March 12, 2007 / 8:26 PM / 11 years ago

Hollywood, foreign movie theaters at odds on DVDs

LAS VEGAS (Reuters) - Trouble is brewing between overseas theater chains and U.S. studios over how quickly films should be released on the DVD format, industry officials said on Monday.

Exhibitors and studios are at loggerheads over the shrinking of the time period between a movie’s theatrical and DVD releases, just as many U.S. chains have been critical of Hollywood for cutting the gap in a rush to sell DVDs and profit quickly.

Theaters say that slices into profits as moviegoers stay home.

Movie ticket sales outside the United States topped domestic box office last year, underlining the importance of foreign markets to Hollywood.

Worldwide box office sales rose 11 percent to $25.8 billion in 2006, including a 5.5 percent gain in U.S. sales to $9.5 billion, and a 14 percent jump in overseas sales to $16.3 billion.

Foreign theater chains are pushing for the widespread adoption of laws to block the shrinking of the distribution window, said Ad Westrate, president of the International Union of Cinemas (UNIC), which represents some 30,000 screens.

A French law that bans DVD releases within six months of a theatrical run would serve as the model, Westrate said.

“We are trying to implement this law in other nations,” he said. “Shortening the window is not the answer to piracy.”

But studios do not want that change.

Rather than placing arbitrary time limits on DVD releases, “the marketplace has to dictate those things,” Andrew Cripps, president of Paramount Pictures International told attendees at a Monday breakfast at ShoWest International Day, a movie theater industry conference.

Overseas theater owners and studios also are discussing how to pay for a roll-out of digital cinema, which doubled to about 2,500 screens in 2006 but lags behind the U.S. transition, Cripps said.

Westrate also said his group was calling for unified digital standards and financing models but believes the distributors should pay for the transition.

Cripps said studios were willing to consider paying a “virtual print fee” like that paid to U.S. exhibitors to finance the digital transition, which the industry hopes will reinvigorate moviegoing among consumers who have a growing number of entertainment options.

“A (financing) model that works for the international market has to be found,” he said.

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