The way films are distributed today is very different than it used to be in the past. Films used to come out in theaters for audiences to go see and would not be released on DVD until six months or even a year later. This would bring a lot of people into the theaters because they would have so long to wait to see it on DVD if they did not see it in theaters. Film studios would lose a lot of money doing this though because by the time the film would be released on DVD, audiences that were previously interested in seeing it would forget about the film because of their interest in new ones coming out in theaters. With this issue, film studios would have to pay a lot of money to remarket their films when they were released on DVD to get more people interested in buying them. Over time, as pay-per-view and on-demand came out, film studios realized the money making potential of day and date release.
One issue with theaters is the location of them. Higher populated areas are fortunate enough to have more theaters and play a wider range of films (especially in areas like New York City, Los Angeles, and other highly populated places). In scattered lower populated areas (small towns in Kansas, Utah, etc.), the townspeople are lucky to even have a small limited theater or may have no theater at all, especially if they live in the middle of no-where or far from a town. However, a good amount of these people who live in small towns or not as highly populated areas do have TVs and often have on-demand.
Major movie theaters scattered throughout the United States. (Fandango)
Another issue film companies had with theaters was the money split between them. At the time, the box office split was generally 50/50. Fifty percent of the money made in the box office for the film went back to the film company and the other fifty percent went to the theater. StreamingMedia’s article, “Day-and-Date Movie Releases Are Still Rare; Is a Change Coming?” discusses box office declines and why a different method (day to date releases) is used in the field. Film companies did not like that there was a 50/50 split with theater box office income. So, film companies figured out that because of these two issues with the theaters (their locations and the money split), they could make more money by doing day and date movie releases. For certain films with certain companies, the film would be advertised on TV (advertising is about 1/3 of a film budget) and when it is released in theaters, it would also be released at the same time on video on-demand, through HBO or other sources.
Plentiful video on demand options. (PureIntegration)
People who had limited theater options would now have the opportunity to see the film, and consequently, film companies made more money. Another benefit of day and date release is that when more people see the film in all different places, their word of mouth and social media promoting the film gives them a wider reach. More people go out and spend their money to see the film, whether it is in a theater nearby or on-demand., The LinkedIn article, “Day-and-Date Release Strategy: Making the Best of the Release Window” discusses the success of the publicity surrounding theatrical release and the benefits of video on demand platforms. It also more deeply explains video on demand and the way distributors sell the films. A third benefit of day and date release is that film companies can negotiate better deals for themselves with the box office earnings. They can negotiate up to numbers like eighty percent goes to them and twenty percent goes to the theater. This is possible because theaters need people to come to see new films but film companies do not necessarily need theaters for people to see their films and for them to make money. Also, this is the reason that concessions at theaters are so pricey because now that is how theaters are really making their money.
Film companies though do not always use this method. It is selective what films are done this way for a lot of different more specific reasons. TechHive’s article, “Small Movie Are Opening In Theaters and Online At The Same Time, But Blockbusters Aren’t (And They Won’t)” talks more closely about the types of films released day to date. Primarily independent films are done this way. The reason is mostly because of flexibility, and unlike Hollywood’s big tent films, there are limited markets and theaters that can play the films because they are specific to certain audiences.