Why do not the big releases ever hit Netflix or YouTube first? Why do the most anticipated movies first come to the movies? Why do they take so long to be released on DVD or Bluray? The distribution windows are to blame.
That a film does not compete against itself
The window system distribution was implemented in the 80s as a measure for the same film would not compete against itself in different channels. The objective was to achieve the maximum possible benefits that the same film could obtain first in the cinema, then in DVD and, later, in rent, in television, etc. In this way, each part of the ecosystem would have its piece of cake, its “business” insured.
From the premiere of a film to a film until we can see it at home, it usually takes between four months and two years
The premise is basic: until not “running out” a channel is not passed to the next. Thus, the established traditional model counts on that a film premieres exclusively in the cinemas in a time that more or less revolves around the four months. After that time, the distribution window begins, the turn for the other channels.
Normally between the fourth and the sixth month after the premiere in cinemas, the film will be released on DVD. Between the fifth and the seventh month post-release becoming available in digital rental, pay per view (pay-per-view ) and digital downloads (iTunes). Later, in about two years (and here there are nuances), I would come to video-on-demand services like Netflix, HBO, Amazon, etc. And finally, within a period of more than two years, it is the turn to cable television and open television.
In the case of the television series, the system of distribution windows also there, a little more simplified but with the same problem: you have to wait for a time ranging between four months and two years if you want to see in your home a Premiere of a movie or series.
Distribution windows tend to narrow
Although the traditional model of distribution windows has been in force since the 1980s, the trend is that less and less time is spent since a movie or series premieres until it can be enjoyed on any other channel. Issue? That breaks a balance in which the main disadvantaged are those who went first in the queue, i.e. the cinemas and the DVD sale.
According to Disney, the 95% of the tickets for watching movies in the cinema are sold during the first six weeks since the release. If we shorten the distribution windows, the cinemas would have less “exclusive” time to market the films and, therefore, fear that their business will suffer. Something similar happens with selling on DVD. If physical DVD sales fell from 2014 to 2015 by 12%, while consumption in streaming platforms like Netflix or HBO increased by 25% over the same period, what would happen if you removed the DVD the privilege of being the Second in the distribution process? That the public would probably buy even fewer DVDs.
And here we have a conflict between the interests of the consumer, more and more accustomed to seeing seasons of whole series thanks to Netflix, and those of the protagonists of the distribution windows. There are initiatives that seek to reduce these times, but that does not mean that cinemas remain reluctant to change the model.
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We think that if there is a simultaneous premiere of a movie in cinemas and on different platforms, the ban on the competition is opened and, yes, many people prefer to see it at home instead of going to a movie theater. As is happening in the world of music and streaming, it is about finding a balance and new ways of monetization, not to remain anchored in a model contradictory to current consumption habits.
Juan Carlos Tous, CEO and founding partner of CAMEO and filming, bet by a windowing system more flexible distribution:
It makes sense for the windows to be established by the audience and the film itself, so that if a film is seen in theaters, the film should have the time it takes to meet the demand, which is filling the rooms! Now, if a movie does not work in the cinema, because you have been wrong with the communication, because the target you went to does not go to cinemas (…) and the second week you see how the exhibitors themselves limit their life in Cinema, the distributor should then be able to open the Internet window and launch it on DVD.
End of cycle with Netflix or HBO?
Although the window system can adapt to new times with shorter waiting times, there is something that may change the rules of the game. Both Netflix with its ‘Originals’ and HBO with their own productions, are betting on a model in which they leave out the cinemas. Each company has its own producers, its own times and a user base that continues to grow.
It would not be preposterous to think that, in the future, the big premieres that we have to see in movies tomorrow, may be available directly in these video services on demand. If an episode of the sixth season of ‘Game of Thrones’ and cost about ten million dollars produced (and there are even more expensive examples on television) is a fairly representative sign that maybe, just maybe, known as blockbusters End up going directly to our house through streaming. What role would then be left to the movie theaters and the distribution windows?