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Screening Room Proposal Overshadows CinemaCon, Fuels Debate Over Release Windows

Screening Room has a shining marquee leader in Sean Parker and big-name backing from the likes of directors Steven Spielberg and Peter Jackson, but a powerful opposition army amassed this week against the in-home movie screening startup — theater owners.

Meeting at CinemaCon, their annual convention in Las Vegas, thousands of exhibitors from around the world repeatedly cheered as studio chiefs, producers, directors and stars pledged their undying allegiance to preserving traditional windows for theatrical film releases. Screening Room kept a low public profile — meeting behind the scenes with some exhibition executives — but its recent emergence still dominated the conference.

Screening Room was rarely mentioned by name, as when Warner Bros. chairman Kevin Tsujihara pledged to theater owners “we are not going to let a third party or middleman come between us.” But everyone gathered inside the giant Colosseum arena inside Caesars Palace knew who the Warner’s boss was talking about, even though it was just weeks ago that news leaked about Parker’s concept: a proprietary system for releasing films in homes the same day they arrive in theaters — at a projected $150 for a set-top box and $50 for each movie.

Screening Room may be the way of the future. Its bold plan to reconstitute the theatrical window also tries to assuage studios and exhibitors by cutting them in on the profits. In theory, that would enable those industries to help chart the future, rather than be swept aside or untethered by innovations, as the music business and home entertainment sector once were.

But sharing the wealth might not be enough. The opposition to the plan is highly motivated and fierce. Parker and his co-founder Prem Akkaraju face many hurdles before Screening Room can evolve from being just a grand theory to a new reality.

In one of the major news events of the conference, director James Cameron announced that he would make four sequels to his all-time box office hit, “Avatar.” But he delivered the news only after excoriating Screening Room as a threat to the movie-going experience.

“Together we’re going to continue to make this industry the biggest show on Earth,” Cameron told a crowd of exhibitors in the grand finale of 20th Century Fox’s presentation. “It’s essential for movies to be offered exclusively in theaters on their initial release,” he added. “So boom.”

Cameron said that the big, event movies that he is known for require a dramatic, communal presentation. “Our job as filmmakers is to keep making films that play best on that big screen,” he told the exhibitors from the Colosseum stage.

Even a director who recently completed a film — the thriller “The Neon Demon” — for theatrical release by Amazon Studios won over a CinemaCon luncheon by heaping hosannas on the moviegoing experience.

“Sometimes people can be impressive to listen to in terms of the future, but there will always be cinema,” said Nicolas Winding Refn, previously director of “Drive.” “All you people should really remember, you are not just showing great films — you are showing an experience that we will remember for the rest of our lives.”

The organization that runs the conference, the National Assn. of Theater Owners, signaled early in the week it didn’t want the digital upstart to get in the way of its chief business — letting movie makers and movie exhibitors commune with each other and celebrate their industry.

NATO chief John Fithian, at an opening press conference, called press reports about the service “a distraction,” while deriding Screening Room’s backers as outsiders in an industry that is working just fine without them.

“It’s not for a third party to decide that and until most of Chris’ members decide to support a model like this, and most of my members decide [to support] a model like this, it’s not an issue, right? It’s a theory,” said Fithian on Monday. “It’s up to the distributors and exhibitors to decide the future of windows.”

Bruce Frank, owner of Jupiter, Fla.-based Frank Theaters, said theater owners, already united in their backing of exclusive theatrical windows, were galvanized by their meeting in Las Vegas and the words of support they heard from studio leaders.

“We are united in our position and we believe the studios will be united in their position behind us,” said Frank, who operates 300 screens in 11 states.

“We fight together as an industry. We come together as an industry,” Frank added. “We recognize people will always challenge what we do, which is to entertain and provide socialization and interaction for people. We are not going away.”

Some theater owners acknowledged that change is coming, but there were concerns that any flexibility on the way that major films are released theatrically could threaten their business model.

“We definitely disagree with the idea of having them come out at the same time, one single time, instead of having the [theatrical] release be a huge event,” said Kathleen Gancy, the owner of Golden Star Theaters, which lists nine locations in the Pittsburgh area.

“There is still that collective experience, to be together and to have this experience, all together,” she added. “If we lose that, we will really be missing something. Why would we want to go away from a system that works?”

There were enough supporters with sufficient clout to signal that there remains a path forward for Parker and Akkaraju. It has signed on AMC, the country’s second-largest theater chain, while other industry figures such as Motion Picture Association of America chief Chris Dodd and STX Entertainment studio head Adam Fogelson said they would meet with the company. Most important, advocates such as Frank Marshall and J.J. Abrams urged exhibitors to be open-minded, speaking eloquently in defense of the need to be responsive to the new ways that people are choosing to access content.

Abrams told the Hollywood Reporter, “We are in a moment of disruption. I love nothing more than going to the movies. That’s the way it has to be. I also know I’m the father of three kids and I haven’t been at a theater on opening night [with them] in probably 12 years.”

For his part, Marshall argued Screening Room deserved a fair hearing.

“I think Sean Parker is a very smart guy, and I am open to see what he is thinking,” he said.

It was probably preordained that Screening Room would get a chilly reception in Vegas. The annual exhibition gathering seeks to sanctify the theatrical experience, with executives and movie stars all but treating watching films in a cinema, armed with a soda and box of popcorn, as a moment of pure transcendence.

Although many theaters have invested heavily in outfitting their locations with comfier chairs, better sound systems and projections, and more diverse snack options, it’s not clear that most consumers have the same reverence for hitting the multiplexes that they once did. Box office hit record numbers in 2015, fueled by a rapidly expanding global marketplace. Domestically, however, attendance has been essentially flat in recent years, and despite hitting $11 billion for the first time in 2015, the percentage of people seeing at least one movie a month actually declined.

Even when faced with signs that younger, tech-savvy ticket-buyers may not have the same attachment to movies as their parents, there remains a stubborn resistance to change both from theaters and, it must be said, from many patrons. In an interview with Variety this week, AMC Entertainment CEO Adam Aron floated the idea of allowing texting in certain locations as a way to attract younger, smartphone-addicted viewers.

His company, he said, must “be flexible and willing to experiment.”

The blowback online and even from rival theater owners such as Alamo Drafthouse head Tim League was intense. As Aron found out, and Parker and Akkaraju are likely discovering, innovation and experimentation aren’t always greeted with open arms. Sometimes they’re met with pitchforks.

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