Paramount to Speed Up Home Release of Movies

Paramount Pictures has struck a deal with two major cinema chains to make new movies available to watch at home just two weeks after they leave most theaters. The new arrangement will begin with two smaller films, but the Viacom-owned studio hopes to continue with the strategy, potentially changing the calculus of movie distribution for studios and exhibitors alike.

Since the rise of the VCR in the 1980s, studios have waited at least 90 days after a movie debuts on the big screen before making it available elsewhere, regardless of when it stopped playing in theaters. Most movies play for less than two months, but cinema owners have argued that people wouldn’t go to the multiplex if they knew they could watch a film at home in less than three months. In recent years, however, a growing chorus in Hollywood has complained that the 90-day “window” encourages piracy and fails to acknowledge shifting consumer behavior. A recent study commissioned by Paramount found 72% of consumers weren’t aware of the 90-day delay. Even so, shortening that window is a much-debated idea for an industry that continues to wrestle with shrunken DVD sales, a rise in digital competitors and worrisome attendance trends at the multiplex.

By reaching a pact with two of North America’s largest exhibitors — AMC Entertainment Holdings and Canada’s Cineplex — Paramount has crafted the most legitimate threat yet to the traditional theatrical model. To sweeten the pot, the studio will share a portion of revenue from iTunes downloads, video-on-demand, and other digital channels with exhibitors that play the films, giving them a hedge in case box-office revenue declines.