The controversial proposal is still alive — but will have to be part of a much bigger effort to restructure the studio-theater relationship — reps from both camps said at a CinemaCon panel this morning. “I don’t know what the answer is,” Universal Pictures Adam Fogelson says. But with studios losing billions from declining DVD sales “I know that if we don’t experiment we’ll have a business problem that will affect all of us….We have to find a way to claw back some of that revenue.” Exhibition companies vigorously oppose studio efforts to present movies to home viewers while they’re still playing at theaters. But Fogelson says their fear that a high-priced VOD offering will cannibalize ticket buyers is misguided. For example, when his corporate cousins at NBC showed Olympic programming on multiple platforms it helped the main money-maker: the prime time network broadcasts. He also noted that Disney’s re-release of The Lion King in 3D was successful in theaters even though the home video discs were out a week later. “There are people who love movies and love going to the movie theaters, but people with children or a certain professional life (who can’t go) want to be part of the dialog of movies when the movie is most relevant…We can probably find a price point and delivery method to bring these people in without disincentivizing them from going to the movie theater.

Carmike Cinemas’ David Passman doesn’t buy the analogies noting that exhibitors just get “one bite at the apple” and “if just one patron chooses not to go, then the exhibitor is hurt.” But he adds that there might be room for compromise if they look at “an entirely new model, not just a tweaking of the model…. We need to jointly think of a way to grow the pie.” Digiplex Destinations’ Bud Mayo agreed, saying that “there’s no reason we can’t be part of the process,” for example by selling downloads or DVDs. He also urged studios to help out by looking at theaters much like they do TV networks and providing different kinds of content for various dayparts. “Why is something aimed at little kids on a screen at 10:00 on a Monday night? …We need to think as an industry” about such issues.

For all of Deadline's headlines, follow us @Deadline on Twitter.