• Ad Age, Wednesday, January 25, 2006 11:15 AM

Last year was a disappointment for the motion picture industry. Various explanations have been offered--everything from bad weather to, of course, crummy films. But the most worrisome explanation may well be the most telling: consumers are increasingly finding they needn't spend their money for in-theater films when they can just as easily see those pictures elsewhere, and less expensively. Like on DVD releases, for example--or on video-on-demand. Those products ultimately still make money for the Hollywood studios, but the business model appears to be changing rapidly for the film industry. And for the cinema owners, these may indeed be troubled times. (One response: upgraded facilities.) This "well could be a watershed year as executives are forced to rethink some of the traditional tenets of the business," writes T.L. Stanley at AdAge.com. "Among them: cinemas are getting first crack at releases; top acting talent getting sweetheart deals; and rethinking the hallowed concept of tentpole movies." One of the hottest issues, says Stanley, "is whether studios will consider releasing features on DVD, on pay TV and other platforms at the same time the movie launches in theaters now that the movie-going experience is under fire and the window between feature and DVD releases continues to shrink."

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