Studios say no to PPV bows
"We would absolutely not be interested in distributing any movie that's going to (premiere) on pay-per-view" said Warner Bros. distribution prexy Barry Reardon. "It would just be sounding the death note for the theatrical business. Basically they'd be playing second-run."
The issue first arose when MGM co-chairman/co-CEO Alan Ladd Jr. said he didn't intend to distribute the pending Carolco/TCI PPV preems even though the studio will have first crack at them when its new distrib deal with Carolco kicks in next year.
Ladd's statement followed the announcement of a deal in which Tele-Communications Inc., the nation's largest cable operator, would invest $ 90 million over four years in Carolco in exchange for four feature PPV preems.
Echoing Ladd, exex from WB, Fox, Paramount, Disney, TriStar, MCA/Universal and Orion made their message clear: Films should be seen on the big screen first.
Most spoke passionately on the subject, arguing a TV preem even if timed day-and-date with a theatrical release would destroy the traditional release pattern and threaten exhibitors' very existence.
"The movie business is about sitting alone in the dark with 600 people," said 20th Fox exec VP Tom Sherak. "It's between you and the screen. I think there's something magical about that."
While Carolco and TCI exex could not be reached for comment TCI chief operating officer Brendan Clouston had previously told Variety that PPV preems would not drain the moviegoing pool. Rather, they would tap into a new market, such as large families, for whom the cost of going to the movies may be prohibitive.
In 1983, Universal attempted the first PPV day-and-date theatrical release with "The Pirates of Penzance." Many exhibs refused to book the film, which rung up less than $ 5 million at the B.O.; TV penetration ranged from 5% to 12%.
But "Penzance" wasn't an event movie. "(It) was a narrower audience picture" per an MCA PPV exec. "(It was) made as a theatrical movie but in all fairness it isn't the kind of thing TCI and Carolco are talking about."
Aside from the preem itself, studio exex question viewers' willingness to pay to see a theatrical film on a TV screen.
"Watching a movie on anything from a 10-inch to 37-inch TV screen is not the same as watching it in a theater with 500 people on a 60-foot screen" Reardon points out.
Cost is another deterrent, per Sherak. "Are people staying home going to pay $ 24? I wouldn't." PPV preems would reportedly range from $ 24 to $ 30 a viewing. But the jury is still out on the future of PPV preems. Orion Pictures prexy/CEO Leonard White for one wants more facts about TCI's plans before he delivers an emphatic no. "Right now Orion's interest is initial theatrical release for our films" he said.
Barry London, Paramount's worldwide distrib prexy, also qualified his rejection.
"Our first order of business is the production and distribution of theatrical motion picture product," he said, "and will continue to be in the foreseeable future."
TriStar prexy Michael Medavoy said tests will likely determine the PPV effect on the economics of the cycle, which now runs theatrical-homevid-pay TV-regular TV. Medavoy eyes the PPV preem plan warily, saying, "We're not going to be encouraging it right now."
But a TriStar exec said: "Exhibitors have expressed to me that if a movie is on TV first they won't play it in their theaters. So it's a Catch-22, really." Disney exex declined interviews. But a company spokesman said the official answer to the distrib question was: "No."
Columbia declined comment.
