breaking windows why traditional theatrical release windows need to be broken 1
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Breaking Windows: Why traditional theatrical release windows need to be broken.

Breaking Windows: Why traditional theatrical release windows need to be broken.


Mick Southworth and Martin McCabe explain why traditional theatrical release windows need to be broken.

There is a transparent and generally accepted agreement between most sensible manufacturers, wholesalers and retail outlets that should any product fail to sell sufficiently well to the target market—despite any market research, huge marketing campaign and gap in the market—then that product is offered at a knock-down discount price. Seeing as any business folk worth their salt need to get their capital investment back, this would seem to be an obvious move. Well, not in the wacky world of cinema distribution it isn’t…

Traditionally, release windows—the holdback period that a distributor has to adhere to when exploiting their commercial rights through other media platforms after theatrical release—have been limited to such platforms as home entertainment, pay and free TV. The digital revolution, however, has seen these expanded to include numerous other home and mobile platforms including extant cable and satellite delivery systems, as well as such on-demand services as iTunes, Xbox, Netflix, Blinkbox, LoveFilm and VoD, SVoD, AVoD, FVoD, etc. But, whatever the platform, the cinema exhibitors will gladly kill you if you even attempt to break these windows.

In fairness, they were probably rightly put into place when broadcast television and the burgeoning video rental market were the main drivers of ancillary revenues, at a time when films had the opportunity to play on at the cinema, free from the bottleneck release schedules and self-cannibalism of a regular 15 films per Friday stealing all the oxygen. Back then, a successful picture like The Towering Inferno or Jaws could play uninterrupted to widespread audiences for weeks or months on end, before appearing on television following an FDA-mandated seven years after first theatrical release (subsequently reduced to five and then two years). Come the late 1970s, however, the video rental market began to gain consumer traction, and an additional video rental window of nine to 12 months from first release was instigated.

Just over half a decade later, the emergence of sell- through VHS saw that window brought down to six months, which was where it largely remained until the DVD boom of the late 90s saw it reduced to a more typical four months. With this rapid growth in consumer appetites for packaged film content, the stridently successful video and TV platforms often effectively supported the distributors’ financial margins if films unfortunately lost their shirts at the box office. And yes, it is true that these windows were initially designed through mutual cooperation and near parable benefit to protect the integrity and importance of the initial theatrical release. But that was then, and this is now.

Currently, there are many industry players that desperately want to see the old holdback restrictions lifted to engage with the new reality of the dilution of revenues across the multi-platform environment of the modern distribution landscape. The expansion of digital distribution systems, allied with new ‘second’ and even ‘third’ screen consumer technologies has led to an explosive demand for filmed entertainment and increasing competition amongst digital retailers to acquire and sell this high-quality content to a growing market of consumers, who no longer necessarily recognise the primacy of theatrical engagement within this transaction.

In recent years, the successful simultaneous multi-platform US releases of both Margin Call and Arbitrage were cited as a compelling argument in favour of increased flexibility in release windows. Not only did both films enjoy increased profitability, but were heralded as outliers for a coming renaissance of increased digital distribution opportunities. But have these ‘landmark’ examples led to any real movement in exhibition patterns? Well, since then very little seems to have changed. A few innovative distributors such as Magnolia and Radius Pictures have continued to experiment with release patterns with some success. Crowd-sourcing platforms such as Tugg and Gathr have begun to effectively utilise social media to put bums on seats, by aligning content with interested audiences in a more precise and targeted way.

Some American majors experiment by releasing rental titles on Facebook, and have also offered customers the chance to watch a small range of selected digital HD movie — including the likes of Prometheus—a month before BD/DVD debuts. Although these changes may be small, exhibitors are (understandably) feeling threatened; Universal’s attempt to release Tower Heist on VoD just three weeks after its theatrical premiere, for example, was shot down. Ultimately, however, the industry has to find ways of getting people to pay for digital.

And while no one can argue that the traditional release window format has been a valuable model for exhibitors and studios alike, the rationale behind this model is rapidly diminishing. The main catalyst for this need for change is the rise in Internet viewing, which canniballises audiences from impatient consumers that would otherwise pay for content.


Margin Call (above) was considered a potential game-changer when it was simultaneously released across numerous platforms, but in reality nothing much has changed.

Online piracy threatens to consume our ancillary markets and capital returns; despite the collective defences of the major studios, diligent search engine providers and determined anti-piracy law enforcers, illegal downloading is on the rise. The number of illegally downloaded films in the UK has increased by 30 per cent in the last five years, according to Internet consultancy Envisional. It reports that the top five box-office movies were illegally downloaded 1.4m times in the UK in 2012, and the top five TV shows—including Game of Thrones and Breaking Bad—were pirated 1.44m times; an increase of 33 per cent from 2009. In the face of these horrifying figures, our decision makers seem almost paralysed with fear at the hought of trying to force through sensible change for the collective industry good. Of course, we understand why cinema operators would fight tooth and nail to protect their ground. Why wouldn’t they?

Theatrical exclusivity is possibly the last (thin) wall between them and the avalanche of new technology, home cinema and delivery vehicles that will undermine the ticket price value. That’s all well and good for the exhibitors, but where does that leave the rest of us—the financiers, producers and distributors, etc. dependent on a successful revenue flow to make a living? Cinema owners standing their ground won’t make the problem go away; indeed, the only people who will ever see real value if the current draconian stranglehold continues are the burglars of our intellectual property.

Even those venerable progenitors of the modern blockbuster, Steven Spielberg and George Lucas, included this very subject in their recent State of Cinema speech to USC students. Lambasting modern release strategies and the studios’ increasing reliance on tentpole product, they predicted an industry ‘implosion’ where, following the failure of a number of high-budget releases, they could envision a future in which ticket prices would be more akin to a Broadway theatre experience for a limited number of studio products at a limited number of luxury theatres. (“You’re going to have to pay $25 for the next Iron Man,” commented Spielberg, perhaps unaware that this is cheaper than the current cost of a cinema ticket in London’s West End.) In this scenario, the smaller films would be left to fight for themselves between second-tier cinemas and cable TV. That may be an unfair précis of an attenuated argument, but the point is much the same; the industry must evolve, or we could be impacted in a far more devastating way than the music industry was a decade ago.

In the UK, the only current way of enjoying the freedom to exploit your owned rights simultaneously across multiple platforms is if a distributor, by pre-arrangement, hires the cinemas in the clear understanding that they intend to ‘break’ the holdbacks to maximise revenues with a day-and-date release. Unless the film is something that the cinemas absolutely want for cultural reasons, and accept that they are just a part of the food chain, then very little cash—if any—will make it back to the distribution company daring to go this outrageous route.

In a brave release strategy, Ben Wheatley’s A Field in England (below) hit cinemas, DVD, free TV and VoD simultaneously in the UK in July. Film4, Picturehouse Entertainment, 4DVD and the BFI Distribution Fund are all working together on this simultaneous release model, the first of its kind for a film in this country. Might this presage a new model of exploitation for independent film? We can only watch and wait but whatever the results, good or bad, this need for change cannot be denied. Exhibitors simply need to be more flexible. Blockbuster releases may well continue to enjoy a longer theatrical window—akin to the aforementioned roadshow or platform releases of the past—but independent and mid-market films absolutely need a quicker transition to secondary markets if they are to survive.



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