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Studios, Exhibitors Consider Revolutionary Plan for Day-and-Date Movies at Home (EXCLUSIVE)

Tech moguls Sean Parker, Prem Akkaraju pitch industry on premium service offering $50 rentals of new releases

Five years ago, major studios attempts to offer first-run movies in the home months early set off a fierce standoff with theater owners.

Now, a startup backed by Sean Parker of Facebook and Napster fame is trying to encourage Hollywood studios and exhibitors to wade back into those controversial waters.  Called the Screening Room, the company offers secure anti-piracy technology that will offer new releases in the home on the same day they hit theaters, sources tell Variety.

Individuals briefed on the plan said Screening Room would charge about $150 for access to the set-top box that transmits the movies and charge $50 per view. Consumers have a 48-hour window to view the film.

To get exhibitors on board, the company proposes cutting them in on a significant percentage of the revenue, as much as $20 of the fee. As an added incentive to theater owners, Screening Room is also offering customers who pay the $50 two free tickets to see the movie at a cinema of their choice. That way, exhibitors would get the added benefit of profiting from concession sales to those moviegoers.

Participating distributors would also get a cut of the $50-per-view proceeds, also believed to be 20%, before Screening Room took its own fee of 10%.

Representatives from the Screening Room have been pounding the pavement in recent months, meeting with all of the major studios and feeling out exhibitors, more than a half dozen industry insiders confirmed to Variety. Parker, who is the major investor in Screening Room, has tapped former Sony Pictures worldwide marketing and distribution chief Jeff Blake in an advisory capacity. He has been working on the project and has deep ties to both the exhibition and studio communities.

At the presentations, Screening Room officials have told studio executives that they are close to finalizing a deal with AMC, which is poised to be the world’s largest exhibitor if its acquisition of Carmike Cinemas is approved by regulators.

There is serious interest from several of the major studios, including Universal, Fox and Sony, people familiar with the matter say. Those studios are continuing to study the business plan and deal terms and remain engaged in discussions with Screening Room. However, many cautioned that the talks are still in the initial stages. For its part, Disney does not appear to be interested in the plan.

One potential deterrent for distributors is that Screening Room is looking to be the exclusive content partner. This may give pause to studios like Universal that make movies available through parent company Comcast, or Sony, which has family ties to PlayStation.

On the other hand, the company’s anti-piracy technology could be appealing to studios who struggle with global content theft. Major films can be widely available illegally online in file-sharing sites within hours of their release.

However, some exhibitors worry that they would essentially be midwifing their demise by agreeing to shrink the windows — which continues to be a hot-button issue for theater owners. Regal, for example, has steadfastly refused to screen any films whose backers do not agree to a standard exclusive theatrical run of roughly 90 days. Box office hit record levels last year, crossing $11 billion for the first time in history. But attendance has been essentially flat in recent years.

Although a few studios, such as Paramount and Universal, have tried to cook up alternative distribution strategies in recent years, most distributors have been wary of upsetting exhibitors. Last fall, Paramount teamed with a few chains, such as AMC and Cineplex, on a plan that allowed them to release the pictures on home entertainment platforms 17 days after the number of theaters showing the films dipped below 300.

There have also been efforts to create technology that allows consumers to watch major studio films in the home. Prima Cinema, for instance, boasts a box that allows customers to screen new releases, but is priced at a much steeper $35,000.

In addition to Parker, Prem Akkaraju serves as CEO of the company and its co-founder. He was previously a partner at the electronic music company SFX Entertainment and was a partner at InterMedia Partners. In addition, he worked at JP Morgan Entertainment Partners and Sanctuary Music Group.

Representatives for Screening Room declined comment, as did AMC and the major studios.

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