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Biggest Exhibitors Nix ‘Crouching Tiger’ Netflix/IMAX Plan; What Happens Now?

Biggest Exhibitors Nix 'Crouching Tiger' Netflix/IMAX Plan; What Happens Now?

In what would be considered a shock to absolutely no one who knows anything about the theatrical exhibition business, all three of the largest U.S. exhibitor chains, Regal, Cinemark and AMC, have announced they will not show Weinstein’s “Crouching Tiger, Hidden Dragon” sequel in IMAX screens in their theatres when it’s released in the large screen format day-and-date with Netflix on August 28, 2015.  For years distributors have attempted to make in-roads to whittle down the “windows” that separates the start of the theatrical run of a film and the start of its ancillary run  (a minimum of 90 days, often longer).  In undoubtedly the most famous example, Universal tried and failed to slot in a VOD run of “Tower Heist” three weeks off theatrical avail in 2011, just in time for the Thanksgiving weekend.  That went over with exhibitors like the proverbial lead balloon and the plan was quickly abandoned.  In my time at Sony we also attempted to shorten the ancillary windows on a few occasions to similarly Waterloo-like results.

This time out, Weinstein partnered with IMAX and Netflix to bring the sequel to the surprise 2000 hit, “Crouching Tiger, Hidden Dragon” to select IMAX screens as well as to monthly subscription service, Netflix on the same day.  That company’s content chief, Ted Sarandos, has publicly supported a day-and-date system of providing feature length content to his small screens while they were also in theatres.  This time out, however, the response from the big three exhibitors has been quick and to the point….they simply won’t play the film.  This leaves Weinstein and IMAX is an interesting predicament.  What happens now?  Do they continue with the current plan and play IMAX screens in complexes owned by more day-and-date friendly exhibitors (there won’t be many of those)?  Do they simply rely upon this plan working internationally, specifically in China where grosses should be astronomical for the movie?  If that’s the plan then it’s hard to imagine it coming out financially for those involved(except possibly Netflix, whose service isn’t available in China anyway)  The China gross on CTHD2 will be the same from the IMAX screens in that country whether this plan was in place or not so the grosses will be what they’ll be there.  Therefore, what you’ve done is to virtually eliminate any chance of a domestic gross (just as a point of reference, CTHD totaled $128 million in 2000).  Will that take be made up by domestic Netflix fees?  Absolutely not.  And what do other international exhibitors plan to do?  Cinemark has a large presence in Central and South America and we already know their response.  What happens with exhibitors in Europe, Mexico, Southeast Asia?  Or lastly, do the companies involve scrap the plan altogether?

So…it will be fun to watch this play out.  Certainly there’s a slim-to-none chance of IMAX convincing the Big Three exhibitors to play the film (and Slim just caught the bus, by the way) despite referring to the film, as IMAX head Richard Gelfond did in a press release today,  as “Alternative Content, like the opera”.  If anyone is unfamiliar with that term, Alternative Content refers to one night only (with an occasional encore night) on-screen presentations of events such as The Met Opera, Bolshoi Ballet, Broadway shows or live sporting events.  It does not apply to all-week-long filmed content.  

Stay tuned.

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