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Theater Owner Group Dismisses Sean Parker’s Home Movie Plan

The National Association of Theatre Owners said that movie theater chains will individually decide whether or not to back Screening Room, but in a statement Wednesday, the exhibition industry lobbying group dismissed the startup, while reaffirming its commitment to theatrical release windows.

“The exclusive theatrical release window makes new movies events,” NATO’s statement reads. “Success there establishes brand value and bolsters revenue in downstream markets.”

The group went on to say that any new distribution models should be created in consultation between studios and theater owners, not with the help of a “third party,” a clear dig at Screening Room.

“More sophisticated window modeling may be needed for the growing success of a modern movie industry,” the statement reads. “Those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.”

Screening Room, the brainchild of entrepreneurs Sean Parker and Prem Akkaraju, offers movies for $50 at the same time as they open in theaters. It plans to charge $150 for access to the anti-piracy equipped set-top box that transmits the films and will give customers 48 hours to watch the movies. It represents perhaps the greatest challenge to theatrical release windows since a 2011 DirecTV initiative to offer movies on-demand while they were in theaters. That push resulted in a fierce rebuke from filmmakers such as Michael Bay and Peter Jackson.

This time, some members of the artistic community seem convinced by what Parker and Akkaraju are selling. The startup has lined up several influential filmmakers, such as Steven Spielberg, Peter Jackson and J.J. Abrams, as advocates and stakeholders. In public statements, Abrams, Jackson and Ron Howard, another shareholder, have argued that Parker and Akkaraju’s model will create new revenue streams for the business by targeting consumers who do not attend cinemas. NATO seemed to take issue with that argument.

“Within a few days of the first report [on Screening Room], several different high profile movie directors publicly stated their support for the model, some claiming that the model is good for motion picture exhibitors,” NATO’s statement reads.

The group adds, “The owners and operators of movie theaters genuinely appreciate the vision and creativity brought to the big screen by motion picture directors. Nothing entertains movie fans better than a great movie exhibited in a modern movie cinema.”

AMC’s interest puts NATO in a difficult position. Unlike previous efforts to shorten the length of time between a film’s theatrical release and its debut on home entertainment platforms, one of the organization’s most prominent members is close to endorsing the plan. Other members, such as Regal, are not interested.

NATO tried to walk a delicate line in its remarks, urging studios and exhibitors to find middle ground.

“NATO has consistently called on movie distributors and exhibitors to discuss as partners release models that can grow the business for everyone,” the statement reads.

Parker is best known for his roles in Internet companies such as Napster, Facebook and Spotify. Akkaraju has ties to the entertainment industry from stints as a partner at the electronic music company SFX Entertainment and as global head of operations at Sanctuary Music Group. In addition to filmmakers, they have been working with Hollywood attorney Skip Brittenham, and Jeff Blake, a former vice chairman of Sony Pictures, was recruited as a consultant to make their case.

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