‘Tower Heist’ to be released on video while in theaters
In an audacious move that could shake up the way Hollywood does business, Universal Pictures plans to make its upcoming Eddie Murphy action-comedy film available through video on demand only three weeks after it premieres in theaters.
Even more brazen, though, is the price to watch “Tower Heist” at home in two test markets: $59.99, a cost many consumers will surely balk at in the current economic slump.
Universal’s plan for the picture, which launches Nov. 4, will mark the first time a major studio movie will be available to watch in homes while it is still playing in thousands of theaters.
Universal will offer the movie to about 500,000 digital cable subscribers of its corporate parent, Comcast Corp., in Atlanta and Portland, Ore., according to a person with knowledge of the release strategy who was not authorized to discuss it publicly.
Spokeswomen for Universal and Comcast declined to comment.
If enough people take advantage of Universal’s offer without a significant drop in box-office receipts, other studios could adopt similar strategies. Such a development would end the industry’s long tradition of imposing a multi-month delay between when a movie is shown in theaters and when it is accessible on television screens.
Studios are looking to such experiments as a way to update their longtime business models and generate additional revenue that can help compensate for plunging DVD sales, which have been undermining movie economics over the last several years.
The “Tower Heist” gambit is likely to infuriate theater owners, who were informed of the plan this week by Universal executives after more than a year of discussions. The cinema industry has reacted angrily to any attempt by the studios to shrink the traditional window of 90 days between the time a movie launches in theaters and when it is available to view at home.
Executives at the nation’s three largest theater chains, AMC Entertainment, Regal Entertainment and Cinemark, were outraged in the spring when four studios, including Universal, worked with satellite television distributor DirecTV on a test that made certain movies available for $29.99 via video on demand 60 days after they premiered in theaters.
Many studio executives considered that test a bust because minimal promotion and relatively unpopular films such as “Sucker Punch” and “Paul” resulted in tepid consumer response and little data to evaluate.
Spokespeople for the three theater companies either did not return calls or declined to comment, as did a spokesman for the National Assn. of Theater Owners.
“Tower Heist,” which also stars Ben Stiller and Matthew Broderick, is one of the highest-profile releases of the fall. With the picture still in theaters, it will benefit from word of mouth if it’s a hit, along with a theatrical marketing campaign still fresh in people’s minds that will be supplemented with advertising in Atlanta and Portland to promote the video-on-demand test.
Though the test is unlikely to be widely popular, Universal is betting it will appeal to certain families and groups of friends who are eager to see “Tower Heist” but don’t want to go to a theater and pay for multiple tickets, popcorn and drinks.
That’s precisely what theater operators fear, at a time when attendance is already down. They have argued that such so-called premium video on demand will shift consumer behavior, encouraging people to wait to watch a movie at home rather than seeing it in theaters a few weeks earlier.
Universal is assuring exhibitors that they will be compensated if “Tower Heist” ticket sales are lower than expected during the test. Whether studio and exhibition executives can agree on what box-office grosses would have been, however, remains to be seen.
If cinema owners are angry enough about the strategy, they could threaten to not show “Tower Heist” in the two test markets when the movie debuts on video on demand — or potentially not show it at all. Such a response, if shared by most exhibitors, could force Universal to alter its plan.
The studios are unlikely to abandon their goal of establishing a premium video-on-demand business, however, and similar offerings are likely, with or without theaters’ cooperation.
Universal and Comcast selected Atlanta and Portland for the test because they wanted mid-size markets with a certain number of digital cable subscribers and moviegoing patterns similar to other cities where premium video on demand won’t be available. The companies believe that will make it easier to compare results.
The “Tower Heist” plan marks the most significant collaboration to date between Universal and its corporate parent since Comcast acquired media conglomerate NBCUniversal early this year.
It represents a bold but risky step by Universal Pictures Chairman Adam Fogelson, NBCUniversal Chief Executive Steve Burke and Comcast Chief Executive Brian Roberts to position their company at the forefront of one of the most controversial issues in the entertainment business.
To fend off potential complaints that it is favoring its owner, Universal will offer other cable and Internet companies the chance to release “Tower Heist” via video on demand at the same time and on the same terms as Comcast.
