The film industries in Hollywood and Oz wrestle with a debate over release windows.
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4 Apr 2011 - 10:35 AM  UPDATED 6 Nov 2012 - 5:30 AM

Suppose you missed seeing a movie in the cinemas: How long should you have to wait before it's available on DVD and on video-on-demand platforms?

The issue of release windows is being fiercely debated among US film distributors, cinemas, DVD distributors and retailers and cable companies. That question is also being discussed among the Australian entertainment industry but the topic is so sensitive that few executives were willing to go on the record with their views when approached by SBS Film.

The gap, or window, between theatrical release and DVD and pay-per-view has shrunk dramatically in the US and to a lesser extent in Australia, alarming exhibitors who fear box-office returns will suffer.

The issue flared again in the US last week with news that Warner Bros., Fox, Sony and Universal plan to enable consumers to watch some films 60 days after their cinema debut on a new Premium Video-on-Demand service on DirecTV and Comcast, charging a rental fee of $US30 per title. The initial offerings reportedly will include Just Go With It, Cedar Rapids and Unknown (pictured), starting late this month.

That initiative was immediately condemned by the National Association of Theatre Owners which warned it would “fundamentally alter the economic relationship between exhibitors, filmmakers and producers, and the studios taking part in this misguided venture.” Ominously, NATO said it expects cinema owners to “re-evaluate” their relationships with the four studios, raising the prospect of a boycott.

Bill Mechanic, a former head of Fox Filmed Entertainment, fears the new window will hurt movies that open respectably then depend on word-of-mouth to build. “Two current movies, The Lincoln Lawyer and Limitless, have shown surprising resilience,” Mechanic, now an indie producer, told Bloomberg TV. “If consumers know they don't have to wait long to see those films, will they bother going to theatres for anything other than VFX-filled 3D tent poles?”

In Australia, films are typically available on Foxtel's On Demand service 30-45 days after DVD release. But the pay-TV platform increasingly is offering titles including The Town, Going the Distance, The Sorcerer's Apprentice and Get Him to the Greek the same day as they go out on DVD. Foxtel also supplies movies on pay-per-view direct to customers' TV sets via Microsoft's Xbox 360.

Foxtel chief executive Kim Williams won't reveal any figures but told SBS that “all On Demand products are performing well and very much in accordance with our expectations.”

Michael Hawkins, executive director of the newly-formed Cinema Operators Association of Australia, has expressed concern at the expedited releases. “The contraction of windows and the evolution of new platforms will continue to challenge all segments of our industry,” said Hawkins, whose organisation represents the major chains and some independents and aims to provide a national voice for exhibitors.

“No one wants to kill the goose that lays the golden eggs – first-run theatrical release,” says Robert Slaviero, chief executive of Hoyts Distribution. Nonetheless Slaviero has decided to reduce the current 60-day gap between DVD and PPV release and is looking at a window of between 30 and 45 days.

In the US, the Hollywood studios are keen to exploit the emerging digital platforms to replace collapsing DVD revenues and to combat piracy. Slaviero points out the Australian DVD industry is still very healthy – retail revenues totalled $1.3 billion last year, bigger than the B.O. haul of $1.12 billion – although back-catalogue product is suffering.

Last month Warner Bros. was the first studio to embrace Facebook as a distribution platform in the US, streaming The Dark Knight on the social media network for a rental fee of 30 Facebook credits or $3. Last week Warner announced that Inception, Life As We Know It, Harry Potter and the Philosopher's Stone and Harry Potter and the Chamber of Secrets were being added to that service.

Neither Facebook nor the distributor has revealed any timing for when WB titles may be available in Australia but if the initiative succeeds in the US, it would be surprising if Oz didn't follow suit.

Similarly, if the Premium Video-on-Demand service takes off in the US, Australia would be an obvious market to tap – but we may have to wait until the National Broadband Network rolls out, when it will be super-fast to download movies.