Cinemark Threatens to Ban TOWER HEIST from Its Theaters in Response to Universal’s VOD Plan

     October 6, 2011

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Just yesterday, Universal Pictures announced it would be releasing Brett Ratner’s Tower Heist to premium VOD subscribers a mere three weeks after the movie opens in theaters on November 4th. In direct response to this announcement, Cinemark (the nation’s third largest theater chain) has threatened to ban the movie from all 300 of its locations. This is a bold move that our own Matt Goldberg agreed with in principle, but didn’t expect to happen. As Matt mentioned, Tower Heist could potentially be a very successful film as it “has the stars, a sound comic premise, and it covers multiple demographics.” Will Cinemark really risk the tens of millions of dollars it stands to lose by taking a stand? Or will Universal Pictures blink first rather than risk losing the revenue?

Hit the jump for more info.

The Universal Pictures announcement marks the biggest test of the VOD business model so far, as they plan to offer it to the 500,000 or so digital cable subscribers in the Portland, OR and Atlanta, GA regions. Apparently, the higher-ups at Universal had been in discussions with the theater chains for over a year now and didn’t think the threat of 500,000 less tickets would cause any of them to flinch. Although “Cinemark recognizes and acknowledges the changing technological landscape and related challenges that Universal and the other studios are facing in the in-home window,” their understanding is apparently not enough to merit their approval.

In a continued statement from Cinemark to the LA Times:

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“Cinemark has urged Universal Pictures to reconsider its market test of this product. If Universal Pictures moves forward with its ‘Tower Heist’ premium video-on-demand offering as announced, Cinemark has determined, in its best business interests, that it will decline to exhibit this film in its theatres.”

The two larger cinema chains, AMC Entertainment and Regal Entertainment, have yet to side with either Cinemark or Universal. Each of the theater chains have stood together in protest before, so it will be interesting to see the fallout. Yes, obviously movie theaters stand to lose money if patrons stop going there. But let’s break it down for you, the consumer (who always seems to be forgotten in these discussions).

You and the family could go out to the theater on the weekend of Black Friday to see Eddie Murphy and Ben Stiller’s new comedy, Tower Heist; maybe you even take Grandma. Let’s say you pay $10 a ticket. I’m not a doctor or anything, but that’s at least $40 right there. Then Junior’s got to have snacks and the Missus has to have popcorn and Grandma wants to jazz it up with some Sour Patch Kids. Tack on the gas for your Prius and you’re way over $60 already.

OR you could stay in the comfort and relative sanity of your own home and watch it for $59.99 with all the snacks and drinks and clean, comfortable restrooms you want and none of the crowds or sticky floors or people who ignore the “Don’t Use Your Cellphone During the Movie” PSAs. The stress-saver alone is worth it, though for individuals or even couples, the VOD might still be a bit steep.

Theaters are fighting a losing battle as technology makes it easier (and eventually cheaper) for us to stay cooped up in our homes, doing all the “socializing” through cables and screens. Stay tuned to see how this stand-off shakes down. Who do you think will blink first?

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