Opinion: Technology: The ‘Tower Heist’ tiff

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Any big-budget movie is a risky proposition, even more so these days if it features Eddie Murphy. And I say this as a fan, one of maybe 237 people in America who saw ‘Imagine That’ and loved it. But the risks for ‘Tower Heist,’ a new film with Murphy and Ben Stiller, seem to be getting bigger by the day.

What’s making matters dicier for the film is a plan by Universal Pictures, which is distributing ‘Tower Heist,’ to make it available to selected home viewers a mere three weeks after its debut in theaters Nov. 4. Much to the chagrin of theater owners, the studios have been gradually shrinking the exclusive window for theatrical releases, making movies available on DVD and video-on-demand much sooner than they did a decade ago.

‘Tower Heist’ takes this trend to an extreme, and some exhibitors are fighting back. Since Universal’s announcement last week, several theater chains -- including Cinemark, the third largest in the United States -- have said that they won’t show the film on their screens. The fewer screens that offer the movie, the harder it will be to recoup the filmmakers’ sizable investment.

The movie will be available on-demand only to Comcast subscribers in Portland, Ore., and Atlanta, and it will carry the whopping price tag of $59.99 per viewing. Not coincidentally, Comcast is Universal’s corporate parent. The pricey ‘Tower Heist’ offering is a test, similar to the efforts by Universal and three other studios earlier this year to offer movies to selected DirecTV subscribers for $29.99 per viewing two months after their theatrical releases.

Theater owners say that they’re concerned about the precedent that would be set by the extraordinarily early ‘Tower Heist’ release. They argue that they can’t be expected to go head-to-head with home video. But exhibitors are in big trouble if the only thing drawing people into theaters is their exclusive deals with distributors.

For starters, there’s no such thing as exclusivity anymore. The Internet makes (illegal) copies of just about every movie available for free within days of their release, if not before. In addition, the competition for the time and money people have to spend on entertainment gets more intense by the day.

Nevertheless, exhibitors have an advantage. The experience of watching a movie in a cinema cannot be replicated in a living room, no matter how big your TV set is.

Unversal’s experiment with ‘Tower Heist’ assumes that people who can go to the theater to see a big-budget film will do so, even if they could save a few bucks by trooping en masse to a friend’s house to watch the movie on demand for $60. The consumers the studio is trying to reach with the early VOD release are those who’d like to see the movie but can’t. Maybe they can’t find or afford a babysitter. Maybe the local theaters’ showtimes don’t fit their schedules. Maybe they’re on call and can’t risk going out.

The studios’ interests aren’t the same as the exhibitors’, but they’re not necessarily in conflict. The revenue generated by theatrical releases can be extremely significant, even if it usually won’t recoup all of a film’s costs. And studios don’t profit by persuading people to spend a few dollars per head on VOD instead of $12 or more per movie ticket. The issue is how to get the most out of the multimillion-dollar marketing campaigns staged around a movie’s theatrical release -- and particularly, how to provide a legal option for those who can’t or won’t go to the multiplex.

The Internet has forced every entertainment company to grapple with this sort of question. Supporting new modes of distribution could bring products to new audiences, but it also threatens to cannibalize existing revenues. The music industry found out the hard way, though, that there’s greater risk in waiting too long to support the new models than in moving too quickly.

So what about you? Is $60 for to watch a new movie at home tempting? Why or why not? Take our poll and leave a comment below.

-- Jon Healey