Don’t Overlook the Human Factor in Your Theatrical Windowing Strategy

By John Enoch, VP and Client Partner at Material

Hollywood is grappling with the length of theatrical windows.

At the heart of optimizing theatrical-vs-streaming content window strategies is the tug-of-war between cannibalization and synergy. At what point does closing a title’s theatrical window and releasing it in-home boost reach, IP value and return on investment without leaving significant ticket revenue on the table?

Brands weigh many different factors when determining their content windowing strategies. But the crucial human factor – consumers’ movie-viewing habits, preferences, motivations and other drivers of behavior – is often lost in the mix. Let’s review how we got where we are today: a morass of content window strategies that, for the most part, struggle to keep the consumer in mind.

The Current State of Content Windowing

Even as digital distribution models multiplied, content windowing used to be relatively simple. A movie would be released exclusively in theaters, and only after 90 days or so was it given a home release. This protected box office revenues. Consumers understood and accepted this schedule.

Then COVID came in 2020, wreaking havoc with distribution models as it did with so many other things. In July 2020, AMC Theatres signed a deal allowing Universal to make its films available via premium video-on-demand (PVOD) in the U.S. just 17 days after they opened in AMC theaters. Other studios and theater chains negotiated truncated theatrical windows as well. In 2021, WarnerMedia released its films in theaters and on HBO Max simultaneously, removing them from the streaming service after one month. In some cases, films were available exclusively in-home. Disney, for instance, delayed and then canceled the theatrical release of its live-action Mulan in the U.S., making it available in September 2020 as a premier offering on its Disney+ streaming service.

Today, some films continue to be available in-home within days of their theatrical release. Others have returned to longer theatrical windows. And consumers are left guessing as to whether they should head to the cinemas or wait until a title heads to streaming — hopefully to a service they subscribe to.

Factors Influencing Windowing Strategies

When determining their windowing strategies, studios have to take into account both short-term performance and long-term gains. They also need to balance potential risks with strategic benefits and exhibitor preferences with internal goals. A gamut of factors come into play.

• Box office potential. Tentpole films and other titles expected to perform well typically receive longer theatrical windows to optimize box-office revenue. Conversely, underperformers might have their theatrical windows reduced with a quicker pivot to PVOD.

• Exhibitor and filmmaker relations. Cinema owners are pushing for theatrical windows of at least 45 days, while some filmmakers all but insist on a theatrical release for their films – adding layers of complexity for studios determining windowing strategies.

• Streaming subscriber goals. A shorter theatrical run can leave a film with enough momentum to help streaming platforms win new subscribers and retain existing ones. The drawback is that consumers tend to perceive films that are in theaters for only a short time as “inferior.”

• Franchise strategy. For established IP, longer theatrical windows can help boost the overall brand and revenue streams from tie-in products and partnerships. Also, some studios worry that skipping or minimizing theatrical exposure can devalue the franchise over the long term.

• Release calendars. In the face of a crowded, competitive theatrical calendar, studios might opt to move to streaming more quickly rather than risk being overshadowed.

• Platform monetization strategy. A title that will be going directly to ad-supported video on demand might be given a longer theatrical window than one headed to subscription video on demand in order to maximize ad sales.

• Theatrical experience. Films available in IMAX, Dolby Cinema and other premium large formats (PLFs) generally warrant a longer theatrical window, as they provide an eventized and thrilling viewing experience that cannot be replicated at home. The same goes for films with live activations, such as sing-along showings.

• Global vs. domestic strategy. A windowing strategy that works in the U.S. might not be the best approach for overseas markets. Piracy concerns, market-specific behavior and in-home platforms in international markets can dictate different strategies per region.

Given how many factors come into play, content windowing is clearly neither a binary nor a one-strategy-fits-all decision. And while studios might balk at adding another consideration to their list when determining their strategy, this one missing factor is among the most important: the consumer voice.

What We Know About the Consumer POV

In their complex behaviors, habits, motivations and preferences, consumers are hardly a homogenous group. Nor are films homogenous in the type of audiences they’re most likely to attract. Shaping effective windowing strategies requires understanding the nuanced factors that impact how consumers perceive and engage with content.

For instance, audiences expect certain genres, such as franchise films, to remain in theaters for longer periods of time — typically at least six weeks — before being available in-home. Audiences often assume that a shorter theatrical window for such films reflects a lack of popularity, acclaim or quality — that the film was yanked early from theaters because it was a bomb. That perception is apt to reduce the title’s effectiveness for acquisition or retention when it does make its way to streaming.

Horror fans lean slightly younger and tend to watch these titles in groups. This means price sensitivity can play a role in their purchase decisions, which often leads to at-home, instead of in-theater, viewing. Similarly, family-friendly films can benefit from shorter theatrical windows as well. For many households with children, viewing at home is more convenient and affordable, plus streaming and on-demand lend themselves to repeat viewing, popular among kids. For parents of young children, too, taking kids to the theater can be a daunting task, making home viewing more manageable and appealing.

This ties in with another factor that determines consumers’ likelihood to view a movie in a theater vs at home: co-viewing. Titles that lend themselves to family movie nights or weekend gatherings with friends could benefit from shorter theatrical windows. By making them available in-home sooner, studios can still reap the benefits of the theatrical promotional efforts to attract audiences who would not pay to view the film outside the home no matter how long the window.

Knowing that genre and co-viewing highly influence consumers’ likelihood of viewing films in a theater underscores the importance of determining content windows on a title-by-title basis. A blanket approach across all releases won’t work any better than marketing art-house and superhero films in the same way would.

Knowledge Gaps: What We Still Need to Know About the Consumer POV

Optimal window lengths by genre and demographic; perceived consumer value of theatrical vs. streaming; the impact of streaming debuts on franchise longevity… These are among the areas studios need to explore when creating their content window strategies. A dual-lens research program – encompassing listening and asking methods – can unlock consumer perspectives and provide studios with more insightful, effective tools for forecasting the best strategy for each title.

Listening: Marketplace Intelligence

A strategic audit of recent titles that played in theaters before streaming is a relatively low-lift starting point. Comparing social media sentiment, YouTube trailer engagement and test screening feedback against performance and windowing strategy can yield meaningful patterns, and identify early performance signals that can inform dynamic windowing decisions.

Beyond scoring online sentiment and engagement against title tracking data, this stage includes exploring top-of-mind consumer preferences and opinions regarding relevant topics. Topics might include perceptions of film quality based on whether titles are theatrically released and, if so, for how long; the effect of ticket prices on likelihood to see a film in a theater; and the importance of PLFs and live activations on theater attendance and in-home viewing.

Asking: Quantitative Validation

Learnings from market intelligence would direct the next step: an in-depth quantitative survey using a conjoint design. The survey might present participants with trailers, key art, descriptions and cast information for upcoming titles, then ask their preferred options for viewing, accounting for variations in price, availability and other factors the secondary research flagged as relevant.

Questions addressed through this approach would include

• Does ideal window length vary depending on consumers’ age, location or household type?

• Will certain audience segments see films only in a theater or only at home?

• Are people who stream early in-home releases less likely to go to theaters in the future?

• Are theatrical-first releases more “sticky” in pop culture over time?

• Does theatrical-exclusive status increase a title’s perceived importance or quality?

• Do audiences form stronger emotional bonds with IP when experienced in theaters?

• How does the release path influence downstream revenue such as licensing and merchandise?

How Material Can Help

Studios, producers and distributors study numerous factors and data points to determine content window strategies. A failure to give appropriate weight to the consumer voice, however, can result in decisions misaligned with real-world audience preferences and habits, ultimately costing money in both the short and the long term.

At Material, we have a 50-year legacy of partnering with the most recognized names in entertainment to help them understand and respond to what consumers need and want. We unlock rich, actionable insights and shape strategies that drive audience engagement, loyalty and growth.

Reach out today to learn how we can bring a consumer-centric lens to your content windowing strategies and other business challenges