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Theaters rip film plan by Comcast

The cable operator seeks pay-per-view release of movies at time of theatrical debut.

May 12, 2007|Josh Friedman | Times Staff Writer

Comcast Corp.'s plan to show movies on its cable TV systems as soon as they open in theaters has exhibitors screaming "Cut!"

Two of the nation's biggest theater chains, Regal Entertainment Group and National Amusements Inc., said they would refuse to play films made available in the home simultaneously.

"We're not interested in playing anything that makes its debut in the home and at the theater at the same time," said Michael L. Campbell, chief executive of Knoxville, Tenn.-based Regal, the nation's largest chain with 6,400 screens.

Stephen Burke, Comcast's cable president and chief operating officer, told an audience at an industry conference this week that several studios were "very interested" in the idea of allowing cable providers to charge $29.95 to $49.95 to watch an opening-day movie at home. He said it would increase studio revenues rather than cannibalize them, if handled properly.

Until recently, debates about shrinking the four-month-long period between a film's theatrical and its home video release have focused mainly on the ill effects on the box office.

Aside from generating big box-office returns like the worldwide record $382-million opening weekend for Sony Pictures' "Spider-Man 3," theatrical releases create buzz and marketing awareness that pays off when a movie later comes to DVD and pay TV, exhibitors argue.

They say simultaneous releases would erode the "magic" of the moviegoing experience, making film and television programming look the same.

And by siphoning business from the box office, they say, simultaneous releases would limit consumer choice by jeopardizing neighborhood theaters' viability.

"It might be good for Comcast, but I don't believe it's good for anybody else," said Shari Redstone, president of No. 5 U.S. exhibitor National Amusements Inc. in Dedham, Mass. "Everything that chips away at our revenue chips away at our ability to preserve -- and improve -- the moviegoing experience."

Comcast has made several independent releases such as titles from IFC available on demand right away, but the idea of trying the same strategy with a blockbuster such as "Spider-Man 3" is what alarms exhibitors. The controversy comes as a summer lineup of franchise films is leading bullish analysts and theater owners to predict that U.S.-Canada box office this year could top $10 billion for the first time.

At the industry gathering, Burke anticipated the irate reaction of exhibitors, who consider the shrinking theatrical window of exclusivity one of the biggest threats to their health.

"I'm sure some movie theaters won't like the added competition," he said. "But at the end of the day, it's about giving consumers what they want. Anybody who doesn't do that is going to get left behind." Burke declined to comment further.

Publicly, most studios have stayed mum on Comcast's proposal. But Walt Disney Co. Chief Executive Robert Iger told analysts this week that the company was "not in discussions to sell movies to cable in the same window as theatrical."

Paramount Pictures is not discussing the idea with Comcast, a spokeswoman said. Universal Pictures, 20th Century Fox and Sony Pictures declined to comment.

Although it was unclear how a deal might be structured to avoid hurting a film's box-office receipts, those familiar with studio executives' thinking speculated that a new release could be made available to a limited number of customers, such as the first 1 million who sign up.

Under another scenario, a film might be shown on pay-per-view one week after its theatrical release, rather than right away.

In any deal, studios are expected to demand at least 50% of the receipts -- comparable to their take of the box office.

John Fithian, president of the National Assn. of Theatre Owners, scoffed at the "irony" of Burke citing consumer choice as an argument in favor of simultaneous releases, noting the cable industry's long resistance to "a la carte" pricing that would let customers choose their channels.

Fithian also disputed the theory that simultaneous releases would deliver more revenue to studios: "If Comcast is offering a movie for $30 and someone invites 10 friends over to watch it at a house party, you've potentially lost 10 cinema sales with one video-on-demand sale."

Simultaneous DVD and theatrical releases in recent years for smaller films such as 2006's "Bubble," directed by Steven Soderbergh, have been shunned by most exhibitors.

"I give the studios credit for being smart," Regal CEO Campbell said. "At the end of the day they'll do the right thing -- not for the benefit of exhibitors but because it's good for everyone."

josh.friedman@latimes.com

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