3D films and DVD release dates have been high on the agenda at ShoWest
By Tim Masters
Entertainment correspondent, BBC News
A hot topic in Hollywood right now is how long cinema audiences should wait until they can watch a movie on DVD.
The subject has been high on the agenda at the ShoWest convention in Las Vegas this week as the industry grapples with the impact of home cinema systems and changing viewer habits.
The issue was thrust into the spotlight last month when the Odeon cinema chain threatened to boycott Disney's Alice in Wonderland in the UK, Irish Republic and Italy.
Disney wanted to release Tim Burton's 3D fantasy on DVD at the end of May - three months after it opened in cinemas.
In the UK, the usual window for theatrical release is 17 weeks. Ten years ago the gap was six months.
Johnny Depp plays the Mad Hatter from Tim Burton's film
Odeon reversed its decision after reaching "an enduring agreement" with Disney.
Actor Michael Sheen, who played the White Rabbit in Alice, described the row as "a storm in a mad hatter's tea cup".
But the reduced gap has worried some cinema owners who fear that it will dent ticket sales as film fans wait for the DVD instead of paying for the big screen experience.
In a speech at ShoWest, Michael Lynton, chairman of Sony Pictures Entertainment, said the theatrical window was important, but the industry needed to adapt.
"Showing films in theatres is what makes a movie a movie," he said. "It's what makes stars stars. It's what makes films famous. It's what makes the public perk up and pay attention."
But he added: "It is clear from the changing economic model of our industry that we're going to have to re-evaluate the way in which the current window structure operates.
"To meet audience demand for entertainment when and where they want it, and to keep ahead of the pirates who will fill any void we leave, we've all got to be open to experimenting with new and different windows..."
World Cup effect
Richard Cooper, a senior analyst at Screen Digest, points out that Disney's actions over Alice in Wonderland doesn't necessarily mean that all windows will be shortened.
"What we've seen in the UK already indicates that it's only a handful of films that will see shortened windows - and it really will be to make the most of high sales points such as Christmas or Easter.
"The shortening of the window on Alice is largely so that it not only coincides with half term but also so that it misses the beginning of the World Cup - which historically has really dampened DVD sales."
Last month Disney told the BBC it was "committed" to theatrical windows, but there was a "need for exceptions to accommodate a shortened time-frame on a case-by-case basis".
According to Screen Digest, the "burn rate" of 3D films is a lot slower than 2D films - they continue to make money at the box office for a longer period. Nearly 30% of revenues are made after week four , compared to 16% on 2D films.
James Cameron's Avatar is the highest grossing film of all time
"What we've seen with Up and Avatar was the burn was far longer and this is almost irrespective of the number of theatres they are being shown in," says Mr Cooper.
This week, Twentieth Century Fox announced that the 2D DVD and Blu-ray version of Avatar would begins its global release on 21 April.
James Cameron's 3D sci-fi juggernaut was released in cinemas in December and is the highest grossing movie of all time, taking over $2.6bn (£1.7bn) globally.
Meanwhile, Alice in Wonderland has taken $400m (£262.4m) worldwide after just two weekends.
As well as cutting down on piracy, another reason why studios would like to see DVDs on the shelves sooner is to cut marketing costs.
"While it is in the cinema, the film acts as a very powerful marketing tool," says Mr Cooper. "That is a crucial part of the mix - the studios are trying to cut down on expenditure, now that package media sales are in decline worldwide."
The Cinema Exhibitors' Association, which represents the interests of around 90 per cent of UK cinema operators, says the Disney/Odeon row reflects wider-ranging efforts by studios to change "a key element of long-standing trading relationships".
"Cinema is not the music industry, where existing business models are widely seen as broken," it says, adding that UK cinema admissions have been steadily rising for the past 25 years.
3D televisions have gone on sale this year
"Many cinemas have invested huge amounts of their own money in improving the cinema-going experience, most recently through digital 3D. Without a clear window between a film's theatrical release and its release on other platforms, such as DVD, that investment is at risk.
"Significant changes to the release window could cause a marked reduction in cinema admissions, particularly for those smaller operators who can only play a film several weeks after it is released.
"Hundreds of cinemas up and down the country would be put at risk by any significant reduction in admissions," the CEA says.
Unlike the UK, France has a more rigid model concerning DVD releases. DVD, Blu-ray and digital video-on-demand releases are available four months after the cinematic release.
Screen Digest's Richard Cooper says: "This is one of the few places where there is an officially mandated release window, there's some very firm legislation in place in France. Everywhere else it is by negotiation."
And while the debate about DVD release windows goes on, a further element in the mix is the dawn of 3D television.
3D sets are already on sale in the US, and manufacturers hope to launch their products in the UK and Europe over the next couple of months.
Sky rolls out its 3D service to customers later this year.
"3D in the home is coming," says Mr Cooper, "but those TV sets are going to be a bit more expensive than the standard top of the range 2D HD TVs - and if people want to watch 3D films it is a question of buying into a 3D enabled Blu-ray player."