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LOS ANGELES (Reuters) - Europe's top movie theater chain plans to withdraw from screening the Walt Disney Co's latest film "Alice In Wonderland", escalating a dispute over the U.S. studio's proposal to release the movie's DVD weeks earlier than usual.
But Disney's long-term strategy calls for less reliance on those chains in favor of revenue from Blu-ray video and online distribution, analysts say.
On Monday, less than two weeks before the movie's March 5 debut, exhibitor Odeon & UCI Cinemas Group, owned by the London-based private equity firm Terra Firma, said it does not plan to show the movie in its UK, Irish or Italian cinemas because Disney wants to sell the DVD five weeks earlier than usual.
Theater owners worry audiences will skip seeing the movie on the big screen in favor of a shorter wait for the DVD, if Disney moves up its release.
A decade ago, DVDs were typically released six months after a film's theatrical debut. But Hollywood studios have been gradually moving up their DVD releases, to tap those consumers who rarely go to the theater. Disney's move will shrink that time to 12 weeks.
Odeon Cinemas operates 110 theaters in the UK and 22 in Italy.
Negotiations continued this week between Disney and No. 2 U.S. chain AMC Entertainment Inc, which boasts more than 4,500 screens.
Still, analysts said U.S. theater chains are unlikely to boycott en-masse the year's first blockbuster release, wary of the hit to their bottom line -- at least for now.
AMC did not return calls, and Disney declined comment.
"AMC's a major exhibitor chain, obviously that makes a difference, but my guess is this (dispute) will be settled close to the opening-day release," said analyst Hal Vogel of Vogel Capital Management.
"Disney understands the implications of what they're doing," Vogel said. "They're looking to the long-term future, and the long-term future is less reliance on theaters and more reliance on new technology."
That new technology involves getting movies into homes through Blu-ray discs, as well as other delivery methods such as video-on-demand.
"Theaters are obviously very important still, and any distribution company would be foolish to upset the relationships to any great degree," Vogel said.
Editing by Edwin Chan