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

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.

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.

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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