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Screening Room Study: Interest Is High, But Price Is a Problem

Consumers are interested in paying to watch theatrical releases in their home, but there is a hard cap on how much money they are willing to shell out to check out new releases from their couch, according to a new study by MarketCast.

The report from the tracking and research service represents the first public study on the popular appeal of Screening Room, the new start-up that wants to offer movies in the home the same day they debut on big screens. The study, released Wednesday at CinemaCon, did not mention Screening Room by name.

Screening Room is the brainchild of Sean Parker (pictured above) and Prem Akkaraju. It wants to offer movies for rental for $50, plans to share profits with theater owners and studios and has attracted the support of filmmakers such as Steven Spielberg, Martin Scorsese and Peter Jackson, but studios and filmmakers such as Todd Phillips have blasted the proposal.

One in four consumers said they would “definitely pay to use” that kind of a service, but some balked at the proposed $50 price tag. On average, interested consumers said they would spend a maximum of $35 to rent a new movie at home.

“Sticker shock is playing a big role,” study author and MarketCast VP Chris Rethore said.

Rethore said the most revealing aspect of the study was its finding that interest in Screening Room was highest among avid moviegoers and older parents. He also warned that using the service would not necessarily lead to more overall revenues for the movie business.

“Interest in a new premium VOD service was concentrated among those who are the most active in the category,” he noted.

“These consumers — especially parents — are more aware of the fully loaded costs of moviegoing and have additional incentives to want early access to some films at home. But these consumers are also hugely important to the economics of the current theatrical model, and most see this service as displacing existing moviegoing behavior – not expanding their paid consumption of entertainment content overall.”

There were other drawbacks beyond sticker shock. One in three respondents said they would “definitely not” pay to use the service, both because of the cost and the fact that Screening Room requires customers to pay $150 to use a box that comes with anti-piracy technology. Nearly eight in 10 consumers didn’t like the idea of needing to have another set-top box style piece of equipment in their home — and more than one-third say that even if it were free, they would not want to have another set-top device in their home.

Rethore noted that the study indicated that younger parents tend to under-estimate the costs of going to the movies. The study showed that seven in 10 moviegoers estimate their average trip to the multiplex at $40 or below (inclusive of tickets, concessions, transportation/parking and/or babysitting), and as a result, fail to embrace the value of a $50 service.

The study was conducted in late March, and MarketCast surveyed 1,200 Americans between 18 and 64 to get its results.

Half of consumers “strongly agree” that they like the experience of going to the movie theater, and that the new service will not be able to replace that. “This finding held whether or not the film in question was a big budget action-genre title (only 21% would choose to watch through a premium VOD service) or a less spectacle-driven arthouse film (20%),” MarketCast added.

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