"Crouching Tiger" takes on the theater industry

Lots of indie filmmakers have been experimenting with alternative distribution strategies in recent years, but aggressive attempts by major production companies and distributors to give consumers alternatives to the big screen at the time a film debuts are rare. Here we are again: Netflix, Imax, and the Weinstein Company are releasing a “Crouching Tiger, Hidden Dragon” sequel simultaneously in theaters and via Netflix streaming. The theater companies have maintained a stranglehold on the release windows, typically ensuring that films enjoy three months or more in theaters without any competition from home entertainment platforms.

The problem, as Variety’s Brent Lang reported, is that the theater chains are fighting back: “Four of the largest theater chains in the U.S., including AMC, Cinemark, Carmike, and Regal, tell Variety they are refusing to screen any so-called day-and-date releases in their Imax theaters.” We’ll see how this scuffle plays out, but what I find most interesting is the chains’ feeble attempt to justify their pushback because giving consumers the choice would harm those very consumers.

“While a homevideo release may be simultaneously performing in certain Imax locations, at Regal we will not participate in an experiment where you can see the same product on screens varying from three stories tall to 3-inch wide on a smart phone,” said Nunley. “We believe the choice for truly enjoying a magnificent movie is clear.”

And Carmike spokesman Robert Rinderman said, “We are committed to an exclusive theatrical release for the enjoyment of our valued guests. We are therefore opposed to showing day and date releases at our entertainment complexes.”

Mike Langdon, a Cineplex spokesman, argued that theaters remain the best way to see a movie and that the theatrical release window would be undermined if it agreed to screen the film.

Naturally, Netflix sees it differently. From Indiewire, quoting Netflix Chief Content Officer Ted Sarandos:

“Theater owners stifle this kind of innovation at every turn. The reason why we may enter this space and try to release some big movies ourselves this way is because I’m concerned that as theater owners try to strangle innovation and distribution. Not only are they going to kill theaters — they might kill movies,” he said before suggesting that Netflix would like to premiere movies the same day they open in theaters.

But as Indiewire’s Paula Bernstein writes, “independent films are already challenging the traditional theatrical model with multi-platform releases, including day-and-date VOD releases and ultra-VOD. So it was only a matter of time before Netflix wanted to jump on the day-and-date bandwagon.”

I know the ‘incumbent threatened by disruptive innovator defends market share through brute market power instead of innovating to outcompete challengers’ narrative is overly simplistic when it comes to movie theaters and film distribution, but that doesn’t mean it’s wrong, either.