Theater Owner Group Dismisses Sean Parker’s Home Movie Plan

Sean Parker Home Movie Plan Dismissed
Jordan Strauss/Invision/AP

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 50 dollar VOD Home Movies

Inside the Screening Room’s Bold Plan to Disrupt the Movie Business

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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  1. There’s an easy fix for the theatre owners, refuse to show any movies Parker shows on his box. Most people who don’t go to movies, either wait for the DVD or stream it later when released. Consistent movie goers want to see their movies on the big screen. Fail.

  2. Adam says:

    Actual ticket sales (attendance) in the US has been stagnant since 2002-2004 when ticket sales were at their height. This new proposed scheme would only make things worse for the theatre chains but I also see a limited demand for this $50 service. Unless you have a large family and/or plan on seeing the film several times before the 48 hour window is over, the $50 fee is really not cost effective especially if you live in an area where ticket prices are modest. I see this having a very limited appeal.

  3. Hans Dieter Ulrich says:

    The comments below may well be true – a lot of people would prefer to watch movies at home. Why then do you care what the theaters have to say? The theaters don’t control the release window, the studios do. If you feel a theatrical release adds no value to a movie, by all means distribute directly to the home – it’s called television, or HBO, or Netflix – you can do it now and ignore the theaters. Why people think the theaters would endorse a technology whose purpose is to put them out of business is beyond me – save your outrage for the studios. The studios could do this any time they wanted.

    But if you are trying to have it both ways – think again. You can’t inaugurate a business model that has at its core encouraging people to stay home and watch movies, and also expect that there will still be a viable movie theater business from which to earn box office income. Theater companies are public entities – you can look up their financial statements. Even if 85% of the audience still went out to the movies, 70-80% of the theaters in the US and Canada would close their doors and never re-open. A drop of 15% in attendance would shut their doors.

    The risk of this model undermining the theaters is completely asymetrical – why should you expect the theaters to embrace and adopt a new model for which all the downside risk is entirely on their side of the ledger? Mike Elison (below) seems to be screaming at somebody – who? Consumers want a lot of things – they want tickets to cost 50 cents, they want free music (and got it from Sean Parker), they want cold beer on alternate Fridays and cake on Mondays at tea time – it doesn’t make it a business decision.

    I don’t doubt that if this option is made available a lot of consumers will choose to stay home and watch the movie there…..and a lot of people will go to the movies, just fewer and fewer with each release. Maybe that will happen anyway – why should the theaters rush to accelerate it? People who like movies like going to the theaters – but they won’t be able to when they are closed. People liked going to book stores, Amazon saw the end of that. People liked record stores and browsing record bins – they loved it, it was cited as one of the most popular things to do on an afternoon at the mall or before the movies or dinner – been to a records store lately? Sean Parker and Napster saw and end to the record business fifteen years ago – way before digital downloads and MP3’s or Spotify were available.

    Sean Parker doesn’t care about movies, film makers or studios – he does it for money and when the movie theaters are closed and the concept of theatrical release is as dead as the video stores, he and all the apologists (and presumably Mike Elison) will have a thousand hair splitting explanations and excuses why killing the theatrical window had nothing to do with it — just as Jeff Bezos argued that selling books below cost had nothing to do with the demise of the books store, just as Sean Parker said socially acceptable music theft had nothing to do with the decline of the music business and just as dozens of studio executives said that devaluing their DVD’s with $1 rentals and $2.99 cutouts had nothing to do with the death of the DVD business.

    Back filling, hair splitting and post facto blaming the victim is what always happens when industry leaders (or in the case of Napster, negligent courts) allow a multi-billion dollar industry to be undermined by empty platitudes, phony arguments, counter-productive business models and lots of shouting and screaming about mythological “progress”.

  4. Mike Elison says:

    Theaters are all unwilling to change !!! WAKE UP AND READ BELOW ! ALL THE COMMENTS !!! CONSUMERS WANT CHOICE !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  5. harry georgatos says:

    These bloodsucking cinema chains refuse to acknowledge the screening room because they know a huge portion of film-lovers would rather watch movies at home. It isn’t about preserving a successful model in cinemas because if films became more readily available on home entertainment and the window shortened for movies to be more quickly available on home entertainment only confirms that people would rather watch movies at home! Cinema owners are charging exorbitant ticket prices where in Sydney Australia a standard session ticket costs a ridiculous $22.00!! It’s ridiculous as cinemas get 50% of the ticket! It’s time studios took back control of it product. I’m all for the screening room to happen. It’s time to cut out the middle man in cinema chains and deal directly with the householder!

  6. mollytopia says:

    I think the idea is brilliant! I would love the option to watch a movie at home for $50. This doesn’t mean I would never go to a movie theater again – I love going to the movies! It just means if I can’t make it out because of a sick child, or any other reason, I still have the opportunity to see the film. In my opinion, in some instances this option might be the difference between seeing a movie at home, or not seeing it all…Of course I understand why theaters don’t like this model, but I truly hope everyone in the industry will pull together to make this a reality. With the added revenue stream of the at-home option, there must be a way to neutralize theater losses so everyone wins. My fingers are crossed! Go innovation!

  7. Bill says:

    The “piracy proof” nature of the technology is laughable at best. Run one into an HDCP spoofed/stripper and/or point a video camera at a home display rather than a movie screen.

  8. justahunch says:

    Why would they support this?! This idea is not exactly good for their business. It’s a great way to begin the death of theatrical releases.

    • This approach is not benefiting directly enough the its most valuable “part” which needs urgent funding love and care – actors, directors, screen writers, independent producers . It is not including them broadly enough in the true riches’ of Silicon Valley guys – equity of the company they create. The presentation here is another Silicon Valley imposed technology which will build another form of Netflix, keeping control an wealth in the hands of Silicon Valley and feeding on continuous of biggest in Hollywood inability to make their own media platform or be able to tea, up with these who can offer platform technology and inclusive wealth model so it is us creates and independent Hollywood which can laugh all the way to IPO – and yes while we are at the media platform controlled by indepdents , let’s use it to finance films . Offer brought by Mr. Parker who will keep the biggest rewards to themselves – excluding creative part of Hollywood – not revenues – but equity in the company which can go into 10s of $billions in few years – it is who controls the platform , distribution and equity is more important than a technology- Imagine if Netflix was created by generous partner together with independent producers and able to get funding on the base on the equity , not film budget, just like we do in Silicon Valley – in 2007 I offered first mobile platform like that to CAA and “leaders” …. ultimately launched is in smaller version out of MONACO .today I am here with a major functioning media platform provided by $100billion partner of mine and I want to open it on the media channel and equity level to the independent producers embracing new film funding model as well. And turn the table; make Silicon Valley and their technology and money work for us in Los Angeles and not the other way around. Contrarian approach – it is Hollywood where the value is, not in the flavor of the set top box and platform. Power and equity into hands of the creative industry – and let Silicon Valley buy seat at the table for big money for producing independent films -including directed by women. Industry leaders either ACADEMY level or CAAs of the world and others are abdicating more and more of the economic and social value… different path is called for.

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