America’s movie studios and theater owners are starting to sound exactly like the Democrats and Republicans, fighting over — well, everything.
As you might remember, the studios had a nasty showdown with exhibitors this year when, with hardly any warning, they launched the much-ballyhooed Direct TV premium video-on-demand experiment. It was a flop, since hardly anyone wanted to pay $30 for the privilege of seeing a bunch of second-rate films 60 days after their theatrical releases.
Even so, exhibitors were furious, because the experiment looked like another effort to whittle away the time between a film’s theatrical opening and its DVD release, a window that exhibitors are fighting tooth and nail to preserve.
Now, Sony has launched another salvo, announcing Tuesday that it plans to stop subsidizing 3-D glasses, starting with the release of the studio’s two 3-D blockbusters next summer, “Men in Black III” and “The Amazing Spider-Man.” The National Association of Theater Owners was quick to fire back, saying it “believes Sony’s suggestion is insensitive to our patrons, particularly in the midst of continuing economic distress. Sony’s actions raise serious concerns for our members who believe that provision of 3-D glasses to patrons is well-established as part of the 3-D experience.”
The theater owners group reminded Sony that “since the onset of the digital 3-D revolution in 2005, it has been understood that exhibitors would bear the weight of technological and facility modification costs related to 3-D, while distribution took on the cost of 3-D glasses. . . . Sony would be well advised to revisit its decision.”
The exhibitor organization left the threat at that. It probably didn’t need to remind anyone that in 2009, when 20th Century Fox announced that it wouldn’t pay for 3-D glasses, starting with the release of “Ice Age: Dawn of the Dinosaurs,” the blowback from theater owners was so fierce, the studio had to relent.
So what will happen this time around? Or put it this way: Who has the most leverage?
Being an exhibitor is not an especially great business. Profit margins are slim, so theater owners have to fight for every penny. Insiders predict that the three big exhibition chains — AMC, Regal and Cinemark USA — will individually say this to Sony: You might think you have the leverage, because you have two huge summer movies in 2012. But if you expect us to foot the bill for 3-D glasses, then when it comes to splitting the take on “Men in Black,” instead of giving you 50 percent of the grosses, we’ll only be giving you 45 percent to make up for our losses on the glasses.
The exhibitors could also tell Sony that they’ll happily play “Men in Black” and the new “Spider-Man,” but in 2-D, not 3-D.
Of course, if some of Sony’s studio rivals announce that they won’t be paying for 3-D glasses, then the leverage could shift to the studios.
Some 3-D boosters have been urging consumers to buy their own glasses, which they could bring back to the theater each time they want to see a film in 3-D. But for now, there are still too many different 3-D systems, each requiring a different pair of glasses. In the future, there could be one industry standard, but I’m skeptical that most moviegoers — who only see a handful of 3-D movies each year — will want to keep a separate pair of glasses lying around the house, just for use at the movie theater.
As always, the end game here will be a negotiation. But at a time when most American moviegoers are growing increasingly unenthusiastic about paying a $3 to $5 premium for a 3-D movie, any settlement that passes along more costs to the consumer is going to be wildly unpopular.
That’s the real question here: If 3-D is the golden goose, how many times can Hollywood try to kill it before it finally succeeds?