We’ve talked about this quite a bit since the COVID-19 pandemic has forced the closures of nearly every theater in the US, but cinemas across the country are facing an existential crisis, with many fearing the worst. However, even with the uncertainty of when cinemas will reopen in the US, studios have, for the most part, kept their big releases on the shelf, delaying them months, or even a full year in some cases, to ensure the projects get a full theatrical rollout with the appropriate release windows. And the National Association of Theater Owners (NATO) is here with a new study that it thinks will convince studios that they’re doing the right thing by not rushing films to VOD.
According to a new study (via Variety) from Ernst & Young, commissioned by NATO, it appears that the longer a studio waits before it takes a theatrical release and puts it on home video, the more money everyone makes. The results were said to show a “statistically significant” impact on theatrical box office and home video revenue, per NATO.
The study says that a film that stays in theaters 100 days and doesn’t hit VOD until 108 days will make $1.75 million more in revenues than the exact same film that had a theatrical run of 100 days but hit home video in only 98 days. According to the research, 67% of the added revenue comes from the theatrical box office, while the rest comes from home video.
NATO also shows concern with the shortening of theatrical windows that has been taking place in recent years, saying, “In 2012, the average theatrical run was 102 days and the home release window was 112 days. In 2017, the average theatrical run was 94 days and the home release window was 85 days.”
Once again, NATO wants to assure everyone that the theatrical release model, which has been in effect for years, is not going to be undone because of the COVID-19 closures of cinemas in the US. In fact, NATO points to the fact that almost every film that was scheduled to be released in March through June has chosen to reschedule versus making an early debut on VOD.
“Without theaters available, the release window was temporarily irrelevant for those movies,” the organization said. “These unique circumstances, however, do not signal a change to the theatrical release model. Three titles unreleased at the time of the shutdown have chosen to go straight to the home, yet the vast majority of theatrical releases scheduled from March through June have been rescheduled for theatrical release — 37 of them, with six more delayed with no set release date — rather than rushed to the home.”
Clearly, we need to take everything NATO releases about this subject with a grain of salt. Like other studies commissioned by groups with a vested interest in the outcome, it’s no surprise that theater owners would want to warn studios against releasing films on VOD and skipping the big screen. But that being said, the numbers that NATO has released do offer a bit of evidence to back up the claims.
With COVID-19 still forcing closures, with most people not thinking that cinemas in the US will reopen until June, at the earliest, there’s still plenty of time for studios to continue to figure out how to make money on films that are currently sitting on the shelf.
