Hollywood v Sean Parker: The Case for Home Movie Services (Opinion)

Big-Screen Blockbusters Like Batman v Superman
Courtesy of Warner Bros.

With CinemaCon around the corner, an epic exhibition showdown is brewing in Hollywood.

In the wake of the news that entrepreneur Sean Parker and former SFX Entertainment executive Prem Akkaraju have teamed up to launch Screening Room, a startup that offers new film releases in the home for $50, a number of major filmmakers have spoken out against the proposal, which was first reported by Variety.

Filmmakers including James Cameron, Christopher Nolan, Roland Emmerich and M. Night Shyamalan have lined up against the plan, while Screening Room’s all-star lineup of backers includes Steven Spielberg, J.J. Abrams, Peter Jackson, Martin Scorsese and Ron Howard.

But as I read the various critiques, offered via statements and tweets (it’s unclear if detractors have heard Parker and Akkaraju’s pitch themselves), I kept getting hung up on one particular assertion. “Jim [Cameron] and I are committed to the sanctity of the in-theater experience,” producer Jon Landau said. “The movie-going experience is something to fight for,” M. Night Shyamalan added.

Filmmakers need to put aside lofty rhetoric about the value of the theater-going experience and realize that modern audiences are already consuming film and TV in different ways.

Just ask Cary Fukunaga, Brad Pitt or Will Smith, all of whom are making movies — big and small — with Netflix.

“What I’ve learned is that most people, even my friends, if they have busy lives — they’re just going to watch on whatever platform is available to them,” said Fukunaga in an interview with Variety last year. “It’s just the reality of now, in terms of filmmaking.”

And have filmmakers like Cameron or Nolan actually been to the local multiplex lately, or is the “sanctity” reserved for their own private screening rooms?

The choral crunching of the loudest food known to man, the vague smell of feet, the entitlement of those whipping out their cell phones — this is not a sacred environment. For most, going to the movies isn’t a time of worship like it is for those in or dedicated to the film industry. It’s an escape. And unless you’re bent on changing human behavior, that isn’t likely to change.

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Some companies — like the Arclight and Drafthouse theater chains — are committed to an ideal experience, booting audience members who text during the movie, preventing entry once the film begins, etc. But for as many years as those practices have been in place, they have remained premium realities rather than standardized ones.

Larger companies have implemented more substantial premium experiences, but they remain notably limited. For example, the aim with AMC Theatres’ recent partnership with Dolby Laboratories — “Dolby Cinema at AMC Prime,” which marries the comfort of the theater chain’s already-exclusive plush seating auditoriums with Dolby’s dual laser projection and state-of-the-art sound technology — is to have roughly 100 such venues up and running by 2024. Hardly wide-ranging, and by that time, things like Screening Room may have already changed the game anyway. (It’s worth noting that AMC has signed a letter of intent to partner with Screening Room.)

Nolan, who echoed Landau and Cameron’s joint thoughts on the service without detailing his own, has spoken about the less-than-ideal theater-going experience in the past. “For some reason, it has become acceptable to say we are providing this empty room with a TV in it,” he said at the BFI London Film Festival in October. “We’re not putting on a show. That has to change, and if that experience for the audience is not valued, people will stop going.”

He went on to decry a growing trend among repertory theaters of projecting Blu-rays. “Exhibitors need to put their best foot forward and have standards,” he said. “No cinema should be showing a consumer grade format to an audience.”

But what incentive do theaters really have to provide an ideal viewing experience? It’s no secret that exhibitors are as focused on the popcorn and candy business as the movie business. Their money is made at the concession stand, not in the brutal percentage game of box office receipts. I remember my days working in a theater where management refused to replace projector bulbs running at 40% illumination because of the expense and the screens were stained from God knows what.

The whole brick-and-mortar paradigm is obviously crumbling, judging by the fate of record and book stores. So why should movie theaters be any different, particularly if there isn’t much interest in “putting on a show,” as Nolan said? And even if there was interest, there’s not a lot to bolster confidence. Quentin Tarantino made his best pitch for offering audiences a unique theatrical experience with his “Hateful Eight” roadshow in December, projected in 70mm at 100 venues nationwide, many of them retrofitted with new projectors. The film brought in only $6.6 million during that limited engagement and distributor The Weinstein Co. seemed eager to get it out into the multiplex marketplace, pulling the wide release up a week.

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So while I’m sure there’s a fair rebuttal to Screening Room, I don’t think “the sanctity of the in-theater experience” is it. That’s not to say there aren’t inherent concerns, though.

For instance, we still don’t have details on the service’s “robust anti-piracy strategy,” as Jackson put it in his statement. That was a sticking point for the Art House Convergence, a specialty cinema org representing 600 theaters that issued a statement in opposition to Screening Room. My question is, what’s to stop someone from Periscoping an entire film? That proved to be a problem for HBO and Showtime during last May’s Mayweather-Pacquiao boxing match, as countless viewers simply used their smartphones to re-transmit the fight.

Also, will there be a premium or ban on commercial venues? For the MayPac fight, bars paid anywhere between $6,500 and $15,500, depending on capacity (compared to the $89.95 consumer rate). Will a venue simply be able to purchase one of these set-top boxes for $150 and exhibit the latest release every weekend to its clientele?

I imagine a number of the big-time backers that Parker and Akkaraju have assembled have wanted to embrace this inevitable shift for some time. The difference now, given that the Screening Room plan will send as much as 40% of the $50 fee to exhibitors, is that they’ve been presented with an option that doesn’t cut theatrical out of the equation. The proposed service “does not play off studio against theater owner … it respects both,” Jackson said. “Screening Room was the only solution that supports all stakeholders in the industry,” added Ron Howard and producing partner Brian Grazer.

And perhaps some of the ancillary business concerns — particularly the video and on-demand revenue — would be rendered less relevant if some first-time audiences were paying $50, rather than $5, to see a new movie like “Batman v Superman: Dawn of Justice.”

More importantly, growing the business by expanding the audience is a stated goal. Movie-going has been flat in recent years, with ticket sales hitting a 20-year low in 2014. Right now, only 11% of Americans and Canadians frequent the cinema, per a report from the Motion Picture Assn. of America, and 32% of the entire U.S. and Canadian population doesn’t go at all. Meanwhile, the theatrical window has continued to collapse. Two years ago, DreamWorks Animation CEO Jeffrey Katzenberg predicted that within a decade, films would be available on a pay-per-screen-size model as few as 17 days after their theatrical opening.

The National Assn. of Theater Owners copped to all of this turbulence in its official response to the Screening Room news. “More sophisticated window modeling may be needed for the growing success of a modern movie industry,” the org said, adding for good measure that “those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.”

Whoever develops the model, the time has come. And next month’s CinemaCon — an annual exhibition confab hosted by NATO — will likely mark the dawn of an epic showdown in Hollywood.

The data chart was provided by the MPAA. 

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  1. Billy Bob says:

    You contradict yourself in the article. You rightfully say the cinema profit margin comes from its concessions. How is this going to “help” cinemas when people are staying at home? This is the perfect recipe to put cinemas out of business. For the life of I can’t understand what AMC was thinking by signing their own death notice.

    • See my response to KC re: the (presumed) incentive to get people in the building by supplying a pair of tickets. But I don’t know where the contradiction is. I never said this would “help” the cinemas. Only that the “sanctity” argument is a little rich at this point. You’re right to wonder what AMC is thinking. I think at this point there are many more questions than answers, so I attempted to pose a few.

  2. Julian Harold says:

    The “piracy” defense of day-and-date is fallacious. The filmmakers, including small independents, rely, and must have the exposure that a theatrical release provides in order to breath life into each new film title, rather than kill into obscurity any chances of financial success for the filmmaker, on that same day-and-date release date.

    The losers of this thing will be everybody except the proponents.

    Maybe it is time for NATO to enter the film production business themselves.

  3. KC says:

    Riddle me this. If audiences say they don’t go to the theater as often because there aren’t any good options, and Screening Room’s premiums cater to brands, (aka big budget blockbusters like Batman v. Superman), how exactly is Screening Room resolving the weaker audience issue?

    Not good enough? How about this: Screening Room came up with an equation they figured would keep distributors from complaining. It turns out they were wrong, the distributors still found issue with the proposal, and rightfully so. But assume they hadn’t. Assume they were on board. How does paying off a distributor to watch a movie benefit the consumer? It has been mathematically figured that an ounce of U.S. theater popcorn costs more than an ounce of filet mignon, and Screening Room is suggesting they’ll cover that lost fee by charging the at home viewer a premium and simply handing the cash over to the distributor. What do you think that will do to which films get greenlit, or not, and how long do you suppose the consumers will tolerate it?

    Still not good enough? OK, let’s talk Chris Nolan. Don’t you want to find more original voices like Nolan’s? The Memento phenomenon was possible because the movie was in theaters for 6 months. Those days are gone now and with Screening Room, theater time will be even shorter. Listen to Bill Mechanic on the issue: “Anything that tries to eliminate the theatrical window or shorten it where it doesn’t matter is completely short-sighted. And if you are in a business that no longer has theatrical, it becomes the land of the giants … then it is a question of only what can break through the clutter,” Mechanic told Deadline from Australia where he is working on the film Hacksaw Ridge with Mel Gibson. “It’s very myopic to think that it’s not ultimately destructive.”

    He said in the long-term it is ultimately bad for artists, especially those who want to make movies with a more artistic bent, to stand out in the marketplace. “Once you’re in to the Internet, you are no longer one of 16 films in a theater or eight films in a theater or even four, you are one of tens of thousands of entertainment products being streamed. You’re going to get lost.”

    Don’t you want this art form to continue? I sure do. And let’s go back. How did Newmarket Capital even know to keep Memento in theaters for so long? After the premiere little groups of people, friends and strangers alike, hung around by the valet for hours arguing and trying to sort out plot points. In other words, the moviegoing experience sold those tickets. There’s more to it than just being in the dark with strangers.

    I’m still waiting to hear one good reason. A REALl reason, for Screening Room to exist. Anyone?

    • “…and Screening Room is suggesting they’ll cover that lost fee by charging the at home viewer a premium and simply handing the cash over to the distributor.”

      Actually, the service does provide a pair of tickets to see the film in the theater as part of the $50 fee, so presumably there is incentive still to get viewers into the building and spend on concessions. I’m not saying that’s not a dubious proposition, though. (I don’t know how many would turn around and go to the theater to see a movie they specifically ordered for in-home, for instance.)

  4. Tad Allagash says:

    People keep comparing brick and mortar book stores and record stores to the movie theater… They are not the same thing. Books and albums are meant to be read and listened to at home or wherever convenient.

    Theaters, on the other hand, are more like concerts, people go for the communal experience, to see the band or film they like, for the brief period that it is in town…

    Is it delaying the inevitable to oppose Screening Room right now? Probably, when in 20 years our viewing experience will be mostly made up of watching films on TV-sized screens in our driverless cars as they shuffle us from point A to point B…

    But I think that it is worth it to at least attempt to perfect a set-top day-and-date box, before everyone gives in and shoots their own feet without knowing all of the details and the potential ramifications of a less-than-flawless version of it…

    That pirate-eye anti-piracy system in theaters seems to work, if it is a home version of that, included on the box, then it is possible that they could limit the pirates, but they’ve always been a resourceful bunch…

    From what I’ve heard, Screening Room will have watermarks on the films, but the pirates just end up blurring those out of the recorded videos, so it’s hard to tell what effect that will have on this, if indeed that is the only anti-piracy measure included…

  5. Momus15 says:

    Are you learning impaired, Sean? Do you think everyone in America has a 90″ TV in their beach shack? Their studio apartment? Their double-wide? Do you even know what a double-wide IS? Movies are supposed to be seen 32 times life-size from the get-go – that is the way they are designed and shot by the hundreds of us bottom-feeders who make them. The fact that people are now watching them on tiny tablet screens and laptop screens, and even tinier phone screens is a tragedy in and of itself. There is no way they can transport you when you’re sitting on a subway or a cab or even a limo punching in and out of a movie while checking your email. They are meant to TRANSPORT you – sitting in a dark room, far away from your real-life. Go to the theatres, young man, you will be surprised at how magically they do this.

  6. Jacob says:

    You are so completely offensive. Are you really unable to wait the 90 days to watch a movie. There are thousands of content to watch now, why does it have to be the movie that is out in theaters? Perhaps that’s the point you miss, as soon as you let all movies available at home –day and date– you set the stage that no theater experience is necessary. If you wanted to watch batman vs superman now — you have to go to the theater. if you don’t, then wait the 90 days, it’s not a big deal.

  7. The Truth says:

    Each year during awards season, the studios invite AMPAS and guild members to view their contending films in state-of-the-art screening rooms in Los Angeles, New York, London and other locations. Yet the vast majority of academy and guild members elect to watch DVD screeners in the comfort of their homes on their own schedules. What does this incontrovertible fact indicate regarding the sanctity of theatrical viewing? And now with the advent of practical ultra-fidelity virtual reality rigs, the potential for immersive on-demand motion picture experiences that significantly eclipse theatrical viewing is close at hand.

    The price point for first-run home viewing is destined to become more affordable than Screening Room’s financial model once unwarranted subsidies to theater owners are inevitably excised from the spreadsheet. The future of motion picture viewing is not in theaters, no matter how luxurious, and in-home consumers should not be compelled fork over a hefty surcharge just to prop up the outmoded bricks-and-mortar business model they opt to avoid. Should you pay through the nose for home delivery of take-out meals because a restaurant owner wants to keep his old school dining facility alive? Inconvenience is a necrotic value proposition, plain and simple.

    Of course, those who prefer the theatrical experience should be free to schlep to the multiplex at the appointed times. If you want to, you can still go to Amoeba when they’re open and purchase CDs or even LPs. But there’s no question that a much larger audience would rather pay a reasonably elevated fee to stream a first-run movie at home whenever they choose than be forced to wait until the annoying exhibition window expires. How long can the studios continue to ignore this reality?

    Hopefully technology can overcome piracy. But regardless, there are legions of movie lovers willing to compensate those who make films by paying a fair price for the accessibility of first-run in-home viewing. Why prolong the evolution of theatrical viewing into the niche business it should clearly be in the digital age? The longer the wait, the more attractive piracy becomes.

    • You say that “the vast majority of academy and guild members elect to watch DVD screeners in the comfort of their homes on their own schedules. What does this incontrovertible fact indicate regarding the sanctity of theatrical viewing?” That they’re lazy and are shortchanging themselves by not going to the theatre to see these films. You also say that new technology will soon offer “the potential for immersive on-demand motion picture experiences that [will] significantly eclipse theatrical viewing.” The only problem is you’re overlooking one thing — the audience. Aside from those people who absolutely must see a film when it first comes out, most people can wait to see it at home if they choose. One of the main reasons that people go to the theatre is because of the communal experience. I don’t care how spectacular your home theatre system is, unless you invite over a few hundred of your nearest and dearest friends, you will still not have the same experience that one gets in a packed theatre. And that may be fine if you’re a misanthrope or hate crowds. But for those of us who appreciate the oohs and aahs, or the shared laughter, from the crowd, nothing can replace the theatre experience. So I hope you enjoy watching all the movies you see in the isolation of your living room in front of your giant screen TV. I will be enjoying the same film with my family and friends, and a thousand other people who appreciate what it means to be in a theatre.

    • Greg says:

      Because once you reduce revenues coming from theaters, you lose the money to make these movies.

  8. Hans Dieter Ulrich says:

    Everyone who supports this carries on about how people want what they want where they want it, or theaters suck or some other reason a lot of people would prefer to stay home. This is an argument without a response…..it’s almost certainly true. The issue is not whether a lot of people would use this service at home, I’m certain they will. I am positive they will, and they will like it much more than going to the theater. All true — all beside the point and irrelevant to the actual argument and cause of the theater owners’ objections.

    The central issue for a film maker, as opposed to a television producer, is whether the theatrical release and showcase for a film is at all important to the success of their product. If it is not, if you believe a “movie” premiering at home on television it’s the SAME as a theatrical release, you can stop releasing your movies theatrically now. It’s not required by law, you have to choose to do it. You can put your movie on PPV/VOD on iTunes/Amazon immediately or Netflix. It’s unlikely you’ll recover the $30-40m it cost (low budget is a different animal) much less the $200m for Star Wars, but have at it……Do it now….just say yes, stop arguing with the theaters, your life will be far simpler.

    But if you think theatrical release is the essence of being a film, then there must be theaters to show your movie. Theaters are a brick and mortar business, not mouse clicks. They pay rent, have real, and large, capital costs, employees, electricity, refrigeration Hvac etc. They operate at a 15% – margin and have to continually reinvest in digital sound, then stadium seating, then 3D, then digital projectors, then enhanced food service, then large format theaters and whatever comes next.

    Expecting them to support a service which has a central purpose to convince people to NOT go to the theater is asinine. Don’t expect them to support it, expect them to fight it. If they are irrelevant to the movie industry, as Tapley argues and most commenters seem to agree, they will die ugly deaths and it won’t matter one jot to the movie business.

    But if you think theaters play an important role in the movie business (as opposed to TV), then this service is another nail in their coffin. Maybe they are fashioning that coffin themselves, or maybe your objections are so much self-serving hot air that ignores the reality of operating a mass market venue based business. (Have you seen a stadium after a basketball game, or an arena after a concert?) But if you want movie theaters in your future you need to recognize that an exclusive playoff window is what makes them work. Supporting business models designed to out them out of business will kill the theaters and with it what you now think of as movies.

    If I’m wrong, go ahead and produce and finance a $100m movie and premiere it on Netflix…..oh, they’re doing that…….Let’s see the p&l for that movie…..not the netflix service, that’s their business, but the MOVIE itself – because that’s your business if you’re a studio or a producer.

    If the results are the same without the theaters, then I’m wrong…..we’ll all know at cinemacon when netflix reveals how much the Adam Sandler movie has grossed..But as you’ve guessed, they’re not doing that.

  9. James says:

    Unmentioned in the article is the reality of today’s home viewing experience. With HD and at least decent sound quality now the norm in most homes, the gulf between the movie-going experience and the home view has narrowed considerably. Screen size is a matter of scale, so a 50 inch HD screen in a small room looks quite large to the viewer. And theatres’ move to digital cinema projection from 35mm film, while cost-effective, was a step down in theatrical visual quality, IMAX included. Simply put, the value of the theatrical movie-going experience just isn’t worth the price of admission to a growing number of movie lovers who like a good show almost as much as their privacy.

  10. The biggest problem I see with the Screening Room concept is not the possibility of it making inroads on the “sanctity of the in-theatre experience,” it’s the cost. Unless you have a pretty elaborate home theatre set up, for the most part, you’re going to get a better viewing experience in a theatre than you will at home. So the real question is, will the average film goer be willing to pay the same amount or more per person to watch a film on their 40 or 50 inch TV at home vs. seeing it in a theatre? I, for one, will not. Truth be told, at this price point, the only people who really benefit from this are those than can gather together a group of five or more (all of whom they would otherwise have paid for to go see the film in a theatre) to watch the film. For those of us who typically go to see films with just one or two other people, $50 is just too much to pay for the “privilege” of watching the film at home.

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