LOS ANGELES (Reuters) - Walt Disney Co has asked theater operators to agree to a shorter time between the debut of its “Alice In Wonderland” film and the DVD release, as the company looks for new ways to ignite home video sales.
Disney’s move comes as studios mull ideas for speeding their films to the home entertainment market to fight slumping DVD revenue.
But theater owners have opposed attempts to move up home video releases out of a concern that consumers might avoid the theater in favor of a short wait for the DVD.
Bob Chapek, president of distribution for Walt Disney Studios, said in a statement the company remains “committed to theatrical windows, with the need for exceptions to accommodate a shortened period on a case-by-case basis, such as with Disney’s ‘Alice in Wonderland.’”
“We feel that it’s important for us to maintain a healthy business on the exhibition side and a healthy business on the home video side,” Chapek said. “We think this is in the best interest of theater owners, because a healthy movie business is good for them and allows us to invest in high quality, innovative content.”
Theater chains Regal Entertainment Group and AMC Entertainment Inc did not return calls seeking comment.
The ‘window’ is the time between when a movie ends its run in theaters and begins its release on DVD or television.
Plunging DVD sales have hit studios particularly hard because they get wider profit margins from DVDs than from theatrical runs, where they split proceeds with exhibitors.
“Alice” comes out on March 5, which means that, under the typical 17-week window, the DVD would hit retail in the middle of the summer, a traditionally slow period for DVD sales.
Disney CEO Bob Iger told CNBC on Wednesday that Disney has proposed a shortening of the window for “Alice” so it can put the video out roughly 13 weeks after the movie is released.
“That gives us the ability to put the video out before the doldrums of the summer and to put it out when the movie is very fresh in consumers’ minds,’” he told CNBC.
In years past, movie studios hesitated to move up the home video release of movies, out of a fear that national theater chains would retaliate by refusing to show those films.
But Hollywood insiders say Disney enjoys the power to shake up theatrical distribution because its films generate solid box office results, and theater owners are eagerly awaiting its “Toy Story 3” later this year.
“(Disney has) leverage, and there’s no reason why they should refuse to use it,” said analyst Hal Vogel of Vogel Capital Management. “It’s inevitable anyhow...if they don’t do this, somebody else will.”
U.S. theater box office receipts in 2009 boomed to $9.9 billion, but DVD and Blu-ray sales fell to $8.7 billion, marking the first time since 2002 that box office passed DVD.
“The DVD market has gotten slammed, even as theatrical has held up really well, so (Disney is) trying to rejigger the components to maintain some balance,” said Matthew Harrigan, analyst with Wunderlich Securities.
Reporting by Sue Zeidler and Alex Dobuzinskis; Editing by Bob Tourtellotte, Leslie Gevirtz