Sean Parker, the former Napster mastermind and Facebook hanger-on who most people probably haven’t thought about since seeing Justin Timberlake play him in The Social Network, has a new industry-threatening idea: what if you could pay $50 to rent any big blockbuster movie at home while it’s still playing in theaters?
Personally, I wouldn’t pay $50 to see a major blockbuster movie at home instead of on opening night, but I don’t have kids. An average family of four can spend around $80 to go to the movies. A $50 fee for family viewing at home might seem like a better option. Maybe those in the higher tax brackets would happily pay the rental fee, and the same goes for those who live far away from any premium theaters. That is if the movie theaters ever let us make our own choice.
Parker is currently kicking the tires to find funding for his new start-up The Screening Room, the name he’s given an idea he hatched with the help of Sony’s former distribution chief Jeff Blake. He wants to create a unique set-top box which will use an anti-piracy technology to provide movie-lovers access to a constantly updated library of the current theatrical releases from every major film studio. The set-top box will cost $150, and each movie on the service will cost $50 for a 48-hour rental. As a bonus, you’ll also get two tickets to see the movie in a theater of your choice. Theaters will receive as high as a 40% cut of the profits.
Steven Spielberg, Peter Jackson, J.J. Abrams, Ron Howard and Brian Grazer are backing the company, or at least they’re endorsing it here in the early stages. The actual studios and theater owners, though? Well…
“This news is so damaging, I can’t tell you right now how unhappy I am,” says one major studio distribution executive.
Another warned, “It would be the beginning of the end, and half of the theaters in this country would close.”
“Hopefully, this will fail,” added one film buyer in exhibition.
“Anyone who thinks this is going to work in this day and age needs their head examined,” warns one exhibitor.
It’s a familiar narrative. Someone comes along with a proposal for a day and date VOD distribution strategy which gives consumers more options for how they can see new movies. The cool kids at the Alamo Draft House and other progressive theaters jump on board, happy to play new movies which are concurrently available to rent online. The rest of the theater owners shove their fingers in their ears to shout “Not listening!” and the film studios back down.
That same year, Warner Bros., Fox, Sony and Universal all tried to join a deal with DirectTV to offer premium new releases for $29.99 a full 60 days after their release in theaters. Several months after this was announced, DirectTV told the press, “The service is part of an attempt by studios to harness pay-TV as they seek new ways to sell movies and counter shrinking DVD sales. Few customers will purchase the premium rentals unless the quality of the movies improves and the price comes down. They’re priced too high for consumers. We didn’t choose that price, but that’s where the studios forced us to be.”
The studios thought $29.99 was high enough so as to not overly upset the theater owners, but they were wrong. However, the price was also too high for most consumers. Would Sean Parker’s $50 price point really be much better?
When Netflix wanted to release Beasts of No Nation and the Crouching Tiger sequel in theaters on the same day the movies premiered on the streaming service every major theater chain told them where they could shove it. The same was generally true last year when Paramount experimented with shortening the theatrical windows for Paranormal Activity: The Ghost Dimension and Scouts Guide to the Zombie Apocalypse and cutting the theaters in on some of the VOD profits. However, among the major theater chains only AMC and Cineplex signed on.
Theaters have the leverage over consumers because of the exclusive windows granted to them by the studios. For a 90-day period, unless we resort to piracy our only option is to go buy a ticket and see a movie in a theater. This is in contrast to every other facet of entertainment which is less dependent on time, place or method of viewing than ever before. However, it is an essential component to the movie theater’s business model. Their intransigence on this issue is easy to mock, but it’s also completely understandable.
Meanwhile, the home video market is failing. Studios can’t lean so heavily on DVD sales anymore. When streaming first started killing physical media the studios adjusted by selling their back libraries to streaming services like Netflix. In so doing, they inadvertently created a giant monster which is now producing its own content and gobbling up movies, all with seemingly zero accountability since Netflix is not beholden to TV ratings or box office reports (nor do they even operate at a profit considering their staggering debt obligations).
As such, the studios are increasingly reluctant to continue feeding the Netflix fire, but they need some way to prop up home video sales. The radical solution is to shrink the theatrical window as a way of getting movies to consumers faster and cutting down on prints & advertising costs. However, every time the studios or perhaps an individual studio attempts this the theaters respond in unison, “Whatcha ya doing there buddy? That’s not how things are done around these parts.” They recently convinced Amazon to stick to an exclusive 90-day window for any of its theatrically released movies, but Netflix will continue doing whatever the heck it wants. Now here’s Sean Parker presenting an option that may or may not mostly appeal to the already rich, and the theaters are using the press to let it be known, “Again with this shit? Seriously, we will fight you.”
Sean Parker already helped to kill the music industry or at least one version of it, but could his new idea also bring about the demise of the movoe theater business? Unlikely. The price points ($150 for a set top box and then $50 a pop for each movie you rent) being talked about would likely narrow the utility of this service to an upper class. However, what the theater owners are scared of is letting the genie out of the bottle.
The question becomes whether or not there will ever be ideal price point which could please all parties. From a ticket-buyer’s point of view, $50 seems completely out of the question to me, but to many, many others it might hold considerable appeal. What about you? What would be a price you’d pay to see a major blockbuster movie at home on opening night instead of in the theaters Is that even something you’d want to do?