Maverick Mogul

It's hard to overstate the challenge this poses to the status quo. For the past 25 years, the studios have operated on the assumption that wringing maximum revenue out of a film meant controlling the public's access to it via a series of "release windows." The first, most restrictive window (and the costliest to the customer) was the theatrical release; months later came DVD, pay-per-view, cable, and finally the thing was thrown to the masses on free TV. But with the rise of services such as TiVo, Netflix, and video and music downloads (not to mention online piracy, an estimated $858 million-a-year business and growing fast), consumers are no longer willing to take their entertainment on someone else's schedule.

By releasing new movies in several formats on the same day--"day-and-date release," as it's known--Cuban and Wagner believe they can make more efficient use of the marketing dollars spent on each film. Studios typically mount separate campaigns, months apart, for the theatrical and DVD releases. (The DVD marketing campaign for a major movie can cost north of $15 million, according to Nielsen Monitor-Plus.) All too often, however, by the time the movie is out on DVD, it has been battered by critics, overshadowed by newer releases, or has simply faded into oblivion. "I look at my own movie consumption habits," says Cuban, "and a lot of times I'm saying, 'Boy, I want to see this movie,' and 'Damn, I missed that one. I'll buy the DVD when it comes out.' And I never do it." Cue the millions of cheering parents who'd like to see King Kong on the same day their single friends do.

Each of the six Soderbergh movies will be released day-and-date, with showings on HDNet and DVDs initially priced at a premium--perhaps $30 or $35. There may also be rental DVDs simultaneously available from Netflix, or downloads from CinemaNow, an online service.

It's a counterintuitive idea, and it stirs near panic in just about everyone involved in making, distributing, or showing movies. It could encourage moviegoers to just opt out--to buy the DVD or watch the movie on cable, skipping the hassles of parking, the $7 popcorn, and finding a good seat. "Is it a better model?" asks Wagner. "It makes total sense to put the customer in charge. The more complex question is whether it's a better model for us. I think time will tell. It's not about one or two movies. It's about a slate. How should they be priced, how should the model be tweaked?"

The release of the Enron movie was their first partial trial of the idea. On the day of its theatrical debut, it was also shown once on HDNet Movies. The reaction from other theater owners was harsh: Some refused to screen the film at all. So Cuban and Wagner developed a scheme to appease them in the future, a "bonus pool" made up of 1% of gross DVD sales, on the rationale that theatrical showings promote the DVD.

Of course, no release strategy or digital key chain can get around the challenge of making movies that people want to see. Cuban knows this, and he has boiled that imperative down to a Yogi Berra-esque koan: "If there's bad movies, people don't go. If there's good movies, people go."

In august, Cuban and Wagner received a sign from above--well, from Bob Iger, Disney's new CEO--that probably did more than anything else to put the stamp of approval on their strategy. When Iger, during his first conference call with analysts, conceded that day-and-date release might be inevitable, he put the old guard on notice that "all the old rules should be called into question."

And so an orthodoxy begins to crumble. The arm's-length relationship between studios and theater chains (which dates back to 1948, when the Supreme Court required the studios to sell off the movie houses they owned) has meant that studios supplied the pictures and then took a cut of every ticket sold. But now the studios are being forced to choose between those longtime partners and their own long-term interest.

"If you ask some of the studio guys behind closed doors," says Banowsky, "they all have a theory that's similar to ours, that simultaneous release is going to increase the pie, that it's not going to be a negative thing."

But Banowsky points out that even if the big studios jump in, 2929 Entertainment has an advantage, not only because its component companies--cable channel HDNet Movies, for instance--will benefit from simultaneous release but because the company also controls its own screens with Landmark. (With so many outlets for new movies, antitrust is less of an issue today than it was pre-TV.) As for other theater owners, "the collapsing of release windows scares them more than anything I've witnessed," he says.