Apple is in talks with major movie studios that could change the way new films are distributed.
Blockbuster movies could be streaming into your living room in as little as two weeks after theatrical release for a premium.
Bloomberg Technology has reported that sources close to the issue are suggesting that Apple is applying pressure on major movie studios, including 21st Century Fox Inc., Warner Bros., and Universal Pictures, to allow digital distribution of films as little as two weeks after its release to theaters. Apple’s spokeswoman Christine Monaghan declined to comment however the industry is ready for a change.
Currently, Movie theaters typically have exclusive distribution rights for new films for 90 days or more after a movie is officially released. After that distributors can begin producing DVDs or allow digital distribution. Movie theater chains have fought hard to maintain this shrinking head start in some cases going as far as boycotting certain films. With theater chain viewership stagnant and shares trending downward they are losing the fight.
Movie theater chains understand that and companies such as Cinemark Holdings Inc., the third-largest U.S. exhibitor, are already in talks about more reasonable timeframes for in theater versus digital distribution. A two-week window could severely affect theater attendance after the initial exclusive distribution period. To counter trends like this, many chains are moving toward premium pricing services to get as much value from movie goers as possible. “VIP”, pre-assigned seating, and 3D surcharges are all being employed by theaters chains to varying success but none of these solve the problem of declining numbers for movie studios who are actively looking for new ways to distribute to consumers.
Warner Bros. chief Kevin Tsujihara said last week that earlier availability of new movies could satisfy a growing consumer appetite and deter piracy. Studios like Warner Bros. are suggesting premium pricing model for early release between $25-$50. While that may be less than what a family of four might spend on a night out at the movies it may still prove a price point too high to deter people pirating copies. Especially with current digital distribution models such as current online movie rentals and Netflix for less than $10.
This makes Apple an excellent option as a partner in this venture. Their online distribution platform, iTunes, encrypts files making them difficult to redistribute although not impossible. Other possibilities include Screening Room, a new home video service from Napster Founder Sean Parker which promises to protect files with watermark technology that will help track the source of leaks to deter pirates.
For consumers, this means that you could be able to watch the newest blockbusters from the comfort of your own couch within weeks of a big screen release without lines or pricing concessions. What is unclear is how it will affect your budget. Will theater chains continue to charge excessive premiums to make up the difference or will prices become more competitive? It is possible fans wanting to see Star Wars opening night may be paying more for the privilege than those who can wait.