Yesterday, it looked like
But if Netflix wondered why no one thought to do this before, today they're finding out. The nation's biggest theater chains, Regal, AMC and Cinemark have shot back announcing they won't be showing the movie on their Imax screens.
That throws a serious wrench in Netflix's plan and frankly, one the company should have seen coming. Everyone in Hollywood knows the current windowing system is broken. Theater visits have become a luxury. People would potentially pay more for the privilege of seeing a first-run movie at home. And the time between when a film leaves theaters and arrives in homes in now basically the piracy window.
Collapsing those windows makes a lot of sense for studios. Charge more early on for at-home viewing and capture the dollars from people who don't want to go to theaters. Close the piracy gap and then still reel in the benefits of cheaper on-demand deals.
But of course that doesn't make any sense for theaters. Theater owners take about half of the ticket price but really make their money on concessions, things like popcorn and soda. If a butt isn't in a seat, there's no sale. Which is why theater owners have always pushed back against the idea of what's known in Hollywood as "day and date" -- releasing a movie on home video and in theaters on the same day.
Recently, there has been some small movement on this front. Snowpiercer, a sci-fi film about a class-divided train running endlessly through a frozen future world, starred Chris Evans (who played Captain America in the Marvel movies) and Tilda Swinton. It only ever showed in eight theaters but it was available on video-on-demand at the same time. The film has earned $4 million at U.S. theaters and more than $6.5 million on home video. Radius and The Weinstein Company saved big on print and advertising fees and got to collect a bigger portion of the at-home revenue.
But theater owners are letting films like Snowpiercer slide because they don't have a lot of faith in their ability to bring people into the theater anyway. As my colleague Scott Mendelson pointed out, movies like the upcoming Serena starring two of the most-bankable stars on the planet (Jennifer Lawrence and Bradley Cooper) are going right to home video because the theaters don't really want them that much.
But a sequel to Crouching Tiger Hidden Dragon is another matter. The original was an indie hit earning $213 million on a $17 million budget. Plenty of people would want to see a sequel in theaters. The original, with its air-borne flights and lush vistas, was the kind of film you want to see in theaters.
By saying the film will be Imax or home - Netflix basically cut out any chance for the theater owners to get on board. There are only so many Imax screens and they only attract people who are willing to pay top-dollar. Everyone else will be pushed to watch it at home, almost completely cutting the theater owners out of the equation.
This is unlikely to turn out to be a Qwikster-level blunder for Netflix. But it is a misstep. The company clearly should have gotten the theater owners on board before making this move. Now they're pitted in a battle where they have very little leverage. It's not like it hurts the theater owners if Netflix suddenly stops buying movie rights from this studio or the other. Everyone in Hollywood will be watching to see how this plays out.
