even more momentum for Hollywood’s rush to turn nearly every movie imaginable into a 3-D release. The film provided a much-needed hit for Disney, even though the executives who put it into production -- Dick Cook and Oren Aviv -- weren’t around to enjoy its success, having lost their jobs long before the film arrived in theaters.
But here’s what will reserve “Alice” a place in the movie history books: It finally put the nail in the coffin of movie theater owners’ mindlessly stubborn resistance to shorter DVD windows.
For years, exhibitors have loudly complained that a shorter time frame between a film’s release date and its arrival on DVD would basically be the end of the world as we know it, somehow encouraging untold millions of moviegoers to stay at home and wait for the DVD.
Though it was by accident, not design, “Alice” was the perfect test case to prove exhibitors wrong. After Disney announced it would bring the movie out on DVD within three months of its theatrical release (instead of the customary four-month window), exhibitors all across Europe threatened to keep the picture off their screens. U.S. exhibitors were equally unhappy, muttering darkly that the shortened window would put a crimp in the film’s grosses.
Disney and the European exhibitors finally worked out a deal but not until the controversy had received saturation media coverage enough that even the most casual moviegoer knew “Alice” would be arriving on DVD a month earlier than usual.
The result? “Alice” had the biggest nonsequel opening weekend of all time, grossing $116.1 million in the U.S., with its worldwide box office now standing at an impressive $366.2 million. So even though everyone in the world knew it was coming out 12 or so weeks later on DVD, they went to the theater anyway. As one studio chief said to me the other day, barely suppressing a chortle: “Case closed.”
In truth, the case isn’t exactly closed. But the weight of anecdotal evidence now clearly supports the studio’s case. If a movie is good enough, people will go see it, no matter when it’s due out on DVD. The bigger question is: What will the studios do next?
From the studio point of view, it simply doesn’t make sense to wait 16 weeks or more to release a film on DVD when the average film does 80% of its business in its first three weeks in the theaters. Except for a phenomenon like “Avatar” or a mega-crowd pleaser like “The Hangover,” most studio films have completely played out in six or at most eight weeks. So why not take better advantage of the millions of marketing dollars you’ve spent raising audience awareness in a film by moving up the DVD release far enough to essentially sell two tickets on the same ad campaign -- one for the theatrical release and one for the DVD?
It’s telling that Disney is the studio that has most aggressively pursued the DVD window issue. Unlike the other major studios, which are still helmed by executives with a background in movies, Disney is run by Bob Iger and Rich Ross, whose formative years were spent in TV, where they were used to quick results. They also have few emotional ties to the film business, so as they go about reinventing Disney as a media brand assembly line, they’re more likely to experiment with different release windows.
But Disney’s lack of loyalty to exhibitors has its price. With 3-D screens still in short supply, Disney is going to lose a lot of “Alice” playdates this weekend with the arrival of DreamWorks’ “How to Train Your Dragon,” even though “Alice” is still the top-grossing movie in the country. But figuring that “Dragon” audiences will fill up their 3-D screens, exhibitors can stick it to Disney for shortening their window on “Alice” by taking away a host of screens.
So despite the kick-start from “Alice,” the process of change in DVD windows is going to look a lot more like an evolution than a revolution, largely because the executives who run studios are still cautiously feeling their way forward, especially knowing that they are still beholden to theater owners who remain resistant to change.
It’s pretty easy to visualize the kind of bold experiment that should have happened by now. If you’re releasing a film that’s just a routine programmer, one that isn’t reliant on special effects for its appeal (which people would feel the need to see on a big screen), why not try a day-and-date release, taking advantage of the millions of movie lovers who’ve put some big dough into their home entertainment centers?
If you have a film like “Shutter Island,” “Cop Out” or “The Bounty Hunter,” that could just as easily be enjoyed at home as in the theaters, why not charge fans a premium -- say $22.95 -- to see it on video on demand at the same time as it plays in the theaters?
It makes total economic sense, instantly providing two revenue streams that can take advantage of the same marketing campaign, while attracting a scrum of fans who wouldn’t have gone to the trouble to see the film in a theater but would be willing to pay a premium to see it in the comfort of their living rooms.
This parallel form of movie distribution would’ve happened already if it wasn’t for the resistance of exhibitors, who have long said they’d refuse to book any movie that is available anywhere else while it’s opening in theaters. (That’s why Summit could barely do a theatrical re-release of its Oscar-winning “The Hurt Locker” -- theater owners wouldn’t book a movie that had already been out on DVD.)
So why not make the exhibitors partners? If they are willing to risk a box-office shortfall, then promise them a cut of the VOD revenue. Or a better split from the theatrical take. After all, DreamWorks has already made Wal-Mart its merchandising partner for the release of “How to Train Your Dragon,” giving Wal-Mart the exclusive on nearly all licensed “Dragon” products in return for the giant retailer making a huge promotional commitment to the film.
Why couldn’t studios create a similar partnership with a theater chain, giving them an incentive to see if a day-and-date experiment could build a bigger audience for a new film without cannibalizing the theater’s audience?
It’s something consumers would embrace, because they are already in the habit of consuming most of their favorite music and TV shows on a variety of media platforms.
There’s a lesson here, one that the movie business should have already learned from the collapse of the record industry: If you let your business model lag too far behind the habits of your most loyal consumers, you’ll soon discover that you don’t have a business anymore.