• by Wayne Friedman , Staff Writer, April 4, 2011

Faced with Hollywood studios' new digital movie efforts, so-called premium VOD, theatrical exhibitors fear lower revenues. But the theater owners have something up their sleeves: they can curtail valuable in-theater marketing.

Is there a lesson here for TV stations and their respective networks?

The Hollywood studios who are reacting to lower DVD sales and rentals by banding together for premium VOD service include Warner Bros, 20th Century Fox, Sony Pictures Entertainment and Universal Pictures. Theatrical movies would be available for $30 two months after their theatrical release.

This could overlap theatrical distribution for titles that sometimes run three months in theaters. Or the premium VOD deals could cause studios to shorten theatrical runs.

But theater owners know they have a card to play: the advertising of future movies. John Fithian, president/CEO of the National Association of Theater Owners, recently said exhibitors could reevaluate how they play movie trailers -- especially for films that will be available on premium VOD.

Seems theater owners weren't consulted on the studios' new plan -- and are pissed. Haven't we heard this before -- when some of those same Hollywood studios decided to send TV shows online, without consulting TV stations?

Like TV stations, theater owners have been making technological improvements. Exhibitors have installed more 3D screens because, after all, those films get a higher ticket price. But, later on in a movie's release cycle, consumers seem to actually prefer lower-priced 2D movies.

Oh, by the way, theatrical attendance continues to drop -- even with record revenues in 2010. This year, however, even that isn't happening. Through the first quarter of 2011, box office box office revenues were down 20%.

The constant theme from theater owners is that they need better movies. TV station programmers - except in the cases of "American Idol" or NFL football or "NCIS" or "Modern Family" -- might say the same thing.

Stations' retransmission fees are hotly contested these days, with the networks wanting an increasing share of those potential big dollars. What can TV stations do? Perhaps the same thing theater owners might be holding at bay: why not negotiate with networks over all that still valuable promotional time given to network shows.