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Week In Review: Movie Windows Really May Be Getting Smaller; Roku’s Raising Lots More Money

1. Movie Windows Really May Be Getting Smaller

Back in the day, when studios began releasing movies for home viewing on the radical new VHS technology, the studios reached an agreement with the major theater chains to keep a sizable window between theatrical release dates and home release dates, lest the audiences decided to eschew the movie theaters and their $5 sodas and watch the film at home. (The threat of piracy was also a much bigger issue back then.)

Those windows—today they stand at 90 days—have been under attack as of late, as studios, seeing dwindling profits, are pushing for theater chains to allow for much shorter home release windows.

There would be trade-offs: the initial home release prices would be very high, much more expensive than seeing the movie in a theater. Theater chains would get a percentage of the release. Blockbuster movies and indie flicks would be treated differently.

A few weeks back, we wrote about how Warner Brothers was leading the charge. Since then, they’ve been joined by other major studios, Universal, Sony, Fox, and Paramount among them. There’s still a great deal of resistance from theater chains, who really do fear that people would be willing to spend lots of money just to be able to avoid leaving the house.

Why It Matters

Shorter windows would help the ailing U.S. movie industry by creating different paths to monetization, particularly for smaller, indie films, the sort that used to flourish in an earlier era, but are now few and far between. They’d be able to see a bit of buzz that could lead to a long-tail-ish bump, plus they’d have a better shot at getting picked up by the major streaming services, which could profit from the early debuts.

We think the theater chains fears are unfounded—going to the movies is still a social thing to do, people enjoy seeing films in a theater with a full audience on a big screen and newer, more upscale theaters (the ones with the Barcalounger-style seats and food service) seem to be thriving.

What You Need To Do About It

Not much you can do right now other than wait and see how it all plays out. If you’re an advertiser, you can let it be known that you’re not concerned by shortened windows, but we’re not sure how much theater chains will care.

If you’re a theater owner, give it a shot. We think you’ll find the audiences will still keep coming.

And if you’re a movie fan—don’t prove us wrong! Keep buying tickets.

2. Roku’s Raising Lots More Money

The rise of Roku is the Cinderella story of the streaming video business, somehow the Netflix spinoff has bested the likes of Apple, Google and Amazon to become America’s sweetheart streaming device, and they’ve done it by having more options, a better interface, and better pricing.

They’re now looking to raise $200M more to fund their expansion, which includes being the operating system of actual TV sets (they now have a 13% share of the smart TV market) and expanding their advertising business.

Why It Matters

Roku may have outsmarted Apple, Amazon and Google, but their future is far from assured. Deals between the major MVPDs and the Big 3 streaming services (Netflix, Amazon and Hulu) may wind up making Roku obsolete—if those services are available via the set top box, does anyone need a Roku? Or, conversely, those deals may make Roku even more indispensable, as the MPVDs release apps for Roku, so that viewers can use their own devices and MVPDs can rely on Roku to supply a state-of-the-art interface.

What You Need To Do About It

If you’re an MVPD, we think developing for Roku is a smart idea—they’ve got a great interface and at $50 a pop retail, they are easily replaced every three or four years, either by consumers themselves or by MVPDs providing white labeled devices as a perk. (And they will need to be replaced because no one really believes that you can update hardware indefinitely—the whole notion of “obsolescence-proof” is a myth.) It also places the burden of installation on the consumer, and not having to track techs and roll trucks is a great cost-saving measure for an MPVD.

If you’re a niche content owner—or even a major network—there’s a place for you on Roku and as their share of the market grows (inevitable given the price of Apple TV and the challenging interfaces of Fire TV and Chromecast) you’ll be well served to be a part of it.

If you’re a banker—give them the money. We have no investment in Roku, but we like what they’re doing and we want to see them do more of it.