Chicken Soup CEO: Studios are embracing the home entertainment window again, including for ‘Avatar 2’

Chicken Soup for the Soul Entertainment CEO Bill Rouhana speaks at Needham Growth confab.

Erik Grünwedel

With limited major new theatrical releases since the pandemic began, movie studios have been accelerating the distribution of movies to their branded or third-party streaming platforms, often at the expense of legacy home entertainment retail channels.

That trend should change in 2023 as major theatrical releases expand from 12 movies in 2022 to 33 titles this year, starting with Disney/Marvel Studios. Ant-Man and the Wasp: Quantumania on February 17, according to Bill Rouhana, president and CEO of Chicken Soup for the Soul Entertainment.

Speaking on January 11 at Needham’s 25th Annual Growth Conference in New York, Rouhana said that with one big box office release scheduled per week, three distribution windows: theatrical, home video (TVOD, Disc) and broadcast sequences, should re-emerge as the norm in 2023.

“Disney is doing that for Avatar: The Path of Waterthey announced it yesterday,” he said, adding that Warner Bros. Home Entertainment would stick to a January 13 home video window. party in the House theatrical release.

“When [Warner Bros. Discovery CEO David] Zaslav entered and decided to undo everything that had been done. [by the former WarnerMedia management] during COVID, the first thing he did was try to figure out how to get back to as many windows as possible,” Rouhana said.

The executive said that Paramount Home Entertainment gave Redbox (and other digital retail channels) access to last year’s box office champion, Top Gun: Maverickbefore access to streaming the film on Paramount+.

“It was actually in theaters and in home entertainment at the same time, which was interesting,” Rouhana said. “That windowing strategy is clearly making a comeback for big movies.”

When asked why studios are re-embracing movie retail at the expense of streaming, Rouhana says the motivation is money left on the table.

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“Studios want to get as much money out of the theatrical business as possible, but if you look at transactional VOD and home video, we’re talking about billions of dollars that are at stake if you go above that and go directly to SVOD. ” he said. “By the time a motion picture hits SVOD, it’s worthless.” [as a revenue generator].”

Rouhana believes the studio rush to release movies on streaming (led by Warner Bros. in 2021) was due in large part to the pandemic, closed theaters and a miscalculation of the economics of her own industry.

“If you create content, you’re not going to get your money back by going straight to broadcast,” he said. “I’ve been saying that for five years and I’ve been a very lonely person for those five years.”

Rouhana says studios will maximize revenue for a theatrical release by maintaining box office, home video, subscription streaming and ad-supported VOD, in that order. The executive believes that by sticking to traditional distribution channels, studios will gain a lifeline for their low-budget motion pictures that generate almost no tax revenue from streaming.

Chicken Soup for the Soul Entertainment operates the largest AVOD network not owned by a major media or technology conglomerate, with countless AVOD and ad-supported free TV streaming channels, plus 34,000 Redbox kiosks and Redbox digital movies on demand . The latter is now the fourth largest transactional VOD service in the country after Prime Video, iTunes and Vudu.

Furthermore, Rouhana said that the expansion of the Redbox application to include AVOD and 160 FAST channels has increased the company’s ad sales opportunities. Chicken Soup went from two advertising iterations in early 2022 to 22 iterations late last year, despite Rouhana maintaining that she is not optimistic about FAST.

“I’m not a big fan of the FAST business because I don’t think it does much to improve the user experience,” he said. And I really believe [the user experience] it’s where we’re supposed to go in the VOD space. We are supposed to be innovative, to do better for people.”

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Rouhana believes that viewers have turned to FAST as an alternative to spending 20 minutes searching for something that they’re only going to spend 22 minutes looking at.

“Until we make it possible for viewers to find things quickly and easily, I don’t think they will choose AVOD as they should,” he said. “But when we can serve everyone with a home page with everything they want to see, then I don’t think FAST makes any sense.”

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