UPDATE 1-Netflix 'Crouching Tiger' deal incurs wrath of theater chains

Tue Sep 30, 2014 5:10pm EDT
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(Adds Regal's response, shares)

Sept 30 (Reuters) - U.S. theater chain Regal Entertainment Group said it would not show the sequel to "Crouching Tiger, Hidden Dragon" in any of its IMAX theaters, objecting to a move by IMAX and Netflix to side step a normal theater release.

The sequel to the Oscar-winning movie will be premiered on Aug. 28 on Netflix Inc's online streaming service and simultaneously in select global IMAX theaters, Netflix and IMAX Corp said earlier on Tuesday.

"While a home video 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" wide on a smart phone," Russ Nunley, a spokesman for Regal Entertainment said in a statement.

Regal has 86 IMAX theaters spread across the United States.

A number of reports said Regal's rival, Cinemark Holdings Inc, would also not show the martial arts movie in its theaters.

Netflix is jointly producing the movie "Crouching Tiger, Hidden Dragon: The Green Legend" with Weinstein Co, marking the online video service company's entry into feature film production.

The movie will be the first of several others to premiere at the same time on Netflix as well as in IMAX theaters, the companies said.

The film is a sequel to Ang Lee's martial arts epic released in 2000 and is directed by martial arts choreographer Yuen Wo-Ping.

Regal's shares closed marginally down at $19.88 on the New York Stock Exchange. Netflix's shares closed marginally up at $451.18 on the Nasdaq.

(Reporting by Anya George Tharakan and Rishika Sadam in Bangalore; Editing by Feroze Jamal and Sriraj Kalluvila)