Research: early release for home viewing boosts movie revenues, but piracy isn’t on the rise

Reducing the delay between movie releases in theaters and home-viewing releases has been generating more and more money for movie studios in recent years, especially amid the coronavirus pandemic. This is stated in research by Carnegie Mellon’s Initiative for Digital Entertainment Analytics (IDEA).

Usually, after the premiere of a film at the box office, filmmakers have to wait several months before they can watch it at home. This deferral tactic helps cinemas maximize their revenues. However, in recent years, there has been a trend towards shrinking this release window, and this process has accelerated due to the COVID-19 pandemic. In some cases, the tapes are being released both in theaters and for home viewing at the same time, as recently happened with the film Wonder Woman 1984 – studio Warner Bros. launched the picture on the HBO Max streaming service on the day of the premiere.

The researchers looked at the film market in South Korea – the fourth largest in the world after the United States, China and Japan. The choice is due to the fact that in recent years studios have experimented with shrinking the release window in Korea much more often, as a result of which the delay is significantly shorter than in other countries and is now 28 days on a Super Premium Video on Demand subscription – this means that films can be watched at home, although they are still available in cinemas. Experts compared such cases with traditional releases with a difference of 90 days in the same South Korea and in the USA, where the practice of early release of home versions is almost absent.

It turned out that the income from the sale of tickets to cinemas fell slightly – by about 0.8%. However, in general, studios and film distributors earn more in such conditions than with a traditional launch – in the first eight weeks, studio income increases by an average of 12%.

With early home release, another problem arises with the rise in piracy. But it has little effect on the situation, the researchers say: according to them, the fact is that people simply get access to pirated versions of paintings earlier, but the number of pirated downloads of the film does not increase. Therefore, it was not possible to detect any increase in the negative impact on the operation of film studios, the study said.

Overall, the results show that the film industry is on the right track, shortening the time between theatrical and home releases, which has a beneficial effect on both studio revenues and viewers’ mood. Nevertheless, it is too early to draw general conclusions, experts admit: the study was conducted for a rather specific set of films in one particular country. It is possible that longer and shorter delays, or their absence, may have a different impact. In addition, the problem of film piracy is not fully understood and more research is needed.