Movie Theatre Resistance To Streaming Completely Misses The Point

Movie Theatre Resistance to Streaming Completely Misses the Point

Cinema owners are letting loose about Screening Room, the director-backed venture that will allow people to spend way too much money to watch a movie in their home the day it's released in cinemas -- but they're missing the point. As a concept, Screening Room is completely absurd. Mostly because it will cost $US50 ($67) to see a movie, but also because of the way it purports to share revenue with cinemas. The reason we go to a movie is for the experience and a night out. Of course, none of those things really bother cinema owners as much as the thought that people might stop going to the cinema if there's any other option.

Sadly, that misses the point entirely: if your business model is a monopoly, then you're not actually providing a good service. You're just the only option. Cinema owners should be focusing on making going to the movies worth it -- rather than fighting an unwinnable battle against streaming.

The US National Association of Theatre Owners, home to the giant American movie chains, put out a statement long on jargon and short on defence. It reads, in part:

The exclusive theatrical release window makes new movies events. Success there establishes brand value and bolsters revenue in downstream markets.

NATO has consistently called on movie distributors and exhibitors to discuss as partners release models that can grow the business for everyone. More sophisticated window modelling may be needed for the growing success of a modern movie industry. Those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.

So two things: one, the first paragraph isn't really gibberish, but it certainly looks like it. Two, it's basically saying that owners would prefer if no one interfered with the "special relationship" cinemas have with studios. That relationship being that no one else gets the movies in any form for a set period of time. So streaming services and VOD can butt right out.

The National Association of Theatre Owners (which I refuse to call NATO, because, well, there's a more famous one) has a slight problem, in that it can't unequivocally denounce Screening Room, because too many big names are already on board. And it's got at least one major member considering this partnership. According to Variety, AMC is close to endorsing Screening Room. So the association has strong words about third parties, but is ultimately letting each cinema decide what's best for it.

On the much stronger side is the Art House Convergence, "a specialty cinema organisation representing 600 theatres and allied cinema exhibition businesses". To its credit, it points out that giving cinemas $US20 ($27) from the $US50 ($67) price sounds great, but doesn't actually explain which cinemas will be getting it. And it says that Screening Room's plan to give out two free tickets doesn't really compensate them either.

It also understands that people want to stay home and has no beef with VOD. But Screening Room, in its mind, is a step too far. In an open letter, they write:

How will Screening Room prevent piracy? If studios are concerned enough with projectionists and patrons videotaping a film in theatres that they provide security with night-vision goggles for premieres and opening weekends, how do they reason that an at-home viewer won't set up a $US40 ($54) HD camera and capture a near-pristine version of the film for immediate upload to torrent sites?

This proposed model would negate DCI-compliance by making first-run titles available to anyone with the set-top device for an incredibly low fee -- how will Screening Room prevent the sale of these devices to an apartment complex, a bar owner, or any other individual or company interested in creating their own pop-up exhibition space? We must consider how the existing structures for exhibition will be affected or enforced, including rights fees, VPFs and box office percentages.

A model like this will also have a local economic impact by encouraging traditional moviegoers to stay home, reducing in-theatre revenue and making high-quality pirated content readily available. This loss of revenue through box office decline and piracy will result in a loss of jobs, both entry level and long-term, from part time concessions and ticket-takers to full time projectionists and programmers, and will negatively impact local establishments in the restaurant industry and other nearby businesses. How many of today's filmmakers started their careers at their local moviehouse?

Both the National Association of Theatre Owners and the Art House Convergence appear to be addicted to jargon. Ironically, the Art House Convergence is solidly against Screening Room, seemingly because of how easy it would be to abuse, as opposed to the National Association of Theatre Owners being obsessed with the sanctity of the exclusive theatrical release window.

Both of them are getting this wrong. For one thing, a dedicated pirate isn't going to be deterred because one venue is closed to them. Second, a person pirating isn't necessarily someone who cares enough to go to a cinema. Art House Convergence is more concerned that people will use Screening Room to illegally screen movies for large groups, which is slightly legitimate, but, assuming that Screening Room is intended only for private use, anyone using it that way is breaking a law.

The association wants to keep an iron grip on people seeing things, and they want people in cinemas, all the time. The only way the industry can see to do that is to make sure that there isn't any other way to see movies.

Ironically, the Art House Convergence probably has the least to worry about. And AMC probably shouldn't be backing Screening Room. The audience for small, independent, art house cinemas are still going to go to those cinemas. They want the experience of going to a nice venue. AMC, on the other hand, charges an arm and a leg for a barely passable experience. And that's the experience that's going to save the cinemas, not exclusivity.

The reason to go to a the cinema is to get out of the house. Maybe you grab dinner or drinks beforehand, meet up with friends or family or whatever you want. It's a chance to go out. A nice cinema adds to that evening on the town. A megaplex does not. Megaplexes basically hope that the need to see something when it comes out combined with the convenience of their size will keep people coming every week.

As movie prices inch higher and higher -- and the cost of going out joins it -- the big chains are going to be a harder sell. If they want to make cinema-going a worthwhile experience, the quality of that experience also going to have to go up. Staying home is more convenient and comfortable. So cinemas have to be worth the price of admission. [Variety [Torrent Freak]]

Image: cropped from Capitol movie theatre by Blondinrikard Fröberg/flickr/CC BY 2.0

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    $67 is super cheap! Unless you plan to watch the movie alone.

      What are the rules on selling tickets to your lounge-room "event"? Probably comes under the no oil rigs rule.

        Wait. I can't bring my oil rig with me to watch a movie? When did that discriminatory law get passed?

      Yup, thats my general outcome as well. It comes down to a decision between a night out, and all the added costs, or a night in, with a party around it.

      Personally, there might be a half dozen movies each year that I'd be interested in this way, and thats just not enough to justify it as an option. But if you can see a new release movie for $67 and watch it with half a dozen mates, it becomes value.

    For me it will depend on the audio/video quality of the stream. If it's VC-1 quality video or higher and at least Dolby TrueHD / DTS Master-HD then this will certainly be an option for me.

    I don't agree that the business model is "completely absurd". As the author suggests, people go for the experience. My girlfriend and I will happily spend $150 to go and see a movie at gold class or la premiere every couple of months. If we really wanted to see the movie I can definitely see us paying $67 to watch it at home and spending the balance on booze and junk food. The author also says that cinemas should be focusing on making a quality experience but I don't think any experience will be as good as the one you create for yourself at home. As long as you have a good screen and sound system and some comfy couches, you are set. Teach your dog to fetch you drinks and can you beat that?

      Holy sheet, $150 to go see a movie? You must use at least a $20 note to wipe after going to the toilet too?

      One can definitely provide a better experience at home, other than the great big screens that they provide at the cinemas

      P.S. The food sucks at Gold Class, and they've never gotten it right because they have reheatable stuff that the attendants can heat up in a microwave or easily prepare.
      P.P.S. films in 3D aren't worth it, let alone paying extra at the cinemas for.

    The author has it spot on, cinemas need to focus on finding ways to attract patrons not protect their monopolies. I haven't gone to watch a movie since star wars came out and probably hadn't been to the cinema for ages before that because I can't take my dog to the movies. There's nothing better for me than sitting on the couch with my dog in my lap. I also usually want to go to the cinema around a meal time and don't want to end up having popcorn for dinner. So there's two things they could introduce to get patrons interested, good food and let you bring pets. (Ok the pets thing would be hard to do since it's hard enough getting people to shut up, let alone animals but still. My dog is the best.)

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