The 35-year-old film-maker believes that the move would draw people away from movie theatres, which he insists is the best forum for viewing films.
He says, "If I can't make movies for theatres, I don't want tomake movies. I hope this is a very bad idea that goes away."
In a recent speech at a Florida convention, Shyamalan said, "When I sit down next to you in a movie theatre, we get to share each other's point of view. We become part of a collective soul. That's the magic in the movies.
"Nobody has benefited more from DVD sales than me. I bought my house on DVD sales from The Sixth Sense. But take away my house. That's not why I do what I do.
"If this thing happens, you know the majority of your theatres are closing. It's going to crush you guys."
The proposal to simultaneously release movies in theatres and on DVD is the most pressing issue facing the exhibition industry today, with the discussion focusing on the need to increase studio revenues.