Studios' premium VOD claims untrue-exhibitors
* Theater owners say studio premium VOD claims untrue
* Nat'l Assoc Theater Owners say will hurt revenues
* Theaters, studios have not discussed recently
By Sue Zeidler
LOS ANGELES, Nov 15 (Reuters) - Several big studios have said they plan to soon offer films at home while still playing in theaters -- but theater owners say it is not true.
"They're trying to create an air of inevitability that doesn't exist. I believe opinions are all over the map on this and I don't think it's anywhere near decided that they will do this anytime soon," said John Fithian, president of the National Association of Theater Owners (NATO), who said such a move would hurt box office revenues and promote piracy.
Studios have previously riled exhibitors by disrupting release schedules, also referred to as theatrical windows.
Earlier this year, theaters threatened to yank Walt Disney Co's(DIS.N) "Alice in Wonderland" from screens after Disney moved to release "Alice" on DVD three months rather than four months after its theatrical debut. While theaters feared Disney's action would discourage people from going to theaters, it became one of the highest grossing films of 2010.
Some theaters did actually pull Sony's "Cloudy With a Chance of Meatballs" from screens after Sony said it would release it to its Web-connected TVs a month before its DVD.
Fithian told Reuters on Monday he was shocked this month when Time Warner (TWX.N) CEO Jeff Bewkes said he expects to start offering movies in a premium video-on-demand window, while still playing in theaters, by the second quarter.
He noted it is particularly surprising studios would try to disrupt exhibition partnerships after box office revenues hit $10.6 billion in 2009, surpassing domestic home video revenues of $9.34 billion, and as the industry spends billions of dollars in digital upgrades for the growing 3-D film pipeline.
When he heard Bewkes remarks, Fithian quickly contacted the exhibitors in his group to see if they had been contacted about this radical change in movie distribution practices.
"The answer was a deafening no," he said, noting there have been no meaningful discussions on the matter since the summer.
Amy Miles, CEO of theater operator Regal Entertainment Group (RGC.N), concurred. "At this point in time, not one studio has come to us with a specific proposal we can evaluate," she told Reuters on Monday.
Nevertheless, several studios are looking into the premium video-on-demand window. Walt Disney Co's (DIS.N) chief executive Bob Iger has said the media giant will become aggressive in experimenting with new windows, including an early video-on-demand opportunity.
And sources familiar with the matter say Sony Corp (6758.T) and Universal Pictures, a unit of General Electric's(GE.N) NBC Universal media division, are also eyeing similar plans.
Industry sources have said studios are mulling charging from $30 to $50 to give people the ability to watch films at home about a month or two after debuting in theaters.
"We will help lead the industry to launch a premium video-on-demand service that will enable consumers to watch recently released theatrical movies at home in high definition and eventually in 3D. We're near agreement with our distributors on the right window and the right price point," Time Warner's Bewkes told analysts on a conference call.
No titles have yet been announced, but analysts cite upcoming Warner films like "Hangover 2," or "Green Lantern" as movies that might be right for a higher priced home setting.
In addition to irking theater owners who fear losing ticket sales, other studio partners like DVD providers Wal-Mart Stores Inc (WMT.N) to rental outlets like Netflix Inc (NFLX.O) and Coinstar Inc's (CSTR.O) Redbox would feel the impact of a new premium video on demand window, analysts said.
Fithian declined to speculate on what theater owners might do if studios move ahead without their input, only saying it would be a company by company decision.
Barton Crockett, analyst with Lazard Capital, said he believes theater owners will ultimately get their say and pay in the matter. "Theaters will try to use this as negotiation leverage, saying they should get a larger cut of movie tickets or something. And if you're a big studio, you want to make sure theaters are carrying your movies," he said.
(Editing by Bernard Orr)
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