Will New Movies See 30 Day Rental, Digital Purchase Windows Before Moving to Streaming?

The COVID-19 pandemic led to some streaming innovations that did not stand the test of time. Among them were drastic changes to the traditional ways movie studios distributed their films. As theaters closed their doors, some streaming services were able to start showing new blockbuster films directly on their platforms, skipping digital rental/purchase opportunities.

Although this was an undoubted boon to consumers, media conglomerates who made such moves quickly realized there was little monetary gain behind day-and-date releases. That experiment is mostly dead and buried now and many media companies like Warner Bros. Discovery and Disney have recently made public commitments to extending theatrical windows for their movies past the 45-day minimum that has been the baseline for the industry in recent years.

The logic behind this move is easy to see: Studios make far more money from a film in theaters than they do once the movie arrives on streaming, and the symbiotic relationship between theaters and studios has been highly lucrative for decades. At a time when some media outlets are seeing their streaming losses mount to billions of dollars per year or more, it’s little wonder they are seeking ways to try and boost revenue by any means necessary.

But what happens once movies leave theaters? Many films become available to purchase or rent digitally on platforms like iTunes, Prime Video, Plex, and others while they’re still in theaters — this is called premium video-on-demand (PVOD). Then, once a film leaves cinemas, it often lives on those same transactional video-on-demand (TVOD) platforms before becoming available on subscription video-on-demand (SVOD) streamers. That leads to the question, with such an increased focus on profitability, could movie studios delay streaming releases even further to enhance revenues from digital rentals and purchases?

There are certainly those within the industry who think this would be a wise course of action. Chicken Soup for the Soul Entertainment acquired Redbox — which operates a digital TVOD market in addition to its ubiquitous red rental kiosks — in August of 2022, and its CEO Bill Rouhana thinks that studios should strongly consider a minimum TVOD window for their films before they head to streaming.

“The minute a piece of content hits your SVOD, it no longer has any value,” he recently told Deadline. “You should get money out of content in every way you possibly can and if you don’t, if you’re a studio and you’re jumping over a window that’s available to you, first of all you’re not making a very good self-interested decision. And second of all, you’re really not meeting your obligations to your participants to maximize the value of what they helped create. This is not a new idea that I’m articulating. It’s been the premise of the business for a century.”

According to Rouhana, studios are leaving big money on the table by skipping a TVOD window. Some movies like “The Woman King” already get weeks-long stretches on TVOD platforms and at disc rental kiosks before moving to streaming on SVOD, but others like “Black Panther: Wakanda Forever” are released on streaming services the same day that they enter their digital purchase window.

“If you’re talking about a window, which is traditionally four to six weeks – deferring for four to six weeks the arrival of a film on your SVOD, you’re really giving up $6 billion for that?” Rouhana asked rhetorically. “Does that seem like a reasonable trade to you? If I were a participant, I’d be furious about that.”

Now that studio executives have realized day-and-date streaming and theatrical releases don’t make financial sense, Rouhana argues that it’s time for them to stop ignoring the potentially lucrative TVOD window. By making new movies exclusively available to digitally rent or purchase for 30 days or so before moving them to SVOD, companies could unlock a revenue stream that they sorely need.

A minimum TVOD period of 30 days would certainly give a much-needed boost to services that offer such a feature. A new survey from Digital TV Research shows that TVOD revenues have essentially remained flat since 2016, outside of a big jump during the height of the COVID pandemic in 2020. Minimum TVOD windows would certainly help get profits flowing again, both for studios and TVOD providers.

It’s likely not all studios in the industry would jump aboard such a plan, at least initially. In late February, Comcast executives touted a strategy of shorter theatrical windows as being a big reason for the success of the company’s streaming service Peacock in 2022. Moving blockbuster films to streaming more quickly definitely helps boost the profile of the service, which can lead to more subscriber dollars if that service has enough archived library content to keep new users engaged once they’ve finished streaming the movie they came for.

With such a big financial opportunity in front of them, it’s likely at least some studios will begin experimenting with a minimum TVOD window before their movies head to streaming. How long those windows will be, and which companies will take the leap first are the initial questions that could be answered in the coming months.