Sean Parker's New Service Offers Theaters A New Revenue Stream But All They Can See Is Business Model Intereference And Piracy
from the don't-be-trying-to-hand-us-money,-freeloader dept
Any time anyone routes around Hollywood’s windowed food chain — theatrical release, delay, video release, delay, VOD, longer delay, pay TV, even longer delay (or never), on-demand streaming — studios and theaters get bent out of shape. This terrible system makes major studios and theaters happiest (and their own worst enemies), even though it’s apparent a large percentage of the public would rather enjoy films on their own terms.
Along with the complaints about the reshuffling of The Schedule come the inevitable cries of “PIRACY!” Sean Parker, formerly the major labels’ worst enemy, is now at the receiving end of motion picture industry hate, even though his plan — the “Screening Room” — involves everyone getting paid.
Parker’s pitching a day-and-date video-on-demand service that would allow customers to view first-run movies in the comfort of their own home — provided they’re willing to pay $150 for a “piracy-proof” set-top box and $50 for a single viewing of the new release. For reasons only understandable to those pitching the idea, the purchase price of the single, suprisingly-expensive viewing also includes two tickets for the same film non-moviegoers just watched at home.
I guess that’s the consolation prize: the inversion of leaving a game show with nothing but the home version of the game you just sucked at. In this case, if you felt you just paid too much to watch a mediocre movie at home, you have another chance to view it in the theater while paying much, much, much more for snacks. Or give them away to someone who you think doesn’t spend enough time feeling underwhelmed.
Parker did manage to secure some big name backers from major studios:
[S]creening Room’s board of shareholders and advocates includes Martin Scorsese, Taylor Hackford and Frank Marshall. They join [Peter] Jackson, [Brian] Grazer, [Ron] Howard, Steven Spielberg and J.J. Abrams.
Even though Parker has the support of several of the most successful directors of all time, the theaters are against it. Pamela McClintock of The Hollywood Reporter notes that the Art House Convergence — a group representing 600 independent theater owners — has issued a statment in opposition of Parker’s proposed service.
The letter says the group is not opposed to day-and-date video-on-demand per se.
We are not debating the day-and-date aspect of this model, nor are we arguing for the decrease in home entertainment availability for customers — most independent theaters already play alongside VOD and Premium VOD, and as exhibitors, we are acutely aware of patrons who stay home to watch films instead of coming out to our theaters…”
They’re just opposed to Parker’s plan.
There are many unanswered questions as to how this business model will actually work,” said the Art House Convergence. “The proposed model, as we have read in countless articles, suggests exhibitors will receive $20 for each film purchased. At first glance, an exhibitor may think it represents a small, but potentially steady, additional revenue stream. But how will this actually be divided among the number of theaters playing the purchased title; will exhibitors who open the title receive more than an exhibitor who does not get the title until several weeks later (based on a distributor’s decision); who will audit the revenue to ensure exhibitors are being paid fairly; does this revenue come from Screening Room or from the distributor … these are just a few of the issues yet to be explained…”
These are fair questions and ones that Parker and his backers will hopefully have an answer for. But the rest of it is ridiculous. The letter also includes sentiments that make the theater owners sound like Jack Valenti after too many microbrews.
The organization, of which Alamo Drafthouse founder Tim League is a leading member, said if studios and larger theater owners agree to the plan, “we will see a wildfire spread of pirated content, and consequently, a decline in overall film profitability through the cannibalization of theatrical revenue. The theatrical experience is unique and beneficial to maximizing profit for films. A theatrical release contributes to healthy ancillary revenue generation and thus cinema grosses must be protected from the potential erosion effect of piracy.”
It always comes down to piracy. Parker claims his service will be “piracy-proof,” but apparently if it doesn’t involve cable provider set-top boxes, it can’t be trusted. This piracy alarmism isn’t surprising, but the group making the hysterical claims isn’t the normal set of alarmists. Tim League has normally been a voice of reason amidst the “sky is falling” doomsayers. He may not have penned this letter, but he did sign off on it.
People paying $150 just for the chance to watch movies once at $50 per viewing aren’t pirates. And they’re probably not going to shell out that much money just to use it for some sort of trap-and-torrent Robin Hooding. Why Parker’s tech is considered somehow more prone to piracy than other VOD options isn’t explained. We’re just supposed to believe it’s running Piracy Wildfire OS because it isn’t being routed through cable/DSL hardware.
The organization representing the rest of the nation’s theater chains has also come out against the plan, though it has chosen to deliver a more muted response. No piracy alarmism here, but the group does make a couple of ridiculous assertions as well: release windows are still good, even though no one likes them but theaters, and the future of moviegoing should be decided by theaters, not third parties like the Screening Room nor, apparently, the public.
[T]he National Association of Theatre Owners, the trade group representing the majority of the country’s theaters, has come out against the proposal, acknowledging in a statement that perhaps more sophisticated distribution models may be needed to keep the movie-going business successful, but those models “should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.”
The statement reaffirms the belief most studios and theater owners share, that the exclusive release of films in theaters is what makes them successful for the lifetime of the movie. Says the statement, “The exclusive theatrical release window makes new movies events. Success there establishes brand value and bolsters revenue in downstream markets.”
So, the more things change, the more the arguments remain the same. Even with Parker offering a percentage of the take and encouraging Screening Room customers to patronize their local theaters by giving them two tickets with every rental, the studios still see nothing more than piracy and business model interference.
Parker’s service will likely have negligible impact on box office revenues. This may be a hesitant step towards the future of movie distribution, but it’s not likely to become the new Netflix and siphon off millions of moviegoers. Box office records continue to be broken despite streaming services, cheap rentals and piracy. The Screening Room isn’t going to change anything. And even if it did, it would just add another way for theaters and studios to make money, monetizing the small percentage of consumers who still love first-run movies but, for whatever reason, are unable or unwilling to patronize theaters. But all anyone can see is broken windows and a torrent seed in every rental.