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

Schedule a meeting with Sean Parker at, say, 10 a.m., and the tech guru will likely take hours to show up. People who work with the visionary entrepreneur, whose peripatetic career has taken him from Napster to Facebook to Spotify, refer to it as Sean Parker Time. It’s the cost of doing business with one of the boldest minds of the Internet Age.

“He has his finger on the Zeitgeist,” said Arianna Huffington, founder of the Huffington Post, and a friend. “He’s incredibly convincing about where the world is going.”

When it comes to movies, Parker believes that the future is a couch-based one, but that view has its detractors. Theaters have resisted efforts to shrink the time between a film’s debut on the big screen and its launch on home entertainment platforms. That resolve could crack, after news broke in Variety that Parker and partner Prem Akkaraju have teamed to launch Screening Room, a start-up that offers new releases in the home for $50 per 48-hour view, and have managed to enlist such high-wattage stakeholders as Steven Spielberg, Peter Jackson, J.J. Abrams, Martin Scorsese, Ron Howard and Brian Grazer. Hollywood’s biggest rainmaker, attorney Skip Brittenham, is representing Screening Room. Another industry vet, Jeff Blake, a former vice chairman of Sony Pictures, was recruited as a consultant.

“It’s the first real shot across the bow,” said David Weitzner, a former studio marketing chief. “There can’t be an exhibitor worth anything that doesn’t know this is where we’re headed. Short of surrendering and sticking their head in the sand, this is something both sides need to work on.”

Parker and Akkaraju are trying to broker a peace using a persuasive olive branch — money. Their plan is to give exhibitors $20 of the $50 fee, and to offer two free tickets to a movie in hopes of encouraging customers to visit a theater and buy concessions at a future date. Akkaraju has industry ties from stints as chief content officer at electronic music company SFX Entertainment and as global head of operations at Sanctuary Records Group, helping to guide its 2007 sale to Universal Music Group . He also has Wall Street ties, having worked at JPMorgan Entertainment Partners and Intermedia Partners.

To pitch their wares, Screening Room’s leaders and their reps have crossed the globe, flying to Philadelphia to meet with Comcast CEO Brian Roberts, whose entertainment conglom owns Universal, and touching down in China to pitch Dalian Wanda, the parent of AMC Theaters.

Screening Room appears close to a deal with AMC, poised to be the world’s largest exhibitor with its pending deal to buy Carmike Cinemas.

That said, the idea remains a tough sell to exhibitors, perhaps as daunting as the one Parker faced when he tried to convince the music industry to view Napster, the music-sharing site he founded, as friend, not foe. “There’s no way exhibitors would be willing to risk their windows on any regular basis, or on significant movies to get a piece of this,” said Bud Mayo, president of Carmike Cinemas’ alternative programming and distribution division.

Universal, Fox and Sony continue to study the venture, while other studios are still reluctant.

Producer Jonathan Taplin, director of the USC Annenberg Innovation Lab, called Screening Room “a little niche play.” Because of the proposed pricing, “There will be some very rich people who will want to set this up in their homes. But it’s not a mass-market product.”

Others see a big upside. Court Coursey, managing partner of the Silicon Valley investment fund TomorrowVentures, called the proposal “disruptive/non-disruptive,” adding: “It adds a new alternative. But it has a positive impact on everyone, from theater owners to filmmakers to studios. I think overall it increases revenue.”

Coursey said his own fund might consider investing in the venture. “There are about 10 people we co-invest with who would look at this opportunity in a heartbeat … I don’t think raising money for this is going to be their challenge.”

If most studios are unwilling to risk exhibitor anger by backing Screening Room, the business model could be imperiled. Success depends on the quality of the content, analysts say. With several highly anticipated summer blockbusters, such as a “Captain America” sequel and the “Ghostbusters” reboot, on the horizon, studios may be wary of angering exhibitors, particularly if they threaten not to show certain movies.

“This is a big leap, and I’m not sure either side is willing to take it,” said Eric Handler, an analyst at MKM Partners. “Studios and exhibitors have a good relationship right now.”

But Huffington noted that both sides face the innovator’s dilemma, the term for when successful industries get complacent and fail to embrace new technologies that drive future business.

“Often people who are making a lot of money now don’t see why they need to adjust,” she said. “They refuse to recognize how the world is changing.”

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