Universal tests VOD market with 'Tower Heist' home debut three weeks after release

Will Ben Stiller and Eddie Murphy be the test that finally changes things?

<p>Ben Stiller and Matthew Broderick are two of the stars of 'Tower Heist,' which will hit VOD&nbsp;in Atlanta and Portland three weeks after it is released in theaters.</p>

Ben Stiller and Matthew Broderick are two of the stars of 'Tower Heist,' which will hit VOD in Atlanta and Portland three weeks after it is released in theaters.

Credit: Universal Pictures

The theatrical model I grew up with is dead.

Sure, theatrical release is still the first stop for studio films, for the most case, but the window between when something plays in a theater and when it arrives at home is shrinking rapidly, and today, Universal Pictures unveiled a startling plan to bring the big-budget comedy "Tower Heist" to VOD a mere three weeks after it hits theirs on November 4.

They're going to be testing the idea in Portland, OR and in Atlanta, GA, and it's got a steep ticket price.  $59.99 is more than any typical PPV movie charges, but it's not typical in any way.  If this does work, it could change the way studios handle big-ticket releases, and I would bet they'll telescope the release dates even more.  If they can get people to pay $60 a pop to sit at home and watch a big new release, why not do it on opening weekend?  Why not go ahead and start at day one?

This is not a new idea, of course.  I remember in 1983 when Universal tried a similar experiment through cable services for "The Pirates Of Penzance."  At that point, it was only in one market, and only through a service called SelecTV, but the idea was the same.  Simultaneous home and theatrical releases do not play well with theater owners for obvious reasons.  As home theaters get better and better and prices on Blu-ray players and giant screens keep falling, it is probably good that theater owners are afraid, because many people are opting out of the theatrical experience altogether.

It's a strange time for the entire industry.  Companies that adapt are going to do better than companies that dig in their heels out of fear, which is what happened in the spring when Universal and other studios tried a similar idea with DirecTV and a 60-day window between theatrical and VOD.  That was at a lower price point, too.

"Tower Heist" is a big movie for Universal, their biggest holiday release, so this is a real test.  Three weeks means the movie will still be onscreen in almost every major market.  What I'm really curious about is how widely this will be promoted in those markets, and what effect, if any, it has on the first weekend's gross in those markets.  Will people stay home thinking they can just see it a few weeks later?  Or will they even know about this test?  According to the story in the LA Times, Universal is offering to compensate exhibitors if they lose significant ticket sales, but I'm not sure how they're planning to measure that or determine what they owe.

What I'm really curious about is what backlash there might be from theater owners.  They don't have to play "Tower Heist," and if they really wanted to push back against Universal's idea, not booking it in any Portland or Atlanta theaters would be the way to accomplish that.

Still, all of this is hypothetical, and until they play out the experiment, there's no way of knowing how consumers and companies will react.  One thing's for sure, though… the entire industry will be paying very close attention.

"Tower Heist" arrives in theaters November 4, 2011.

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