On Charlie Rose last night, Time Warner CEO Jeff Bewkes explained his desire to shorten the time between theatrical releases and home entertainment availability. His reason? It’s great for everyone ever.

It makes sense that Time Warner (which owns New Line, Warner Bros., HBO, DC Comics, Castle Rock Entertainment, and other media ventures) would want to shorten the window. Bewkes evoked the dreaded P-word in his initial rationale for getting movies to television screens sooner, but he also recognized that there’s an audience beyond pirates that wants to have home-viewing options.

“Everyone in the business, including theater owners, has an interest,” said Bewkes.

But what exactly is in the theater owners’ best interest? And what will broadband bundled with shorter waiting periods mean for DVD and Blu-ray?

Stale Popcorn

The claim that theater owners would benefit from shorter exhibition windows seems absurd en face. The numbers vary depending on different studies, but every theater owner I’ve spoken to agrees that they’re a business held hostage by ticket rates and an unbalanced percentage cut, especially when it comes to bigger films where the studio seeks 90% of ticket sales in the opening week (with descending rates as the weeks continue). How cutting them off at the knees when the percentage rates start to level off will help them is unclear.

Make no mistake, shortening the window will have a negative effect on down-the-line ticket sales. However, theater owners are not helpless victims either. They’ll need to do a better job of drawing in customers with more than just the name on the marquee to stay afloat. Those that don’t, will fail. Those that do, will find a re-engaged audience that doesn’t mind paying a fair price for an excellent viewing experience.

On the other side of the fence is the piracy argument. This is what many pirates have been saying all along. Amidst other arguments, a major point is that they wouldn’t be breaking the law if they didn’t have to. If there were fairly-priced, easily accessible digital versions of movies and television shows, apparently piracy would all but dry up. That seems about as absurd as Bewkes’s claims, but it’s still vital to recognize that at least one major corporate master is taking notice of what they’re saying (while also trying to revive SOPA in closed-door deals).

Will DVD and Blu-ray Die At the Same Time?

“They’re still in Walmart and 7-Eleven…The bad news is [DVDs] may have to be cheaper,” said Bewkes in the interview.

This seems to be the biggest looming question because of the potential impact of a positive answer. The proliferation of technology has always seen the rise of new champions (like VHS in the 80s) which are eventually destroyed (like VHS in the 90s) in favor for a new format. DVD has been on life support with the rise of Blu-ray, but if broadband technology and an increasing need to store our belongings in the cloud overtakes us, Blu-ray could be killed alongside the format it’s helping to kill.

The scenario is an easy one to imagine. A family has to decide whether or not to spend time and money to go to the store and get a DVD/Blu-ray or to pay a similar or cheaper amount by clicking a button and ordering an instant digital copy they can house in the cloud. That may seem more like a near future, but we live in a world where asteroids are about to be mined for water. The future was three years ago.

The hurdle standing guard over physical home entertainment options is the idea of ownership. For the same reason some (including me) are reluctant to give over their books wholesale to a digital device, fans may want to hold a movie in their hands and be able to see it on the shelf. There’s a psychological aspect at work here.

Of course, all of that is still secondary to profit margins. If DVDs and Blu-rays are both forced to be cheaper in order to compete, it might as well signal the beginning of the end for both. If companies can’t make a compelling amount of money per unit (after considering store percentages and other overhead), and if tossing digital versions onto the virtual world is so cost-effective, it may no longer be in the best interest of companies to produce DVDs or Blu-rays. Or at least as many.

This is all hypothetical. In fact, with the announcement of 4k televisions, Blu-ray could be killed off by a newer format before broadband has a chance to do the critical damage.

The point is that as broadband becomes more and more available (and more and more accepted by the audience), physical home video formats might struggle to compete. It seems clear that digital distribution is the future; it’s just a question of how soon that future can be.

The Bottom Line

What Bewkes is proposing could be injurious to theater owners (he’ll likely have plenty to account for to NATO) but with all stages of evolution, there are winners and losers when the change comes. It won’t kill theatrical releases completely, and even physical home video formats might stay alive in some form or fashion. After all, vinyl still exists. There are enough collectors out there to make a 4K option a viable one, or to even keep Blu-ray around, but it will undoubtedly go from mass media to a niche market.

However, the interview provides insight into where a very powerful company might be headed and where they might lead the pack. At any rate, whenever you see a trailer and think, “Eh, I’ll just wait for the DVD,” you might not have to wait as long as you think.

Where is the future of home entertainment headed? Will Blu-ray be the last physical format? Will shrinking release windows hurt theater owners or fans?


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