Cinema Only on DVD

The Lawless Digital Frontier: Only On DVD Part 3

Continued from Part 1 / Part 2

On the last episode of Only on DVD… Universal forced the theaters to reconsider he theatrical release window when it released Trolls: World Tour (2020) directly to VOD. The idle theaters had lost their leverage during the time of the COVID pandemic. In Part 2, I suggested that Universal CEO Jeff Shell only had to change consumer behavior to rewrite the theatrical release playbook. That’s because, legally, the studios could do whatever they wanted as long as the gambit paid financial dividends for their corporate ownership. 

A Hollywood Anti-Trust Primer

I say “legally” because once upon a time there could have been a legal challenge to Universal’s day-and-date release strategy. Since I love backstory, let’s rewind all the way back to the silent era when the Federal Trade Commission first began investigating the film companies for violations of the Sherman Antitrust Act of 1890. The major film studios produced the movies, printed and processed the film, distributed the finished prints, and owned many of the theaters in which the movies were shown. Under Sherman, this vertical business integration amounted to a de facto oligopoly (a business dominated by a small number of 800 lb. gorillas). The U.S. Justice Department couldn’t make their case until 1938, at which point they named the Big Five (Paramount, MGM, WB, 20th Century Fox, and RKO) and the Little Three (Universal, Columbia, and UA) as defendants. The case was settled in 1940 in a New York district court with a consent decree that required studio compliance by 1943 with certain conditions that limited the practices of block booking and blind buying.

Block booking: the licensing of motion pictures for exhibition in a block or group, with the licensee (the independent theater chain) being required to take an entire group of films or none at all. The book would generally include one desired feature along with B-grade features and shorts to pad the total.

Blind buying/booking: the independent theater chain had to schedule films based on the studio’s description alone. The studio would not provide an actual print for preview.

The independent spirit that led Mary Pickford (second from left) and Charlie Chaplin (second from right) to form United Artists with Douglas Fairbanks (left) and D.W. Griffith (right) caused them to co-found the Society of Independent Motion Picture Producers to help protect their interests in Hollywood. 

When studios didn’t voluntarily comply, the Society of Independent Motion Picture Producers (SIMPP) filed a lawsuit against Paramount’s United Detroit Theatres. Hollywood luminaries Mary Pickford, Charles Chaplin, Walt Disney, Alexander Korda, Orson Welles, David O. Selznick, Samuel Goldwyn, and Walter Wanger formed SIMPP to “advance the interests of independent producers.” The suit forced the Justice Department to resume prosecution of the original consent decree of which the studios were found non-compliant. At best, they merely tried to disguise their problematic business practices with larger blocks of films. Their best effort came when independent theaters begrudgingly agreed to an increase in block size from 5 films to 12 in exchange for the ability to decline to exhibit a film based on quality or content. 

SIMPP’s letter to the Attorney General’s office is well worth a read if you crave more detailed insight into Hollywood’s anti-competitive business model. 

The case reached the Supreme Court in 1945. In United States vs. Paramount Pictures, Inc. (1948), the court ruled against the studios 7-1. William O. Douglas delivered the “incontestable” conclusion that the studios had engaged in “bald efforts to substitute monopoly for competition.” The court rejected the notion that block booking was an essential component of their copyright. The fallout from the decision forced the studios to divest of their exhibition chains, which caused a dramatic increase in independent theaters and largely neutered the Hays Production Code. Formally codified in 1934 (after being largely ignored for seven years) and enforced by the rigid Production Code Administration’s public relations officer Joseph I. Breen, the self-adopted industry guidelines for acceptable motion picture content required each film to receive a formal MPPDA (Motion Picture Producers and Distributors of America) seal of approval. Among his many deeds in the name of Catholic decency, Breen infamously transformed Betty Boop from a flapper into an old-fashioned housewife.

The decentralization of the exhibition branch increased the number of independently owned and operated movie houses, and these “art house” theaters could exhibit foreign and independent films that fell outside the Production Code’s jurisdiction. Until this point, the studios had used their control over exhibition to prevent the import of foreign cinema. An influx of movies that challenged the Code’s strictly enforced gender roles and social prejudices flooded into the American market. The final nail in the Code’s coffin was the 1952 Supreme Court case, Joseph Burstyn, Inc. vs. Wilson, in which the Court ruled that movies were entitled to first amendment protection, preventing the New York State Board of Regents from banning Roberto Rossellini’s L’Amore (1948).

The Paramount ruling reconfigured the industry, ending the “golden age” of the studio system. With parallel ascendance of the medium of television, the majors mistakenly believed (in the long run at least) that the lack of exclusive theatrical arrangements would devalue their existing film libraries. Paramount, 20th Century Fox, and Warner Bros. sold or leased their catalogs to other companies for TV exhibition. Disney saw things differently, instead forming Buena Vista Film Distribution to become a holding company and in-house distribution unit. This paved the way for the construction of Disney’s theme parks and extremely profitable leap into television programming. 

Dixie Cup Disposability

I spoke to Anthony L’Abbatte, Preservation Manager at the George Eastman Museum, about the studios’ treatment of their back catalog. He suggested that Disney’s perspective differed because Walt Disney considered animation a more timeless medium, unlike how other studio executives and the moviegoing public viewed film in general. “Once you saw a movie,” he said, “you probably weren’t going to see it again. Studios cranked out 40-50 feature films a year. There was always new product. They were like Dixie cups. Use it once and throw it away. Unless it was a really popular title that they’d reissue every eight or so years, but that was a rare exception.” It wasn’t until the 1960s that a more concerted effort began to preserve old prints by converting them to safety stock for storage. Consider that only 20 years prior, companies like Universal were burning their silent nitrate prints to fuel on-screen fires in films produced during the 30s and 40s. The money men in charge of companies like Universal and RKO couldn’t see a future in which these films were more valuable than kindling – really combustible kindling – but kindling, nonetheless.

In 2022, we witnessed a return to this Dixie cup mentality that also simultaneously brought U.S. vs. Paramount (1948) back into the conversation. Even before the pandemic further shifted viewing habits toward the small screen, a multitude of streaming services began to pop up to service couchbound demand. Here’s a list of the major launches during this period:

Apple TV+ (November 1, 2019)

Disney Plus (November 12, 2019)

HBO Max (May 27, 2020)

Peacock (July 15, 2020)

Paramount Plus (March 4, 2021)

If you want to watch Hamilton (2020), you can only do so with a subscription to Disney+. 

Though methods of operation differ among the participants, the general business model for each is to provide unique, premium content to lure new subscribers and enough depth to maintain subscriber numbers. That last part is the bit everyone’s still trying to figure out. According to The Wall Street Journal, half of the new subscribers to Disney+ who joined for Hamilton (2020) unsubscribed within six months. The same statistics held for HBO Max and Wonder Woman 1984.

Viewers tethered to their homes and scrubbing grocery items with alcohol wipes readily adapted to the streaming convenience – devouring content and moving on to the next service like locusts. This includes content fueled by studios’ back catalogs and newly produced TV series and movies, many of which made their debut on streaming – not on broadcast TV or in theaters.

It wasn’t until HBO Max, with little warning, purged dozens of titles from their service in August of 2022 that many of these new viewers became aware of the hazards of plenty. The purge included 20 original HBO series, 2 movies, and a bunch of Cartoon Network programming – including Infinity Train, Generation Hustle, Close Enough, and The Not-Too-Late Show with Elmo just to name a few. People enjoying the shows at their own pace were just out of luck. Only a few had accompanying physical media releases; many existed only on HBO Max. I know it seems obvious, but the fact bears repeating: the only way you’ll ever be sure to have access to the shows you love is by owning a physical copy. Unfortunately, this is becoming increasingly more difficult in the age of streaming.

Tom Hanks and Meg Ryan in Nora Ephron’s You’ve Got Mail (1998).

Viewers looked to the streaming overlords and asked them “Why?” To quote Tom Hanks’ Joe Fox in You’ve Got Mail (1998), “It’s not personal.” To which the public responded according to Meg Ryan’s Kathleen Kelly, “It’s personal to a lot of people. And what’s so wrong with being personal, anyway?”

Like I said in a prior Only on DVD episode, the entertainment business is indeed all business. Heartfelt pleas of devoted fans don’t keep the servers running. Keeping titles on a streaming platform isn’t free. The parent company pays residuals to the creators, cast, and crew. Once a show’s residual cost exceeds its value in viewer engagement (a constantly sliding variable), that title disappears. It becomes that little paper Dixie cup. And as a purely digital enterprise, it doesn’t even have the marginal value of fueling new on-screen fires for early talkies.

Without a push to distribute physical media, I asked Anthony L’Abbatte, what could be the hazards of a streaming-only environment from the perspective of a preservationist? Was there a chance, however unlikely, that we could lose some of this content forever? He paused for a moment before agreeing that parallels were beginning to form between now and the 1920s and 30s, when studios discarded thousands of original film elements. “If they’re not on top of a good a migration program and constantly transferring properties to improved hard drives and storage solutions, some of these films might disappear. It could be a problem going forward.”

Arriving Again at the Start

If you’ve been putting the pieces together, this is where you might begin to ask questions. The questions might not be fully formed because, by and large, we’re film fans, moviewatchers, and cinephiles. We look at movies through the lens of passionate appreciation. When I first started digging into how the pandemic affected the business of film distribution, I wanted to know how the production studios had so easily avoided the 1948 Paramount decision. They seemed to be once again creating a vertically integrated business model with their own streaming services standing in for theatrical exhibition – the exhibition tier that had been stripped of them in 1948.

Tong Po in Kickboxer (1989) might be a questionable analogy for the utility of the U.S. vs. Paramount Supreme Court decision, but I’m highly amused by the villain of a Jean-Claude Van Damme movie being a figurative heavy in a theoretical match between the studios and theater chains.

When theater chains threatened to boycott Universal’s films after the studio tried to narrow the release window to 30 days, they had the Supreme Court decision standing silently in their corner, looking menacing and dipping its resin-laden fists into a bucket of broken glass, a la Tong Po (Michael Qissi) in Kickboxer (1989). When they released Trolls: World Tour during the pandemic, Universal had the overwhelming support of parents who’d run out of quarantine crafting activities. This time, however, U.S. vs. Paramount (1948) sat on a stool, reading the trade papers in search of employment, and shrugged. The U.S. Department of Justice had formally filed a motion to terminate the United States vs. Paramount ruling on November 22, 2019, stating that it was “unlikely the Defendants can reinstate their cartel.” Though vehemently opposed by the theater chains, the Independent Cinema Alliance, and independent filmmakers; the Court granted the motion without contestation or much publicity. Under the cover of night, aka the pandemic, the DOJ had eradicated the safeguard assuring the continued viability of our brick-and-mortar theaters. We don’t know if streaming platforms would have been deemed a violation of the Paramount ruling. Objectively speaking, however, there’s more than just a passing resemblance. In 2022, Paramount or Netflix or Warner Bros. is allowed to produce a movie and then distribute that movie directly to its own streaming service for exhibition. That movie may not appear anywhere else, not even on physical media.

I don’t want to suggest that theaters will be shuttered by next Tuesday. The big studios still need theaters, at least for now, but the future’s a little muddier. As consumer behavior shifts and the current trends continue, fewer and fewer movies will appear in theaters. Anything other than the largest tentpole blockbusters or Oscar-seekers could opt instead for streaming premieres. The movies will live for a time on a particular service and then, one day, they won’t. Will we still see physical DVD releases for movies that only ever existed on the Internet? I asked this very same question to Anthony L’Abbatte at the end of our conversation. “It’s maybe too new to tell,” he said. “The public will likely be losing physical media because the studios want the most control over the content.”

I’ll crack open a few recent case studies and play prognosticator in Part 4: What We Learned from Irwin M. Fletcher and Benoit Blanc.  

Jon Hamm in Confess, Fletch (2022).

I would like to thank Anthony L’Abbatte, Preservation Manager at the George Eastman Museum for taking time to field my questions. Each year the Eastman Museum plays host to The Nitrate Picture Show, four days of beautiful nitrate prints projected onto the big screen at the Dryden Theatre.

Cinema Only on DVD

The Release Window and Significant Shrinkage: Only on DVD Part 2

Continued from Part 1

This might seem obvious, but the business of moviemaking has and will always remain a for-profit enterprise. Starting with the very first Nickelodeon in Pittsburgh, PA, entrepreneurs smelled financial opportunity in the moving pictures business. In a few short decades, moguls like Louis B. Mayer (MGM), Adolf Zukor (Paramount), Daryl F. Zanuck (20th Century Fox), and Harry, Jack and Albert Warner (Warner Bros.) had capitalized on that latent potential. In 1929, just before the Great Depression, industry revenues eclipsed $720 million (and wouldn’t match that number again until 1941). It might sound obvious, but as much as we look at films as an artistic product of the creative filmmaking process – they have and forever will be a big business run by moneymen, fueled by numbers, slave to the ledger.

But… let’s discuss new business before going back to old business.

Only on DVD Part 2: The Release Window and Significant Shrinkage

Streaming has become the industry’s latest uncharted revenue source. In a few short years, streaming and video-on-demand has supplanted physical media as the go-to method of viewing movies at home. While the pandemic accelerated the transition from physical to digital, the shift began way back in 2007. 

2006 represented the most lucrative year for DVD sales, with approximately $16.3 billion in revenue, but the medium began a rapid decline in the years following. Two major factors caused the downturn. An economic recession triggered a cut in entertainment spending. Without a Blockbuster on every corner, video-on-demand (VOD) became an increasingly more attractive option for remote, penny-pinching consumers. VOD costs about $4 for a rental and $10 for purchase compared to a $15 DVD or Blu-ray disc. Digital also offered more immediate gratification – buy and watch a movie without ever leaving your couch – and there’s very little that the average American likes more than cheap and instant.

The tentative embrace of VOD ushered in the first wave of subscription streaming services. Netflix tripled its subscriber base between 2007 (7.48 million subscribers) and 2011 (23.53 million). Digital consumption rose as physical media fell precipitously. The two mediums crossed paths in 2014, around the $5 billion mark. Without diving too deep into the numbing numbers, we’ll summarize the trends with this fact: physical media revenue accounted for less than 10% of the home video market in 2020, the year COVID rewrote the rule book.

And Then the Theaters Went Dark

Streaming media received a substantial boost from the pandemic, pulling money from the closed and incapacitated theaters. Projections of $5 billion in losses hung over largely idle exhibition chains. Variety called 2020 a “dumpster fire” for theatrical exhibition, and while 2021 and 2022 have shown some box office vigor, business is still down approximately 60% from pre-pandemic 2019 levels. The most alarming statistic: 50% of pre-pandemic moviegoers said they had no plans to return. 9% said they’d never go back – COVID or not. For an industry already on the ropes, these numbers are a poor harbinger of things to come.

The abrupt closure of theaters forced Disney to come up with a creative solution for Onward (2020).

When the theaters closed during the pandemic, studios scrambled to find a way forward. In the absence of the tent, what does one do with tentpole movies? Disney/Pixar’s Onward opened on March 6, 2020, days before the shutdown. Disney responded by sending the film directly to VOD to recoup some of its $180 million budget. Paramount pulled Top Gun: Maverick from the schedule, ultimately releasing it in May of 2022. For James Bond, April 2020 turned into November 2020 turned into October 2021. Warner Bros. used Wonder Woman 1984 to launch HBO Max, making it one of the first “day-and-date releases” of the pandemic – a movie released on simultaneous platforms (usually theatrical and streaming) on the same day.  

If you’re keeping score at home, “day-and-date” means there’s no release window, the time between the release of the film in theaters and its appearance on home video platforms. Studios surveyed the income resulting from VOD and streaming distribution and promptly went about negotiating their theatrical agreements. Studios knew they needed theaters less than the theaters needed the studios. 

But studios still need theaters for big openings. They need theaters because they still need that big-top tent. Spider-Man: No Way Home, Top Gun: Maverick. Dr. Strange in the Multiverse of Madness. The Batman. F9: The Fast Saga. What do all of these movies have in common?

They’re among the few that bathed like Scrooge McDuck in theatrical money during the pandemic – and they’re also all franchises. Due to the overwhelming success of just a select few megamovies, the news media has cautiously celebrated the phoenix-like resurgence of the theater. Tom Cruise filmed a pre-movie introduction to Top Gun: Maverick thanking us for returning to view his movie as it should be seen. Big and loud. He’s gracious – but he’s a savvy businessman. As arguably Hollywood’s last true movie star, he understands perfectly how to commoditize himself and sell movie tickets. So, no, the value of the theater isn’t lost on Hollywood – but the reason Hollywood needs the theater has morphed into something that’s less black and white than straight box office totals.

The Barriers to the Zero Release Window 

I saw Ghostbusters (1984) in the theater four times during its original theatrical run. Pulp Fiction (1994) five. Popular movies became cultural phenomena in part because they would linger in theaters for months, sometimes a whole year or more. We saw the movie and then we dragged our friends to the movie and then we dragged some other friends to the movie and then it played in the second-run theater and we went back with whomever wasn’t sick and tired of us talking about it. 

Steven Spielberg’s E.T. The Extra Terrestrial (1982) dominated 1982, more than doubling the box office of second place Tootsie (1982). 

Let’s look at the case of Steven Spielberg’s E.T. The Extra Terrestrial (1982) as ground zero. Released on June 11, 1982, the movie set a weekend record for ticket sales in its fourth week of release. It was the #1 movie in the U.S. as late as December and remained a top ten box office earner uninterrupted until March of 1983. It wasn’t made available to purchase on home video until 1988 when it was released simultaneously on VHS and laserdisc and sold 15 million VHS copies, contributing to a gross of more than $250 million in revenue. 

Once sell-through VHS tapes became more common during the late 1980s and the home video market became more lucrative, the theatrical window narrowed significantly to capitalize on all theatrical buzz, thereby reducing marketing costs. Fast forward to 2019. The massively successful Avengers: Endgame dominated the pop-culture landscape. It opened on April 26 with an almost incomprehensible $473 million but fell out of the top ten in its seventh week of release and basically disappeared from first-run theaters by the middle of July. It was released on DVD and Blu-ray on August 13, 2019. Release window: 4 months. 

Six year release window became six months became six days. 

Studios consider opening-weekend box office the final word on a film’s marketability. As soon as attendance dips, they’ll shuffle the movie along to be consumed via physical media, VOD, and streaming customers. If a film doesn’t open big, it’s not offered the opportunity to build word-of-mouth; another movie opens in its wake and the cycle continues. The industry churns through content because it assumes that the opening weekend makes the money, the rest of the weekends a movie just takes up space. This shift happened over the course of more than 30 years, but I’m compressing time to prove a specific point. A movie’s theatrical release still creates expectation and momentum – even when nobody goes to see it. It differentiates this movie from the hordes of direct-to-streaming movies that get lost among the insurmountable volume of content. 

The forgettable Tower Heist (2011) may not have been the power play Universal thought. 

Universal tried to force a narrowing of the theatrical release window to 30 days for the movie Tower Heist (2011). Theaters threatened to boycott the film and potentially other Universal releases. The studio recanted and returned to the standard 90-day window. 

The pandemic, however, removed the theater chains from the equation, and the studios seized their opportunity to change consumer behavior. If they changed consumer behavior, that could change the rules of the game. When the pandemic forced theaters to shutter, viewers had no other way to view the movies they most anticipated. With no other exhibition alternative, the studios began feeding the movies directly to our televisions through streaming services and VOD, thereby bypassing the shuttered and stubborn theaters who were no longer standing in the way. The threat to boycott theatrical releases rendered suddenly toothless. 

It was once again Universal that pushed the envelope by releasing Trolls: World Tour (2020) directly to VOD instead of pushing back the release date to wait for theaters to reopen. This would be the ultimate test. Trolls: World Tour made more money in three weeks on a digital release than the original Trolls (2016) made during its entire theatrical run.

Without hesitation Universal CEO Jeff Shell declared this to be “the new normal.” “As soon as theaters reopen,” he said, “we expect to release movies on both formats.” Without open theaters to exhibit their movies, it makes perfect sense that studios would do whatever they could to recoup production expenses on their product. Shell went one stop further, declaring that even after the theaters return, this is now standard operating procedure. He stopped short of adding, with the uproarious cackle of a true supervillain, that there was nothing the theaters could do to stop him. 

But other than the pandemic what changed between Tower Heist and Trolls: World Tour? I’ll give you a hint: it involves the Supreme Court. 

Tune in Next Week to Find out in Part 3: The Lawless Digital Frontier

Only on DVD Recommendations:

Part of the struggle is wanting to watch a movie or a TV when it is available. Offerings change according to unseen financial whims and scheduling eccentricities. Today’s list, similarly, has been cobbled together through a most unusual grammatical lynchpin. Add these movies and TV series featuring a prepositional phrase from Netflix DVD today because you won’t find them anywhere else (legally and that I know about). 

Written on the Wind (Douglas Sirk, 1956)

Southern gothic melodrama and a choice prepositional phrase. Where is it written? On the wind. Familial dysfunction. Alcoholism. Oil and money grubbing. Based on a true story. It’s soapy daytime TV – except exquisitely shot by cinematographer Russell Metty (Spartacus, Touch of Evil) and acted by Rock Hudson, Lauren Bacall, Robert Stack, and Dorothy Malone. Malone would go on to win Best Supporting Actress at the Academy Awards. Of course, a Douglas Sirk production establishes a certain tone. Written on the Wind exaggerates and satirizes through a solemnly serious gaze. Some miss the humor entirely. Some consider it kitsch. For my money, however, it’s just a delicious confection that highlights the strengths of one of the great American auteurs. This one occasionally pops up on the excellent Criterion streaming service, but as of this post, it’s nowhere to be found. 

Pump Up the Volume (Allan Moyle, 1990)

Did I just highly recommend this movie in a post about “The Full Circle of Christian Slater”? I certainly did – but maybe if you knew it’s not currently available to stream (it was on HBO Max and then it suddenly wasn’t and then it was and then it wasn’t) it’ll inspire you to finally take action and watch this overlooked gem of a teenage drama. Shy high school student by day, shock jock Hard Harry by night – Mark Hunter (Slater) causes a stir by inspiring teens to speak up and act out against authoritative hypocrisy. He’s forced to deal with the real-world effects of his inflammatory words as the principal makes Hard Harry the scapegoat for everything wrong within the community. Even though it’s a 1990 time capsule, Moyle’s film has never felt more relevant. 

Tales from the Crypt (1989-1996)

I’m told we’re living in a new golden age of television programming, so maybe you’re feeling more like dabbling in a few seasons of HBO’s classic anthology horror program hosted by everyone’s favorite cackling sack of bones, the Crypt Keeper (from the Crypt, obviously). Except there’s one little problem. Tales from the Crypt has been relegated to that HBO purgatory in which Dream On, Spicy City, Not Necessarily the News, and The Hitchhiker now reside. There’s a wellspring of classic HBO programming that we just can’t watch… unless the powers that be saw fit to release episodes on DVD.