United States: How Streaming Is Reinventing Hollywood's Theatrical Distribution Model

Last Updated: August 6 2015
Article by Jody Simon

Hollywood is trying to change the way theatrical exhibitors do business.

In light of the success that television producers have achieved in innovative release strategies on distribution platforms like Netflix, Amazon Prime, Hulu and HBO Now, feature film studios have also begun to recognize the need to adapt to the new digital distribution paradigm or die. However, despite studios' best intentions to satisfy the consumer by constantly delivering fresh content on every available platform as soon as possible, theater owners have been loath to shorten their ever-shrinking window of profitability.

Traditionally, theatrical exhibitors have refused to budge from their model requiring studios to wait at least 90 days before a film can make its home entertainment debut. This model hasn't changed in decades despite shrinking ticket sales, the proliferation of home theatres, the rise of online viewing and rampant piracy.

In the past several years, a few studios have attempted to disrupt exhibitors' traditional business model by experimenting with day-and-date premieres. With day-and-date, a film is simultaneously available in theatres and on video-on-demand platforms. For example, Radius-TWC (a division of The Weinstein Company) successfully rolled out the U.S. debut of "Snowpiercer" as a day-and-date last year. Later in the year, when exhibitors dropped Seth Rogan and James Franco's "The Interview" like a hot potato for fear of a retaliatory hack, Sony – looking at a $95M plus write-down on the film – scrambled to secure a day-and-date release in specialty, independent theatres and on home entertainment platforms. The controversial comedy ultimately racked up more than $40 million in cable, satellite, telecom and online VOD sales in just three weeks while grossing $6 million theatrically. Next year, Netflix will premiere the sequel to "Crouching Tiger, Hidden Dragon" as a day-and-date release on select Imax screens and theaters in China at the same time it debuts on the streaming service worldwide in all territories it is available. These day-and-date efforts may be the tip of the iceberg for the transformation of theatrical windowing strategy.

Exhibitors argue they aren't immune to change. In fact, exhibitors have spent years combating shrinking ticket sales by offering more robust concessions, enhanced picture experiences like 3D and IMAX, reserved seating, improved sound and reclining seats. If studios shrink exhibitors' exclusive theatrical window, exhibitors argue it will be impossible to make money. This argument ignores the fact that most films finish their theatrical runs within one month of debuting. Three months after debuting, the film is out of sight, out of mind, and studios must expend new marketing dollars for home entertainment debuts. How can studios and exhibitors work together to find a solution to this problem?

Paramount recently announced a creative deal that benefits studios and exhibitors alike. AMC Theatres and Cineplex Entertainment have agreed to shrink the window between the theatrical release and home entertainment debut of two of Paramount's low-budget horror titles this fall, shortening the traditional 90-day home entertainment debut window to just 17 days after the number of screens upon which the film is screened drops below 300.

Paramount's unorthodox deal means that the clock for the films' home entertainment debut will start running when it leaves the theatres rather than when it enters. This represents a paradigm shift in theatrical distribution. o entice exhibitors to agree to this model, Paramount sweetened the deal by sharing a percentage of its digital revenue for the first three months from the initial U.S. theatrical release.

The deal has not met with universal acceptance, however. Shortly after it was announced, Regal Entertainment Group, the nation's largest chain, announced its intention to stick with the "traditional distribution model." This may be a rear-guard action, however, as the Paramount-AMC compromise has the potential to expand the pie for everyone. Genre horror films typically have a theatrical run less than three weeks. Exhibitors want a bite of the digital revenue apple, but don't want to hurt their own grosses by cannibalizing exclusive theatrical windows. Under this model, the exhibitor maintains a certain minimum gap between a film's theatrical run and VOD debut, so it can still entice consumers into theatres while sharing the benefits of a shortened theatrical window that drives digital distribution returns. This model represents a more accurate barometer of current consumer habits, allowing exhibitors to offer their loyal consumers an exclusive window in which to catch a movie, but also capitalizing on those consumers who prefer to watch at home or on their tablets.

This win-win model will be tested by the market in the very near future, and may represent the future of film distribution, especially on lower-budget movies with traditionally short theatrical runs.

Reprinted with permission from VideoInk.http://www.thevideoink.com/features/opinion/how-st...

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Jody Simon
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions