In an age of immediacy, where entertainment options are vast and easily accessible, having to wait several months to watch the most recent blockbuster film in the comfort of your home is just silly. Apparently, Hollywood film studios finally agree. Netflix Inc. (NFLX), no doubt, has had something to do with this development. 

According to the Wall Street Journal, major film studios from Warner Bros. to Twenty-First Century Fox​ Inc (FOXA) are getting set to start releasing movies for home viewing less than 45 days after their debut in theaters. This would cut the current minimum waiting period of 90 days, imposed by theater companies, in half. Although, the average time between a film’s big screen debut and release on video or digital platform was 102 days for the past year and as much as 135 days in 2005.

Competing for the Impatient Customer

The fear has always been that releasing a film too early would cut into ticket sales. While the cinematic experience may demand a certain premium, lengthening the time between a film's release on the big screen and its release on video allows theaters to extract an additional impatience premium from their customers.  

Yet, as global box-office growth slowed to just 1% last year, the theater model for extracting a premium from impatient customers is breaking down.

Netflix, on the other hand, is giving these impatient customers exactly what they crave by streaming its own original films the very same day they are released in theaters, that is, if they play on the big screen at all. Netflix’s sales grew at roughly 35% year-over-year last year after posting its largest-ever quarterly growth in new subscriptions, according to CNBC. (To read more, see: Netflix Posts Huge Subscriber Growth in Q4.)

Moving Forward

Forced to change or cease to exist, theater companies, while not overly enthusiastic, are open to plans being discussed by heads of major film studios to begin offering premium video-on-demand (VOD) services. Regal Entertainment Group CEO Amy Miles said that she would consider a plan as long as it worked to expand the business as a whole and provided her company “appropriate long-term financial participation,” according to the WSJ.

Ideas of compensating theaters for lost box office sales by sharing some of the premium VOD revenues are being floated. There remain disagreements, however, over the exact amount of time, whether it be as little as 10 days or as much as 45 days, between the film's appearance in cinemas and its release on video. Also, whether the timing should be the same for each film or should vary according to box office sales, is another aspect being discussed. (To read more, see: What Movie Theater Companies Are Doing to Compete with Netflix.)

Whatever is agreed upon, speed is of the essence as Netflix is ramping up its original film business with projects including big-name actors like Will Smith and Brad Pitt, and is currently in talks over a film directed by Martin Scorsese that would cost somewhere between $120 million and $130 million. 

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