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Gibson’s ‘Mel Model’ Tests Market for $9.99 Pay-Per-View

Mel Gibson is bypassing theaters and releasing his latest picture on pay-television today, a move other producers are pursuing as consumers spend more to watch movies from home.

“Get the Gringo,” which stars the 56-year-old actor as a career criminal who finds himself in a Mexican prison, will be available solely on DirecTV this month for $9.99, before its DVD release. The satellite service is promoting the film to its 20 million U.S. customers on TV, via e-mail and on its website.

Gibson’s track record means the so-called Mel Model will be watched. His 2004 independent release, “The Passion of the Christ,” grossed $611 million in worldwide ticket sales. While his reputation may have made it difficult to get theatrical distribution, the experiment will appeal to other filmmakers who don’t have the same resources, said Phil Contrino, editor of film researcher Boxoffice.com.

“This is a way that his fan base will find the movie,” Contrino said in an interview, citing Gibson’s artistic respectability. Smaller-budget films may not warrant a $30 million outlay to get into theaters, he said.

Gibson’s reputation was damaged by an anti-Semitic tirade during a 2006 drunk-driving arrest and a well-publicized blowup at his former girlfriend in 2010.

“Get the Gringo” could have had traditional theatrical distribution, said Mike Dunn, president of Los Angeles-based Twentieth Century Fox Home Entertainment, which is distributing the picture. He said he’s gotten calls from other producers asking about releasing a film first on pay TV.

“It’s a new model that goes broad quickly,” Dunn said. “A lot of films will go this direction.”

‘Smarter Way’

Gibson, who financed the $20 million production cost, will get a larger share of revenue from DirecTV (DTV), receive payment sooner, and shell out less in distribution fees than with a traditional theatrical release, according to Mark Gooder, chief executive officer of Icon Productions LLC, the actor’s Santa Monica, California-based company.

“We’d been having conversations about digital platforms,” Gooder said in an interview. “We said to ourselves, ‘We’ve got this film here, we paid for it, is there a smarter way of getting it out?’”

DirecTV, based in El Segundo, California, declined to comment, said Robert Mercer, a spokesman.

Major-studio cutbacks in the number of film titles has forced some independent filmmakers to look for alternatives. The major studios released 141 movies last year, a 31 percent decrease from 2006, according to statistics from the Motion Picture Association of America.

Home Theaters

Gooder estimated the cost of advertising and printing copies of a movie for a 2,000-screen release at $28 million.

“The theatrical experience is still a huge driving factor, but there is parallel model,” Gooder said.

Home-theater systems have improved the living-room viewing experience, and audiences have gotten used to options like Netflix Inc. (NFLX)’s. A high-definition version of the movie will cost $10.99, according to Fox.

U.S. pay-TV purchases increased 8 percent over the past two years to 278 million videos, according to Bruce Goerlich, chief research officer at Rentrak Corp. (RENT), which compiles industry statistics. Video-on-demand sales rose 6.8 percent to $505 million in the first quarter, according to the studio-run Digital Entertainment Group.

The financial-crisis film “Margin Call” was released simultaneously last year in theaters and on pay television, generating 600,000 video-on-demand transactions, according to Peter Wilkes, a spokesman for Lions Gate Entertainment Corp. (LGF) The movie grossed $5.4 million in domestic theaters and $4 million in video on demand purchases.

‘Braveheart’ to ‘Beaver’

Studios have also weighed so-called premium VOD. Comcast Corp. (CMCSA)’s Universal Pictures abandoned a plan last October to release the Eddie Murphy film “Tower Heist” for $59.99 on pay TV three weeks after its theatrical release, after exhibitors threatened a boycott.

“This will eventually work out to be a great business model but the first movers on this are going to have a tough time,” said J.C. Spink, a producer of “The Ring” and “I Am Number Four.”

Gibson, who won Academy Awards for best picture and director for 1995’s “Braveheart,” has struggled professionally. “The Beaver,” in which he starred, grossed less than $1 million in U.S. theaters last year, according to the Internet Movie Database.

He was dropped from a cameo in Time Warner Inc. (TWX)’s “The Hangover Part II” after some members of the film protested his appearance.

Leno Show

Gibson premiered “Get the Gringo” for one night in Austin, Texas, and nine other locations April 18 to generate chatter on social-networking sites, Fox’s Dunn said.

The movie will be released in theaters overseas, Gibson told Jay Leno on “The Tonight Show” on April 27. He said he had theatrical distribution lined up in the U.S. but opted for pay-per-view.

“If you take four people to the cinema you’re paying 100 bucks for the babysitter and something to eat and everything else,” he said. “With this it’s 10 bucks.”

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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