For Day and Date Distribution
by Jarrett Tan
The rationale behind this strategy is that so much money is spent on advertising and promoting the initial release of the movie itself, that the movie ends up not really making that much money after all.
As Edward Jay Epstein (in his article "Gross Misunderstanding") explains:
The cost of prints and advertising for the opening of a studio film in America in 2003 totaled, on average, $39 million. That’s $18.4 million more per film than studios recovered from box-office receipts. In other words, it cost more in prints and ads — not even counting the actual costs of making the film — to lure an audience into theaters than the studio got back.
Basically, the theatrical release is just advertising for the DVD and TV release of the movie itself. The theatrical release makes, on the average, no money at all. Cuban and Wager, therefore, reason that it makes no sense to have one big advertising push -- the theatrical release -- and then release the same product on DVD 3 months later.
Day and Date is also an inevitable step to fight piracy. Many people resort to piracy – downloading movies off the Internet, or buying pirated DVD versions of movies – because the legal DVDs are not available to them right after they watch the film in the cinema, or as an alternative option to the cinema. By having the DVD come out on the same day as the movie in the cinema, it gives people one less excuse to resort to piracy.
It can also be viewed as an attempt to get ahead of the way consumers are accessing entertainment in new formats, including the computer, iPod and cellphones. People are growing impatient with so-called "distribution windows" that create a cascading series of restrictions for a film over a period of months: first to theaters, then hotels and airplanes, then home video, pay cable and finally, broadcast TV.
Supporters believe, if implemented fully, this strategy won't even affect the box office. Mark Cuban likens it to watching a sports game. People have been going to watch sports games live for years, but games are also shown on TV, and that doesn't affect stadium attendances at all. And in that same way, people like Cuban believe that movie lovers will still go out on the weekend to catch the latest movies, because there is nothing like the experience of seeing a movie in a cinema.
It's also a social experience, because people just love to get out of the house on a Friday night to meet their friends and watch a movie on the big screen with 400 other people.
Movie houses are probably feeling the most threatened by day-and-date, as they fear with the availability of these other formats, less people will come to watch movies in their cinemas. In fact, many theater chains froze "Bubble" out (which could partially explain its financial failure).
But a compromise can be worked out, surely. For example, in the US, 2929 Entertainment has offered cinemas that screen day and date films like Bubble a percentage of the DVD sales as an incentive for them to screen it.
So far, Bubble and Enron: The Smartest Guys in the Room are 2 of the first movies to be released day and date, and both of those movies were released simultaneously in theaters and on HDNet Movie, Mark Cuban's Cable TV channel. However, they were only run twice on HDNet Movie on its opening Friday night. Cuban argues that the simultaneous TV showing of Enron boosted theater traffic. “We only aired the movie twice opening night, so [some] people missed it. But they learned from friends or family how good it was, and then went to the theater."
The day-and-date release is a win-win situation for both the consumers and the movie studios. They save money on advertising, and we get the choice to watch the movie on whatever format we feel like. If it's cold and rainy outside and we're too lazy to go out to the cinema, we can just watch it on Pay-per-View-TV. Or after watching the movie in the cinema, if I liked the movie a lot, I could just pick up the DVD outside the theater itself and go home and watch it again.
Info taken from here and from Time Magazine, March 20 2006.