Following staunch opposition from theater owners, Universal Pictures has abandoned its controversial plan to make the movie “Tower Heist” available to consumers via video on demand just three weeks after it opens in theaters.
"Universal Pictures today announced that in response to a request from theater owners, it has decided to delay its planned premium home video on demand (PVOD) experiment,'' the studio said in a statement Wednesday. "Universal continues to believe that the theater experience and a PVOD window are business models that can coincide and thrive and we look forward to working with our partners in exhibition to find a way to experiment in this area in the future."
Universal did not say when it would attempt to launch another similar VOD release.
Universal recently said it would make “Tower Heist,“ which opens in theaters Nov. 4, available to about 500,000 cable subscribers of Universal's corporate parent, Comcast Corp., in two markets, Atlanta and Portland, Ore., for $59.99 via video-on-demand.
Studios are looking to such experiments as a way to shift their age-old business models and generate additional revenue that can help compensate for plunging DVD sales that have been undermining movie economics over the last several years.
Universal took pains to telegraph its plans to exhibitors ahead of time and stressed to circuits that the "Tower Heist" release was only an experiment.
Even so, a number of exhibitors balked at the release, contending such early releases would discourage consumers from buying tickets in theaters. Opponents including giant Texas-based Cinemark USA, National Amusements and smaller chains such as Regency Theatres of Calabasas and Sherman Oaks-based Galaxy Theatres have vowed not to play the movie. The nation's largest theater chain, Regal Entertainment also privately expressed its disapproval to Universal executives while simultaneously praising the studio for seeking the company's input.
Theater owners are concerned that showing movies in the home so soon after they arrive in theaters will discourage consumers from trekking to theaters to buy tickets.
Still, the reaction from the theater industry was more muted compared to early this year when the nation's largest theater chains publicly complained about being kept in the dark when four studios worked with satellite TV provider DirecTV to make certain movies available for video-on-demand 60 days after they premiered in theaters for $29.99.
The National Assn. of Theatre Owners had blasted those plans and mounted a campaign to oppose such moves. On Wednesday, however, the trade group offered a far more conciliatory response.
“NATO would like to thank Universal for responding to various theater owners' concerns and cancelling the PVOD test it was contemplating,'' NATO President and Chief Executive John Fithian said. "They have been engaged with individual exhibitors on this test, and while it was something that many theater owners could not ultimately support, the open and collaborative nature of the dialogue is appreciated. NATO recognizes that studios need to find new models and opportunities in the home market, and looks forward to distributors and exhibitors working together for their mutual benefit."
Similarly, Regal Chief Executive Amy Miles said she appreciated efforts by Universal executives to seek Regal's input. "We understand and respect Universal’s interest in finding a successful model for ancillary markets and we remain willing to assist Universal, and our other studio partners, in developing a strategy that is acceptable and productive for both parties,'' Miles said.
National Amusements boycotts 'Tower Heist' over VOD release
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Cinemark theater chain to ban 'Tower Heist' over premium VOD plan
-- Richard Verrier
Photo: Ben Stiller and Eddie Murphy in "Tower Heist." Credit: David Lee / Universal Pictures