Regal Cinemas Rejects Paramount's Distribution Idea

The nation's largest movie-theater chain isn't signing on to Paramount Pictures' plan to shorten the length of time it takes for a movie to become available to watch at home.

Regal Entertainment Group told investors on an earnings call Thursday that it wanted to stick with the "traditional distribution model" that the studio is trying to shorten with help from other exhibitors.

Earlier this month, the Viacom Inc.-owned studio struck a deal with AMC Entertainment Holdings Inc. and Canada's Cineplex Inc. that allows the studio to digitally release two coming features about two weeks after their screen count falls to 300 locations. It is the kind of partnership that was long considered a lost cause in Hollywood, as exhibitors have held fast to a traditional exclusivity "window" of 90 days, regardless of how many screens a movie is playing on in theater chains.

Regal operates more than 7,300 screens. Its closest competitor, AMC, has about 5,000.

Paramount's plan gives participating exhibitors a portion of the digital revenue on the two movies out this October— "Paranormal Activity: The Ghost Dimension" and "Scout's Guide to the Zombie Apocalypse." Since the initial announcement, five smaller exhibitors have signed on. Participating theaters at this point represent about 30% of the exhibition market.

If the Paramount plan works, other studios could start requesting similar arrangements with theaters, meaning moviegoers would be able to watch most movies at home weeks earlier than they do now. DVD retailers and pay-TV channels would also move up their release schedules.

Studios have long tried to shorten the length of time they must wait before a digital or home-video release, saying it can deprive audiences of legal ways to view a movie before its digital release and forces them to re-market a film. But theater operators have long feared that any modification to the 90-day window will lead to consumers forgoing the theater altogether and watching movies at home.

"The parameters of the current proposal, both economic and structural, simply do not make sense for us given the potential risks to the long term health of our business," said Regal CEO Amy Miles. Two other major exhibitors—Cinemark Holdings Inc. and Carmike Cinemas Inc.—have yet to decide whether they are participating.

Paramount is moving forward with its plan regardless of who else signs on, said studio Vice Chairman Rob Moore. "We didn't expect everyone to be part of it, but we're confident that a lot of others will ultimately join in," he said.

Write to Erich Schwartzel at [e-mail]

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