Cinemark USA Inc., the nation's third-largest movie theater chain, is threatening not to play the upcoming Eddie Murphy-Ben Stiller comedy "Tower Heist" in any of its 300 locations if Universal Pictures goes ahead with its plan to offer the film on premium video on demand just three weeks after it premieres in theaters.
The bold move would deprive Cinemark of a substantial share of what's sure to be tens of millions of dollars, and potentially more than $100 million, in box-office receipts. It also calls into question whether the studio will go ahead with the plan and also risk losing millions.
On Wednesday, news broke that Universal will make "Tower Heist," which opens in theaters Nov. 4, available to about 500,000 homes in two markets, Atlanta and Portland, Ore., for $59.99 via video on demand. The test would be the biggest step forward that any Hollywood studio has taken in the controversial premium video-on-demand business.
People close to Universal said that top executives informed Cinemark and other theater circuits of its VOD strategy this week after more than a year of discussions on the topic. It appears that Universal Chairman Adam Fogelson and his team had hoped that exhibitors would feel included in the process and decide that their business was not threatened because of the limited nature of the "Tower Heist" test.
But Cinemark, which operates about 3,800 screens in the U.S., is sticking with its fierce opposition to the premium VOD business. It and the country's two larger exhibitors, AMC Entertainment Inc. and Regal Entertainment Group, last spring waged a public battle against a premium VOD test by four studios, including Universal, that made movies available — for $29.99 — 60 days after they opened in theaters.
Those chains believe that making movies available to watch at home sooner than 90 days after premiering encourages consumers to stay at home instead of buying tickets.
"Cinemark recognizes and acknowledges the changing technological landscape and related challenges that Universal and the other studios are facing in the in-home window," the company said in a statement. But that recognition apparently was not enough to support the test.
"Cinemark has urged Universal Pictures to reconsider its market test of this product," the statement continued. "If Universal Pictures moves forward with its 'Tower Heist' premium video-on-demand offering as announced, Cinemark has determined, in its best business interests, that it will decline to exhibit this film in its theatres."
A Universal spokeswoman declined to comment. AMC and Regal have yet to disclose their reactions to the "Tower Heist" VOD plan.