Theaters Threaten to Refuse Showing ‘Harry Potter and the Deathly Hallows’ Over VOD Dispute

By  · Published on April 13th, 2011

Most casual movie fans don’t know anything about the contentious relationship between the studios and the screens they use to display their wares. The quick and dirty version isn’t a pretty one. The studio system basically holds all of the power when it comes to how movies play, how much of the cut they get from them, and how long they’ll stay exclusively on screens.

Now that studios are attempting to show new films on Video-On-Demand just a month after hitting theaters (at the premium price of $30 (which is less premium than going to the theater with a family of 2–4)), the theaters are finally fighting back. Sadly, they’re fighting back with empty threats.

At least they’re going for the gusto. The National Association of Theater Owners (NATO) is threatening to boycott screening films involved in the VOD plan, and that includes the giant summer flicks that were on everyone’s Most Anticipated lists. The money quote from NATO chief executive John Fithian’s statement to the Financial Times:

“Let’s say you’re Regal Cinemas and it’s a busy weekend with a couple of big pictures opening. If it’s 50–50 between this picture and that picture and you have a partner that respects your [business] model and another one that doesn’t, you’re going to give the screen to the partner that respects your model.”

Respecting that model is a case of giving theaters enough time to make money off of doing what they do.

Here’s why all of this is so difficult on the screen providers. Say a movie studio is releasing a big movie like Harry Potter and the Deathly Hallows. They might request anywhere from 50% ‐ 100% (and you can guess which) of the take from the opening box office. From there, it’s a sliding scale that heads toward the theater getting more of a percentage as time goes on. By offering an alternative for patrons (and make no mistake that $30 to stay at home is an enticing offer), the studios are effectively crushing the theater’s ability to make money off of movies. In short, expect hot dogs to cost $30 soon, too.

But is this threat the right route? Doubtful. It’s almost unthinkable that NATO would go through with it, or be able to get all the theaters on board for it. The best they can expect to gain is to sit down at the table with the studios to talk about their position on the new model. Who knows what that might turn into.

As an intriguing sidenote, The Guardian is reporting that not all of the studios are 100% sure about the sped-up VOD offering. Paramount might be quietly balking at the whole thing, and if they choose to move away from it, and the theaters actually end up re-structuring their huge summer releases, Paramount flicks like Transformers: Dark of the Moon and Super 8 might have an even bigger advantage when it comes to finding an audience.

This situation is lose-lose for fans. If NATO gets their way, it will most likely mean price increases anyway. Studios want more money, and they are actively hunting for it. If NATO is forced to prove themselves, movies like Harry Potter and the Deathly Hallows might actually not be hitting theaters near you.

My open letter to NATO and to the studios is a short one:

Figure it out.

What do you think?

Movie stuff at VanityFair, Thrillist, IndieWire, Film School Rejects, and The Broken Projector Podcast@brokenprojector | Writing short stories at Adventitious.