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Martin McCaffery
Film God

Posts: 2272
From: Montgomery, AL
Registered: Jun 99


 - posted 09-30-2014 08:28 PM      Profile for Martin McCaffery   Author's Homepage   Email Martin McCaffery   Send New Private Message       Edit/Delete Post 
quote:
As Theaters Boycott Netflix, Collapsed Windows Seen as Inevitable
heaters Boycott Netflix, Collapsed Windows Seen
SEPTEMBER 30, 2014 | 05:42PM PT
Brent Lang
Senior Film and Media Reporter
@BrentALang
Major theater chains are united in their opposition to a plan by IMAX, Netflix and the Weinstein Co. to make “Crouching Tiger, Hidden Dragon: The Green Legend” available for streaming on the same day it hits theaters in 2015 but the question remains — how much longer can theater owners withstand the battering ram of technology?

The “Crouching Tiger” standoff heated up Tuesday after the four largest exhibitors in the U.S., AMC, Regal, Cinemark and Carmike, pledged not to show the martial arts sequel next year. That represents 257 of IMAX’s 418 U.S. screens, and these theater chains were joined by Canada’s largest exhibitor Cineplex, and Europe’s second largest theater chain, Cineworld, in a boycott that has grown international in scope.

It means “Crouching Tiger” could play on a limited number of IMAX screens in the U.S., and likely for no more than two weeks, the typical IMAX playing time.

But their efforts may be for naught, analysts say. Even if they succeed in preventing the “Crouching Tiger” revival from showing in theaters while it bows on Netflix at the same time, the old release date patterns are starting to look too archaic to the current insta-generation of consumers.

“The reality is that the future is going to be a lot different in the way that movies are consumed,” said Daniel Ernst, an analyst at Hudson Square Research. “There is zero doubt in my mind that over the next 20 years a lot of these windowing things will erode.”

Tuesday’s show of solidarity among theater owners has not been seen since 2011, when exhibitors banded together and refused to screen “Tower Heist” after Universal unveiled a plan to make the action comedy available on-demand for $60 three weeks after hitting theaters. Since then a tentative peace agreement has adhered to at least a three month window between when a film debuts and when it premieres on home entertainment platforms.

But Hollywood knows that change is coming — a lot faster than 20 years from now.

DreamWorks Animation CEO Jeffrey Katzenberg predicted earlier this year that theatrical windows would shrink to three weeks in the next 10 years, suggesting that audiences should “pay by the inch” to see a movie based on the size of the screen they watch it on.

“A movie screen will be $15,” he said, “A 75-inch TV will be $4. A smartphone will be $1.99.”

Privately, other studio executives may also be ready for the next step. There’s a sense among many Hollywood leaders that the window between a film’s theatrical debut and its release on homevideo is too long, especially for the Internet age. Plus, studios spend tens of millions of dollars marketing films to the masses only to have to turn around and shell out again to re-familiarize audiences with a particular picture when it hits home platforms.

“The moviegoing experience is evolving quickly and profoundly, and Netflix is unquestionably at the forefront of that movement,” said TWC co-chairman Harvey Weinstein in Monday’s announcement.

IMAX claims that the “Crouching Tiger” experiment’s success hinges on its burgeoning network of overseas theaters, but it will need a much warmer reception overseas than it received among North American and European exhibition giants.

If it works, the theater company, Netflix and the Weinstein Company aren’t ruling out other release date tests.

“If there’s an appetite there among exhibitors and among audiences we expect to do several more, but I’m not committed to a strategy,” said IMAX CEO Rich Gelfond. “We’re going in with our eyes open and we were fully aware of the issues people might have.”

IMAX will have over 200 screens in China by the time the “Crouching Tiger” sequel debuts on Aug. 28, 2015, so it may be able to make up for the loss of China’s Wanda, which owns AMC theaters. It also helps that Netflix does not operate in China, which means the film will not ignite as much controversy among exhibitors.

“Provided it gets through the quota on foreign films, this is an important market and we do intend to show it there,” said Gelfond. “Given the nature of the film, it should do well there.”

Not every one is convinced that releasing the “Crouching Tiger” film on Netflix and in theaters at the same time endangers ticket buying. The late August release date was selected by IMAX and its partners because it historically is one of the worst box office weekends of the year. Moreover, the film itself is modestly budgeted in the $20 million range.

“We believe there are a number of relatively small sized budget films ($15mn-$30mn) which could draw an audience via Netflix without impacting exhibition industry grosses,” wrote Eric Handler, an analyst with MKM Partners, in a note to investors. “In fact there are hundreds of films every year that bypass theatres and launch direct to DVD/VOD.”

He noted that films like “Arbitrage” and “Margin Call” have been unveiled on-demand at the same time they hit theater without disrupting the exhibition game — all films that opened in limited release, like Radius-TWC’s own VOD success this summer, “Snowpiercer.”

If theater chains want to thwart the digital threats, analysts argue, they need to improve the premium nature of their experience. Not only must they compete with each other, they would need to head off against gleaming home entertainment systems and the ubiquity and convenience of streaming services and mobile devices.

“It’s got to be different,” said Ernst. “You’ve got to win customers every single day.”

There is one issue on which theater chains and IMAX’s leadership agree: the best way to see a movie is in theaters.

“A movie like ‘Crouching Tiger,’ which is a visual spectacle that comes off a highly successful prequel, should be seen in the way it was meant to be seen — with big screens, big images and great sound,” said Gelfond.

The only difference is that in the case of the “Crouching Tiger” sequel, people can see it on a 3-inch screen instead, and that’s what has theater chains seeing red.


Variety

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Frank Cox
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 - posted 09-30-2014 09:26 PM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
I remember reading a very insightful comment somewhere (maybe here?) stating that without theatres, movie companies are just television studios without a channel.

I really don't see why they would want to play that role. No "made for tv" movie has ever received the hype or attention that any of a dozen or more movies that are released in theatres receive each and every year.

I suppose there is a question of having confidence in your product too. I have difficulty believing that in competition with a three-inch cell phone, folks like us who measure our screens in feet can't compete.

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Mike Blakesley
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 - posted 09-30-2014 09:36 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
I guess I still don't understand Jeff Katzenberg's "pay by the inch" thing. Under that model the only way the studios would make money is if hardly anyone watched a movie on a cellphone for $1.99 and most people still went to theaters for $15. That won't happen, especially after a few cellphone watchers start Facebooking and Tweeting and otherwise posting how bad the movie sucks....or if people invite a gang of friends over to their "gleaming home theater" to watch a new movie for which only $4 was paid.

If a million people watch a movie on phones, that's $2 million. If a million people watch a movie on home theaters in an average group size of four people, for which the video costs $4, the movie would only gross ONE million. If the same people were to watch a movie in theaters, each paying for a ticket, that's a $15 million gross. If the studios stupidly think they're going to keep the same audiences in place and ADD phone/home people....I think they're sadly mistaken.

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Bobby Henderson
"Ask me about Trajan."

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 - posted 09-30-2014 09:39 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
Here we have yet another round of bean counter fantasy playing out in Hollywood board rooms. As usual the entertainment press (Variety in this case) has no clue regarding the perspective of theater operators or the very basic nature of race to the bottom economics.

The only thing the article got right at all was the need for theaters to step up their game in terms of presentation quality, although it sounded more like "theaters need to price gouge customers for more premium experience thingies."

I'm pretty shocked IMAX of all companies would be willing to get into bed with Netflix and the Weinstein Co. with this day and date scheme. If IMAX gets into the habit of supporting these kinds of releases, and if any of those releases are major, I could see exhibitors like Regal retaliating by pulling IMAX-branded equipment and signs out of their theaters very quickly.

quote: Variety article
DreamWorks Animation CEO Jeffrey Katzenberg predicted earlier this year that theatrical windows would shrink to three weeks in the next 10 years, suggesting that audiences should “pay by the inch” to see a movie based on the size of the screen they watch it on.

“A movie screen will be $15,” he said, “A 75-inch TV will be $4. A smartphone will be $1.99.”

If a movie studio makes all three of those sized versions available at the same time the overwhelming majority of potential customers will choose that $1.99 version. Simple as that. If they turn that idea into the standard release model you'll see nearly every movie theater go out of business within maybe a year or two, tops.

I'm not even sure how one could "tax" a viewer based on screen size. The average 75" HDTV set and most new smart phones both have 1080p HD resolution displays. It's easy for most anyone to duplicate their smart phone display on their TV set using a HDMI cable.

quote: Eric Handler in Variety article
“We believe there are a number of relatively small sized budget films ($15mn-$30mn) which could draw an audience via Netflix without impacting exhibition industry grosses,” wrote Eric Handler, an analyst with MKM Partners, in a note to investors. “In fact there are hundreds of films every year that bypass theatres and launch direct to DVD/VOD.”
Let's see Hollywood try this experient with one of their really big movies, something with a $200 million production budget. If they're so sure about this scheme let's see them really take a chance with it instead of a throw-away movie being released in the dregs of late August.

That industry analyst Variety quoted mentioned the fact lots of movies bypass theaters and go direct to DVD or VOD. Of course he didn't point out any real hits among all those direct to video movies.

quote: Frank Cox
I remember reading a very insightful comment somewhere (maybe here?) stating that without theatres, movie companies are just television studios without a channel.
I've repeated that comment at least a couple times here. Essentially that is what movie studios would reduce themselves to being if they screw up and kill off the theatrical end of the movie business.

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Mike Blakesley
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 - posted 09-30-2014 10:34 PM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
What I hate is the theatrical industry is always painted as whining "bad guys" in this whole scenario. "Theaters were fiercely opposed" is a phrase that pops up frequently. This is always followed by some studio flunky saying "We all realize the best way to see a movie is in theaters." WELL THEN QUIT TRYING TO DESTROY THE THEATERS, you idiots!

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Justin Hamaker
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 - posted 09-30-2014 10:49 PM      Profile for Justin Hamaker   Author's Homepage   Email Justin Hamaker   Send New Private Message       Edit/Delete Post 
They say theatres need to step up their game in terms of presentation quality. However, they keep trying to marginalize theatres, which means there is less money available to keep the theatre up-to-date while still paying to keep the lights on. At some point the margins are just going to get too small for many small market theatres to stay in business. Unless you live with in reasonable driving distance to a major market, seeing a movie in the theatre will become a thing of the past for many people.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 09-30-2014 11:47 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
Hell, the way things are going most people won't be able to visit an actual store that sells/rents movies and sells other kinds of entertainment (music, games, books, etc.).

Not only are movie studios trying to marginalize theaters, taking ever more of the "pie" for themselves, but they're also trying to cut out video stores and retailers too. They've quietly declared war on physical media. Lately new movies are getting released as digital downloads weeks ahead or even a full month ahead of the Blu-ray release. Lots of people are only too happy to wait a month after the Blu-ray/DVD release so they can stream it on Netflix for dirt cheap.

Hastings runs the biggest video store here in Lawton. I don't know what their financial situation may be, but crowds have been very much on the light side there for the past couple years. The store is trying to do what it can to compete, like matching Redbox on rental pricing yet offering a much larger variety not to mention it stocks all sorts of other stuff (books, comic books, games, etc.), has reading areas, free WiFi, etc. Even with all the effort the store just doesn't have very many customers inside whenever I visit. I have a bad feeling I'm going to drive over there one of these days and find it closed for good.

Just what the hell are these movie studios trying to accomplish? Be nothing but content providers to Netflix, Amazon Prime and Hulu+?

I'll need to put on a tin foil hat for this next bit:

Sometimes I wonder if certain powers that be are deliberately screwing up the movie business, like a slow form of sabotage. Not everyone likes the movie business or even the entertainment industry at all. There are certain wealthy, powerful people in this country who would not mind seeing "Hollywood" go belly up. They would be perfectly happy with the entertainment industry being a TV-only thing. I wonder about this stuff since other much larger companies now own all the big movie distribution companies.

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Martin McCaffery
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From: Montgomery, AL
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 - posted 10-01-2014 08:21 AM      Profile for Martin McCaffery   Author's Homepage   Email Martin McCaffery   Send New Private Message       Edit/Delete Post 
quote: Bobby Henderson
Just what the hell are these movie studios trying to accomplish? Be nothing but content providers to Netflix, Amazon Prime and Hulu+?
Umm, yes.

Since they got in the biz too late to be their own Netflix, Amazon, etc, the next best thing is to be the provider until such a time one of the beast assimilates the other. Synergy. Resistance is futile, etc.

Is Hulu still part of NBC/Universal? Vertical integration returns and no Justice Dept anti-trust unit is going to give a damn this time.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 10-01-2014 10:25 AM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
According to Wikipedia:

quote: Wikipedia page for Hulu
Hulu is a joint venture of NBCUniversal Television Group (Comcast),[6] Fox Broadcasting Company (21st Century Fox) and Disney–ABC Television Group (The Walt Disney Company),[7] with funding by Providence Equity Partners, the owner of Newport Television, which made a US$100 million equity investment and received a 10% stake.[8] In October 2012, Providence sold its 10% stake in Hulu.
The page mentions viewer numbers for Hulu being in steady decline and that various partners are looking for a buyer.

Obviously Netflix is, by far, the market leader for subscription-based streaming video services. I don't know how well other competing services like Amazon Prime, Redbox Instant, Vudu & Apple TV are doing compared with Netflix.

I expect some consolidation to take place -or just some of those competitors to fail. Another thing I expect is content providers demanding more and more money from Netflix and pushing them to raise subscription rates.

This year the U.S. pay TV industry recorded its first ever net loss of subscribers. This is clear evidence that a growing percentage of the population is "cutting the cord." I think some viewers have been forced to do that. Cable and satellite TV providers have been price gouging customers for the past few years and doing so in a struggling economy.

My Dish Network bill is nearly double what it was four years ago and I don't have as many channels as I did in 2010. If I didn't like live sports broadcasts and certain programs on HBO so much I'd get rid of the service.

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Lyle Romer
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 - posted 10-01-2014 12:35 PM      Profile for Lyle Romer   Email Lyle Romer   Send New Private Message       Edit/Delete Post 
quote: Bobby Henderson
This year the U.S. pay TV industry recorded its first ever net loss of subscribers. This is clear evidence that a growing percentage of the population is "cutting the cord."
Of course nobody is literally cutting the cord because they need the internet connection "cord" to watch the streaming services. What will probably happen that the idiots in the studio executive offices don't anticipate is that ISPs will raise prices.

Therefore, all that the studios will have accomplished is getting more people to watch via Netflix where the studio gets a smaller cut while allowing the large ISPs to make additional profit without having to give the studios any cut.

For studios, the most profitable thing would be to eliminate home video period and have movies play in theatres only. At the same time, work with the exhibitors to lower the percentage by 10% or so but do it contractually in a way that forces the exhibitors to lower ticket prices a little bit in return and make it more affordable.

They could make a lot more money by increasing the high margin way of seeing a movie than they ever can by pushing everybody to pay $1.99.

I know that isn't realistic but the problem is that especially since Redbox appeared, they are devaluing their content.

Why would a studio ever push things to Netflix anyway? Netflix is only charging $9 a month. The content provider revenue share has to be divided thousands of ways. How much is Weinstein going to end up with?

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 10-01-2014 02:03 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
The executives at movie studios, or excuse me, the executives running the movie studios' parent corporations, are only interested in whatever scheme can be cooked up to give them more money faster. They care far less about one component of the entire business (movie theaters) than they do the overall big picture view of the business.

I don't see media companies ever bringing back the traditional long theatrical release window. I think they would rather see the movie industry fail than do something like that.

Media executives fail to see domino principal involved in the movie business. One domino leans on another and then another in a natural, linear cascade. They think they can make just as much money and make all that money faster by removing some of the dominoes from play or stacking them parallel to each other in an attempt to speed up the process. But that doesn't work.

These executives still want to push these schemes anyway because they're funding lots of movie productions and other operations with huge sums of money that's borrowed, leveraged or whatever. They want that debt paid off as fast as possible. Because they not only plan to make even more money with these schemes, but they plan to do it paying as little interest as possible, which equates to more positive cash flow and more profit. It's an accountant's wet dream -and pure fantasy.

In trying to force the life cycle of movies through far shorter, faster periods of time these guys are ultimately going to make less money and make the movie business a lot smaller, if they don't destroy it completely.

The commercial movie theater is the primary gateway and visual touch tone people associate with movies. If you don't have a viable movie theater industry you have no movie business period. It's all TV otherwise. The damned executives can't figure out that truth. All they need to do is look at what people are watching the most on video. It's not movies as much as it is TV. Most Netflix customers binge watch TV series. They watch content that was tailored for TV. I personally rarely ever watch movies streamed via Amazon Prime. I'll go rent a movie on Blu-ray from Hastings, but if I fire up Amazon Prime or HBO GO I am mainly doing so to catch up on some TV show. Speaking of which, does anyone know when Sons of Anarchy Season 6 is going to get on Netflix and Amazon Prime? I have a handful of Season 7 episodes sitting on my DVR and I can't watch those until I'm caught up on Season 6.

Ultimately these media corporation big wigs are plotting on one thing: monopoly. They're buying up every part of the media puzzle, and Internet service providers figure into that. Comcast owns NBC/Universal.

More tin foil hat time: maybe these media guys are trying to screw up the movie theater business enough so the companies become unprofitable and their stock takes a nose dive. The media corp. guys will act like they're riding to the rescue to "save" the movie theaters and convince the Securities & Exchange Commission as well as the Dept. of Justice that movie studios need to own movie theater chains wholly once again. Then the media companies will be able to have complete vertical monopolies (movie studios, movie theaters, broadcast/cable networks, ISPs, radio stations, etc.). It's only a matter of time before Netflix gets bought by a major media company or Netflix buys one of them.

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Mitchell Dvoskin
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 - posted 10-01-2014 03:57 PM      Profile for Mitchell Dvoskin   Email Mitchell Dvoskin   Send New Private Message       Edit/Delete Post 
> convince the Securities & Exchange Commission as well as the Dept. of Justice that movie studios need to own movie theater chains wholly once again.

I believe that many of the circuits that were subject to the Paramount consent decrees were released from those restrictions about 10 years ago (maybe more). They convinced the Justice dept that the exhibition industry has now changed so significantly do in part to large multiplexes, that they could no longer monopolize the business even if they wanted to. If memory serves me, this goes back to when Sony purchased Loews Theatres while owning Columbia Pictures.

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Marcel Birgelen
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 - posted 10-02-2014 05:15 AM      Profile for Marcel Birgelen   Email Marcel Birgelen   Send New Private Message       Edit/Delete Post 
Adam Sandler just signed a 4-movie exclusive deal with Netfix.

quote:
Proclaims Sandler, "Let the streaming begin!!!!"

Snagging one of the world's best-known Hollywood stars, Netflix has signed a deal to make four feature films with Adam Sandler as the streaming service continues its empire building and moves into producing original movies that bypass the usual theatrical release.

As long as only the crappy directors and actors sign exclusive deals with Netflix, Hulu and whatnot, I only see bright sides. Heck, it might even get some quality back into theatrical movie releases.

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Edward Havens
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 - posted 10-03-2014 09:27 PM      Profile for Edward Havens   Email Edward Havens   Send New Private Message       Edit/Delete Post 
Of course, for every instance one can find proof of more window collapsing, one can also find proof of the window getting stronger. Marvel and Disney waited five months to release Captain America: The Winter Soldier on Blu-Ray and DVD, and it will be five months between theatrical and Blu-Ray/DVD for Guardians of the Galaxy. Lionsgate is waiting almost a year between releasing A Madea Christmas on DVD after theatrical. Mr. Peabody and Sherman, seven months. Maleficent, five months. Dawn of the Planet of the Apes, 22 Jump Street, How to Train Your Dragon 2, all five months each. In fact, the Blu-Ray/DVD release window has grown in the past year, from less than 100 days to nearly 120 days.

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Bobby Henderson
"Ask me about Trajan."

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From: Lawton, OK, USA
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 - posted 10-05-2014 04:42 PM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
Edward, you might want to double check things about that increased window.

If the window between theatrical release and Blu-ray/DVD release is increasing in lenghth at all (which I doubt), it's only because Hollywood movie studios are giving "HD Digital" movie downloads more of an exclusive window on its own.

In the case of Captain America: The Winter Solider, the digital download version was available for at least a month ahead of the Blu-ray/DVD release. Lots of movie releases are going this route, attacking physical media formats and traditional retail channels in the process. Clearly, Hollywood studios want no retail "partners" and want any home video customers buying directly from them via a download that costs them little if anything. Hooray for more profit.

In the case of the Madea movie and Peabody & Mr. Sherman, that's 100% all about the holiday shopping season and those specific movies tying into that season. Those movies would probably sell/rent better during that time rather than releasing them sooner.

But then again, there's a big difference between paying $20+ for a virtual movie download versus waiting a few weeks longer for it to show up on Netflix.

I don't think the movie studios and TV networks understand much about the general public and its ability to wait longer to get something at a much cheaper price (or for free).

Some of their "make them wait" practices can arguably be backfiring on them too. FX Networks is currently airing the final season of Sons of Anarchy on the FX network. But the previous season still isn't available on Netflix or Amazon Prime Instant Video. The Blu-ray/DVD box set of SOA Season 6 was released just 1 week before the Season 7 debut. They're basically forcing a lot of people trying to catch up on the series to DVR "time-shift" watching all those new season episodes until the previous season finally becomes available to stream near the end of this month. I'm in that camp. Haven't seen Season 6 yet, even though a couple ass-hats spoiled a couple big things in it for me. Ultimately here's the problem: FX should be wanting viewers to watch the new season episodes in their original airings that way they can see all the TV commercials that air which help pay for the show. Unfortunately for FX, when I am finally able to watch those shows on my DVR I am going to fast forward past every commercial I see. Great job on that window strategy FX!

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