Paramount Pictures has announced that it will release some of its upcoming titles in an unconventional way: the studio intends to release two films —including the latest entry in the "Paranormal Activity" franchise — on video-on-demand platforms just weeks after their theatrical debuts, going against a long standing routine of a three-month wait period.
This is all happening in the wake of Hulu's $192 million deal for rights to the TV show, "South Park," as well as Netflix's recent deals with independent film producers.
Andrew Wallenstein, co-editor in chief of Variety, spoke with the Frame's John Horn to discuss the news.
There is some big news today out of Paramount, which is addressing what is know in the industry as "The Window." That is the time period between when a movie leaves a theater and when it is available on DVD and streaming services. What has Paramount announced?
Well, two of their upcoming titles — one of them being the "Paranormal Activity" franchise — they are going to try something interesting. Seventeen days after these movies have been in theaters, they are going to transition to digital distribution. Which might sound kind of wonky, but any kind of variation on the traditional is big news when it's coming from a big studio.
Paramount announced that it has two of the biggest theater chains on board, but it doesn't have Regal, which is the biggest. I suspect there is going to be a little bit of backlash from the theater chains, not just about these movies, but about the entire Paramount slate.
Yeah, there is indication that these are going to be just the first movies from Paramount to get that treatment. I have to think there will also be pressure, not only on other theater chains to modify and experiment in a way that critics have been calling on for years, but for other studios to do so.
The Paramount news really underscores the whole evolution of streaming. There is other big news this week about streaming: Hulu is reportedly paying $192 million for the rights to "South Park." That is even more than what Hulu paid for "Seinfeld." How do the economics of all of these deals make sense for these fledgling streaming services?
Well, what goes on in the subscription [video-on-demand] window is becoming a big piece of the puzzle for some of these shows. "South Park" is an example of a show that has done so well on streaming services that the amount of money that networks or studios are able to get helps support putting these shows on the air for many more years.
There is other news in the streaming world from Netflix, which is expanding its relationships with independent producers for original feature films. That's on the heals of a big deal it made with the Duplass brothers and its recent deal to distribute a film starring Brad Pitt. So what is Netflix's strategy and how does it differ from Hulu's?
Very different strategy. Very different business. [With] Hulu, we're talking about the economics of TV. With Netflix ,we're talking about the economics of movies — though we should make clear here these aren't big budget movies. But there is so much open space at the lower end of movie budgets that Netflix is just invading this territory at a time when studios seem to be retreating to just the absolute biggest titles. It will be interesting to see whether Netflix can have the same scale of impact [with movies] as it has had on the TV business in the past few years.
Amazon, Netflix, Hulu — is there another major player in the wings in the streaming world and who do you think that might be?
Well, I'm going to invoke the names of some old friends: HBO, Showtime — remember them? They used to have these things we call linear channels — or I should say they still have them. But what we've seen in 2015 is a handful of these networks are starting to put out streaming services that don't require you getting a pay TV subscription. It still is very early on, but you're seeing companies like Showtime — which just launched its service this week — do so because it's an acknowledgment of this new landscape. If they want to go toe-to-toe with the Netflixes of the world, they cannot be anchored to some traditional paid TV system that many see as too expensive and in the very beginning stages of declining in terms of its massive footprint in the U.S.