Sky Movies' Ian Lewis: 'We have to get films to fans before they get to them illegally'

There seem to be more ways to watch a movie these days than there are ways to have your eggs of a morning: online, on-demand, pay per view, Sky+. What happened to the straightforward "on television" or even "at the cinema"? To the average film viewer, the industry might appear to be at the tipping point of new technology, but Ian Lewis, director of Sky Movies, thinks differently. He predicts the film world will suffer the same, very costly, mistakes the music business did, if it stalls its reaction to online possibilities, and other new ideas for getting films to film fans as quickly and as easily as possible, a few of which Sky is currently pioneering.

Established players in the music industry, says Lewis, waited until the last minute to react to the new technology, which enabled illegal downloads. They emerged licking their self-inflicted wounds. The film world has had some breathing space due to the more advanced technology required to download movies compared to music, but now that most internet users have broadband, the film world needs to take control of consumer desire for movies online and elsewhere – before illegal pirates plug that gap.

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"There's a need to embrace change," says Lewis. "Sometimes the movie industry has not been as quick to react and develop as other industries have. It hasn't moved as quickly as consumers, who embrace new platforms at the drop of a hat."

Sky Movies now has 15 channels dedicated to film, which were re-branded from numbered channels into genre channels last year, around the time Lewis, 45, moved from being Sky's director of broadcasting into his present role. They include three HD (high definition) channels. In addition there is the Sky Anytime on PC service, which boasts around 500 video on-demand titles.

The only thing standing in the way of Sky's bombardment of its subscribers with movies is the antiquated timing system written into the laws of film distribution. Gone are the days when films would appear at a cinema and run for three or four months, appear on video a year or two later and terrestrial TV later still, but there is still a "window" of lag time – about 16 weeks – between a film appearing in cinemas and being distributed in any other way.

This arbitrary window is one of Lewis's major bugbears. "One of the things we collectively do [as an industry] that restricts us is the very strict window structure. There is no rhyme nor reason why those windows exist in the format they do. Up until the last year or so they have been rigidly adhered to, though every now and then they move forward and develop. I don't think anyone could turn around and say it means they optimise their marketing money. Any studio or independent distributor will have spent a certain amount of money on marketing their film when it goes into theatres, and then when it goes to DVD. We'll spend money, and then even later one of the terrestrials might spend money. It is a very inefficient means of making people aware of the film."

It is also a four-month period during which a film is "out there", but Sky Movies can't make any money out of it. To get around this, Lewis tested out a deal with Warner Brothers earlier this month, broadcasting Beowulf just 15 days after it arrived in cinemas, and The Assassination of Jesse James just one day after its theatrical release. Lewis says he was pleased with the results, and that viewing numbers surpassed what was expected in both cases, despite The Assassination of Jesse James being a relatively small release. The experiment will be repeated in May and June.

It comes as no surprise that cinemas would rather keep new releases to themselves for a fixed period of time. It is their exclusivity deal, which guarantees their business. Facilitating the diversion of potential customers away from the cinema and towards watching a film at home, on television or online, would be suicidal.

Lewis does not agree. In his opinion, this is the sort of retrograde thinking that is holding the movie industry back. He points out that people are always wary of change: films were originally held back from TV to protect cinemas, VHS was seen as a threat to TV revenues and DVD revenues then became a threat to VHS revenues. Each time, the consumers have voted with their pockets. Far from trying to cannibalise cinema takings, says Lewis, he is responding to viewer demand for more choice. Lots of people, himself included, want to go to the cinema more frequently than the UK's 2.6 times a year average, but get sidetracked by other leisure pursuits. He wants to make sure they don't have to wait months to catch the films they had planned to see.

Another of his experiments was with the foreign independent film The Edge of Heaven, made by Artificial Eye, which was available in Sky homes at the same time as it reached cinemas. "It was a risk for all parties," says Lewis of giving a bolder profile than usual to a foreign-language film. "There aren't many distributors who would have the nerve to do that, but we got far more efficiency out of the collective marketing spend." As a sweetener to worried cinema chains, and a way of getting its foot in the distribution door, Sky has set up a deal with Odeon Sky Filmworks, to oversee the distribution of various titles once they have hit the cinemas.

Lewis hopes to shake up an industry set in its ways by taking these sorts of risks, and encourages others to do the same. Though they have less to gamble with than the big studios, small independents such as Artificial Eye can benefit from reaching Sky's customer base. Lionsgate is also on board, and in May subscribers can watch 3:10 to Yuma starring Russell Crowe and Christian Bale and War, an action flick with Jason Statham and Jet Li, much earlier than they would under normal release conditions.

The handful of films Sky has negotiated for broadcast ahead of time seems, at the moment, unlikely to make much impact on the business, and Lewis admits he finds each delay frustrating. "It's one film at a time and one test".

The experience of the music industry however, which he believes holds many lessons, suggests that any structural changes which the public take to will evolve thick and fast. Good examples are Prince's CD giveaway with the Mail on Sunday, before he sold out 21 nights at the O2 arena, and Radiohead offering an album for download at any price fans wished to pay.

When it launched almost two decades ago, Sky Movies was a linear TV channel.

In 2001, 92 per cent of those who watched Will Smith's Wild Wild West watched it during Sky Movies' primetime slot, 8 o'clock on a Saturday evening. In 2008, for the latest Will Smith blockbuster, that figure had dropped to 25 per cent. Forty per cent watched a live repeat, 10 per cent and 11 per cent watched via Sky +1 (Sky's Premiere channel running an hour behind) or Sky+ respectively.

Viewing habits have fragmented, but Lewis says Sky Movies is fragmenting its service to match, and innovating in the field – one of the reasons he loves working for the broadcaster. "We would rather have a slightly smaller share of a much bigger cake," he smiles, "than a slightly bigger share of a much smaller cake".