Hollywood movies studios are rumored to be in dark back rooms discussing a rental plan, despite noted objections by cinematic theaters. Basically, the rental plan would offer full versions of films just weeks after they are released in theaters. As you can imagine, that would likely cut into the profits of theaters significantly. In fact, the move would completely revolutionize the film and movie experience moving forward.
Two of the strongest proponents of this new plan is Universal Pictures and Warner Bros., who have made it lucidly clear that they are planning forge on in their current talks with Comcast Corporation and Apple, Inc. The push by studios to offer rentals for new releases have the potential completely freeze out the theater chains. Even with a two-week cushion, it is likely that a lot of moviegoers will simply wait until the movie is available for a rental instead of going to the movie.
It is possible that movie chains could be hurting themselves by not participating in the talks. Without contributing to the conversation, the theaters are surrendering their right to contribute their input as for as the pricing and the timing of the rentals. If the rentals are priced too low, the incentive for viewers to wait on the rentals will be hard to resist.
Currently, the talks are bogged down due to the inability of both sides to come to an agreement that would prove mutually beneficial while creating a movie-download product that would range from $30 to $50.
All of this energy that is being invested in creating this new product is due to the fact that there is a rapid decline in DVD sales as a direct result of the revolutionary methods in which Netflix is delivering its product to viewers. Things will likely only get worse as Amazona and YouTube have also created live streaming television programming for viewers. All of the leading film studios in Hollywood, with the exception of Walt Disney Co., are extremely eager to develop a product that can be introduced to the public as soon as possible so that they will be able to recoup some of the money that is being hemorrhaged through the gaping whole that Netflix has placed right dead center of the industry.
The reason that Disney is probably not too interested is that is primary products and marketing have allowed it to fare well in the Netflix era, despite having pulled out of its deal with the streaming giant – leaving meaning to postulate that Disney may be contemplating creating its own streaming platform, which could completely shift the power structure in Hollywood.
The current discussion involves all of the theaters sharing in the revenue generated by these rentals, which will be some type of premium PVOD or on-demand rentals that viewers. If the cinema chains, at some point, fall in line, they will also be able to share in the revenue, but that has yet to be seen. The exhibitors like Apple and Comcast are currently looking for a 10-year commitment on the revenue split and the studios are not having it. There is still a lot of headway to be made before this becomes a reality, but both sides seem intent on making it happen.
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