'Bubble' Vision

When "Bubble" comes out on Friday, it will be shown in Landmark theaters as well as HD Net TV (available only to owners of high definition televisions). "Bubble" DVDs will be available for sale through the usual retail outlets, as well as in theater lobbies including the E-Street cinema. (Wagner says he hopes in the future to have all of Soderbergh's DVDs for sale when one of his HD Net films is shown.) The filmmakers also say that "Bubble," set in an Ohio Valley doll factory, will be shown in non-Landmark theaters, which will receive 1 percent of the DVD earnings.

That 1-percent agreement, says Wagner, reflects his and Cuban's desire to rewrite the rules for exhibitors who have been subject to usurious terms on the part of distributors. "To me, we're being good partners," says Wagner, "which exhibitors have never had."

Historically, exhibitors have split box-office receipts with movie studios: The studios receive the lion's share of revenues during the beginning of a film's run, with the theaters' share increasing as the engagement lengthens. With that kind of ratio in place, theater owners understandably want to keep the theatrical window open as long as possible. That window has already begun to close; according to the National Association of Theatre Owners, the average length of time between a movie's theatrical and home video release has gone from 5 months and 22 days in 1997 to 4 months and 14 days in 2005.

"We don't think [the day-and-date strategy] is a good idea for studios, exhibitors or patrons," says Kendrick Macdowell, NATO's general counsel and director of government affairs. "Once you collapse windows, you're basically talking about a movie of the week."

"I can understand why they're [angry] about this," Soderbergh says. "But nobody's sitting down and looking at it from a macro point of view. We need to rethink the economics of the entire business from top to bottom. How we compensate talent, how we deal with exhibitors, how we deal with ancillary revenue, all that stuff, in my opinion, has to be rethought. How do you do that? How do you get all these people at the table and get them to stick to something that smells like a salary cap, or revenue sharing, in a free-market system where you have different people with different economic incentives?"

None of those questions will be answered when "Bubble" hits big and small screens next weekend. And the true test of the model will come when a mainstream movie with big stars is released day-and-date, a prospect Soderbergh says he would welcome with one of his "Ocean's Eleven" sequels.

But clearly things are beginning to shift.

In just the last six months, Disney CEO Robert Iger has said he could foresee a collapsed theatrical-DVD window, ABC and ESPN have announced plans for downloadable programs, and Peter Chernin, chief operating officer of 20th Century Fox's parent company News Corp., recently announced plans for the studio to release high definition DVDs of its movies a mere 60 days after their theatrical release.

In other words, the industry is changing. And unless filmmakers, distributors and exhibitors manage that change together, Soderbergh says, "it's going to be bloody."

"If things keep going the way they're going, you're going to see a more glamorous and sexy version of what's happening in the automotive industry in this country." As he speaks, the faded elegance of the Rust Belt town outside making his observations particularly poignant. "You know, people are stuck in this old way of thinking and the consumer is just going to pass them by."