Soderbergh + Cuban, Wagner's 2929: Break all the windows.

When I interviewed Mark Cuban earlier this year for a Wired Magazine feature on digital cinema (link), he mentioned plans to change the way movies are released. Here's how it works in Hollywood now: new releases are made available on DVD and pay-TV some time after they've left theaters. That "window" of time has been shrinking in recent decades. Cuban said that his distribution company 2929 Entertainment, which he runs with business partner Todd Wagner, saw no point in this delay. "Let's release everything all at once, and let the consumer decide," their argument goes.

Several months later, they're making good on those plans. Earlier this week, news broke that 2929 is doing just that, with Steven Soderbergh. The director will release six films through 2929 so that theater release, DVD and pay-TV all occur on the same day. Interesting analysis in this Hollywood Reporter item yesterday by Martin Grove:

[Soderbergh's] new plans come at a time when the debate is already underway about how soon after their theatrical runs begin films should go into DVD release. But while support seems to be growing in Hollywood for a shorter window separating theatrical and DVD the idea of eliminating that window altogether is an entirely different matter. It goes without saying that exhibitors aren't happy to begin with about seeing the window shrink between theatrical and DVD. On average, it's now a period of four months and 16 days from the start of a film's theatrical run to its DVD street date. Two years ago, the same window was almost five months and if you go back 10 years, it was about six-and-a-half months.

Since exhibitors keep a larger percentage of boxoffice receipts later in a film's run than they do in the first few weeks, which favor distributors, it's understandable that they don't want people who might buy movie tickets two months after a picture has opened to hold off a few more weeks because they know the same movie will be coming out then in DVD. A DVD priced at $14 or less is obviously a lot more attractive to many people than buying four $10 movie tickets is and then forking over another $20 or more at the concession stand for popcorn, soda and candy.

Here's a relevant snip from the raw transcript of that January 2005 interview with Mark Cuban in Dallas. Part of this interview was included in "The Cuban Revolution", Wired issue 13.04, but I'm posting some additional detail here:

Cuban: We're going to release our films in as many ways as possible without worrying about windows. if we're wrong we're wrong, but if we're right [XJ: he flashes a mischevious grin] just think! Most movies — even the best of movies — 90% of box office gross happens in the first weekend. Same with DVDs now, most sales happen in the first weekend of release. One night stands. If you want to sell somebody the DVD after a movie has left theaters, you have to remarket the movie all over again.

Bread tastes better while it's hot, so we're gonna deliver it hot. Do a bigger marketing push with release of movie. We'll say to consumers, go to theaters if you wanna have an out of home experience. If you can't get away because you can't find a babysitter for the kids that night, fine — we'll charge you a premium, maybe $24.95, to see it during that first opening weekend, or maybe it will be a premium part of a Blockbuster or Netflix subscription. Maybe part of a pay-per-view scenario where you pay $19.95 and everybody sits at home. But you see it that night, where you want it, how you want it.

XJ: How do you know this is going to work?
Cuban: We'll know when we start if we're right or wrong. We can pre-sell it… we might say, you can buy up here at this price during the first week, and we charge less later. With HDnet films [XJ: Cuban's production company], we make the proposition going in to filmmakers: this is how we're going to distribute it. We think this will be a lot better.

XJ: What challenges are involved?
Cuban: Biggest challenge I think we'll face is who gets to review it first — TV or movie critics. The awareness factor when a movie first releases is way up here [XJ: he holds arm high], why wait for it to ebb again, then put all this effort into push it back up here again?

XJ: If this idea makes so much sense, why isn't Hollywood doing it already?
Cuban: Most people are afraid of change because that system is what's in place. That's their problem. It's not my system — I don't have a business to protect. I have a business to build. I control the whole supply chain [XJ: referring to the various production and distribution companies Cuban owns with Todd Wagner, along with Landmark Theater chain]. If I'm right — the whole thing accelerates. if I'm wrong, I still have great content. And I'll work with filmmakers to make it strong for them.

Link to Reuters story, Link to April 29 press release announcing the plan. (Thanks Casey, and others!)