Window Between Theatrical, DVD Releases Narrows

A distribution model is coming into its own. The window between theatrical and DVD releases is getting smaller, mostly thanks to the industry's new interest in streaming and on-demand. NPR's Neda Ulaby looks at the push behind on-demand, and the deals made between services like Netflix and film studios.

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"Avatar," the biggest movie of all time, is coming out on DVD this Thursday. But if you are a Netflix subscriber, you're going to have to wait nearly a month.

NPR's Neda Ulaby explains it has something to do with what the industry calls Windows.

NEDA ULABY: In terms of profits, the movie "Avatar" is much like its fictional planet of Pandora.

Mr. PAUL PALUMBO (Media Critic; Director, AccuStream Research): There's a whole ecosystem of entities that share in the value of that production.

ULABY: Media researcher Paul Palumbo says that value gets leveraged through Windows - the periods of time when you can see movies different ways.

Mr. PALUMBO: It goes through the theatrical level and it will enjoy a run there. And then it goes to DVD, and then it goes to the pay per view services and things. And then eventually it shows up on television.

ULABY: But that business model is in the throes of technological evolution. The biggest change: streaming video - on Netflix, YouTube, Hulu.

PARIS MORGAN: With Hulu, you can (unintelligible) to a lower resolution.

ULABY: Paris Morgan is an engineer here at NPR, and he watches more movies than anyone I know. Paris used to get at least three DVDs a week from Netflix. Recently, he's changed his habits.

MORGAN: I've been not renting. I've been doing a lot of streaming now.

ULABY: Streaming science fiction and TV shows, like "24" on Hulu.

MORGAN: You got five episodes of "24" and they post them the day after they air. So, there was one that aired Monday, Tuesday.

ULABY: That's the window, especially for TV shows, it's changing. Netflix subscribers can now instantly stream "24"'s old seasons. Same goes for other Fox-owned shows: "Lie to Me," "King of the Hill," "Buffy the Vampire Slayer." As it happens, Fox also owns "Avatar," and that's how Netflix came to cut the steal. In exchange for streaming all those shows, it agreed to wait 28 days before making "Avatar" available on DVD as a rental.

Mr. PALUMBO: There's more revenue to be derived by windowing it in that regard.

ULABY: Analyst Paul Palumbo says that strategy still works with your "Avatars" or your "Twilights." The studios want you to buy it. But if you're not going to buy it, they want you to rent it, then watch it on premium cable, then basic cable and so on. At the same time, though, we're seeing so many new movies and shows to stream, some people are losing interest in things that are not streamable, such as the big blockbusters.

Steven Swayze is an executive at Netflix. He says it's not always windowing that keeps movies from being streamed.

Mr. STEVEN SWAYZE (Vice President for Corporate Communications, Netflix): If a movie has a song that the producer of the song or the artist who created the song has not allowed Internet streaming or Internet availability, if that song does not have the license to be streamed, then that movie won't be able to be shown on the Internet.

ULABY: And, of course, plenty of movies cannot be shown on the Internet because the companies that own them like to keep manipulating their windows, says analyst Paul Palumbo.

Mr. PALUMBO: Companies manage their libraries in different ways at different times. "Snow White," for example - Disney doesn't always make "Snow White" available.

(Soundbite of movie, "Snow White")

Unidentified Woman: (Singing) I'm wishing, I'm wishing...

ULABY: "Snow White" and other Disney films are an earlier example of clever corporate windowing.

Mr. PALUMBO: And then it will become available again, and it might be available with enhancements or whatever. So, studios are always looking at ways to maximize a value of library and investment and they play with windows.

ULABY: In the case of "Avatar," the DVD coming out does not have a single extra - no commentary, no nothing. The studio wants fans to buy both this version and the fully-loaded DVD that comes out in gift-buying season in November.

Neda Ulaby, NPR News.

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