A new battle in the war for our eyeballs has just been scheduled for August 28, 2015. The Weinstein Company announced a deal to release the sequel to the hit art-house martial arts film "Crouching Tiger, Hidden Dragon" simultaneously in Imax movie theaters and on Netflix.
It's a shot across the bow of the major movie theater chains — Regal, AMC and Cinemark — who control most of the theaters in the United States and demand an exclusive, 90-day "window" before their films move to smaller screens on television or online.
"Anything that starts to erode or challenge the 90-day window could be disaster for them," says Sam Craig, director of the Entertainment, Media and Technology program at NYU. According to Craig, if just 10 percent of theatergoers stayed home, it would mean a loss of more than a billion dollars in ticket sales.
"No one has approached us to license this made-for-video sequel in the U.S. or China, so one must assume the screens Imax committed are in science centers and aquariums," says an AMC Theatres statement.
Other movies have attempted to debut online and in theaters, but this deal is the first to include Netflix, and the first to include a film that could have just as easily debuted in theaters, according to BTIG media analyst Rich Greenfield. "I think if movie studios see the success of what Netflix and Imax do, I think others will follow," says Greenfield.
If they do, theaters will only be able to differentiate on the basis of the theatergoing experience — something they've been attempting to do for years. Regal Cinemas ran trailers in which action films gradually shrank to a small rectangle in the middle of the big screen, while a narrator intoned: "If you want action this big you can’t have a screen this small." But consumers with smartphones increasingly watch videos even on the smallest of screens, and hardware options have arguably made home viewing more theatrical.
"The exhibitors are right: It is a different experience," Craig says. "But you get a lot of people that have 60-inch HD screens and surround sound, and maybe they would be just as happy watching it at home."
Gov. Jerry Brown has signed SB 270, the first statewide ban on single-use plastic bags in the U.S. It requires a 10-cent fee for the use of compostable or paper bags.
In a unanimous five-to-zero vote, the Federal Communications Commission decided to eliminate the blackout rule. Since 1975, the regulation barred cable and satellite television from airing local sporting events when the team failed to sell enough tickets to fill their stadium. The National Football League has defended the rule for many years, calling it a tool to ensure a large attendance at the games.
Kenneth Shropshire, director of the Wharton Sports Business Initiative, talked with David Gura about the move. Listen to the full conversation in the audio player above.
EBay and PayPal are going their separate ways. It’s an amicable parting though.
They don’t need each other like they used to. PayPal is getting fewer and fewer new users from eBay — 25–30 percent today, dropping to 15 percent three years from now, CEO John Donahoe told CNBC. Ebay needs some flexibility as it tries to grow its share of e-commerce.
Activist investor Carl Icahn launched a high-profile campaign to split the companies nine months ago, heckling eBay’s leadership and preparing to insert board members of his choosing. He was rebuffed in the short term, but eBay has clearly come around.
“We are happy that eBay’s board and management have acted responsibly concerning the separation — perhaps a little later than they should have, but earlier than we expected,” Icahn wrote in a statement.
“They have to grudgingly admit he is right,” says Paul Sweeney, senior media analyst for Bloomberg Intelligence.
PayPal wants to be the way everyone pays for everything: online and at the store. But so does Square, Softcard, Google and now Apple Pay.
“The eBay folks and PayPal folks looked around the marketplace [and] they saw a market that’s continuing to change rapidly and continuing to get more competitive,” says Sweeney.
If PayPal has to consider eBay every time it makes a decision, it’s going to get tied down.
“They also recognize they were potentially missing out on other business opportunities by being part of the bigger company,” Sweeney says. “By being a stand-alone company they can be a little more nimble, innovative, and perhaps pursue new opportunities.”
There is enormous money at stake. Proximity payments — paying for things using your phone — are blowing up, says eMarketer analyst Bryan Yeager.
“This year we expect proximity payments to reach $3.5 billion — doubling over last year,” Yeager says. “We expect it to next year reach $8.59 billion, and by the end of 2018 hitting a little more than $118 billion.”
Even so, Yeager says that’s a drop in the bucket when you consider how much money gets put on credit cards.
EBay also needs to free up cash to work on its own issues; there’s competition from Amazon and maybe even Alibaba. Mergers and acquisitions may even be in eBay’s future, the CEO hinted to CNBC.
The companies will split late next year. But they’ll still be friends.