To Stream or Not To Stream?: Why Services Like Screening Room Could Hurt The Film Industry

to-stream-or-not-to-stream-why-services-like-screening-room-could-hurt-the-film-industry-1444852.jpg

Originally published on Creator’s.co on June 12th, 2017

Ever since the early 20th century, people across Americas have gathered in droves to go to theaters to see movies. It’s gone from a “black tie” event, where viewers would get dressed in their fanciest suites, to a stable of Americana, a form of everyday life. Of course, this isn’t just true in America, but across the world. For a while, the biggest film market has been North America but now it’s becoming China; making this communal event global in nature. Going to the theater to see the latest movie is an activity nearly everyone participates in at some point in their lives. Over the years’ other forms of entertainment have been introduced (the home television and video game markets being prime examples) but the theater has always been a constant since its inception. The theaters across the world provide millions of jobs for students, blue collar workers, management and work at a corporate level. Because of the wide availability of getting your film distributed into these theaters, it has led to countless amounts of independent filmmakers, like Kevin Smith and Quinton Tarantino, being able to share their voice with the world giving them a career in the process. Decade after decade this was the social norm. But, times are changing. A new breed of entertainment has been introduced to the public with open arms, digital streaming services.

These services use your internet connection to allow you to view movies and TV shows instantly from either your phone, TV, laptop, Blu-Ray or any other device that has access the internet. These services (Netflix, AmazonPrime, and Hulu) have already transformed the entertainment landscape. Big conglomerates like Blockbuster were forced out of business because of the changing cultural norm. No longer did people want to leave their house on a Friday to rent a movie at a Blockbuster video rental store; which charged the customer around 4.99 (or higher) for a three-day rental of one movie (anyone miss Blockbuster?). Instead, people chose to sit home and turn on their streaming services and have instant access to thousands of movies and TV shows (for as low 8 dollars a month). Soon these streaming companies started investing its own TV shows like House Of Cards and Orange Is The New Black. This has led to the TV area of entertainment to change, with channels like HBO and Showtime pursuing their own standalone streaming services (that wouldn’t require a cable package). Still, the movie industry has stayed just about the same as it always has. But the industry is starting to change and shift. Streaming services like Netflix have begun investing large amounts of money to produce critically acclaimed movies like Beasts of No Nation. Now, business entrepreneur Sean Parker is looking to affect even more change within the film industry. His new streaming service, Screening Room is a service that allows viewers to rent new movies that come out on the same day it’s released in theaters for 50 dollars and can be viewed for up to 48 hours. It is a physical media box that must be first purchased for 150 dollars before any sort of access will be granted to its streaming servers. The news surrounding this service has seemingly gone quiet as of late until J.J. Abrams brought it up again about a month ago (Variety reported in). So, I have been sitting on this thing for a while and rereading that article brought back a lot of thoughts I have already been having. The results of Screening Room could be disastrous for movie theater owners/employees, independent filmmakers and spike a surge in the amount of film piracy.

Movie Theaters And Concessions

Movie studios and theater owners have exclusivity towards one another. When a studio makes a movie and plans to give it a theatrical release there is a 90-day exclusive window where no digital streaming services or home media company can sell it or rent it (I would argue it should be longer but that’s a different article for a different time). This gives the theaters the chance to make the most money it can off the film and all the concession sales that come along with it. Concession sales, including popcorn, soda, and candy, make up for the majority of a theater’s profit. This is because they get to keep all the money that customers pay them; while the price of admission is split between the theaters and the movie studios that financed the movie in the first place. Roughly (although it’s different from movie to movie) the movie theater only gets to keep 1/3 of the original ticket price. On a 10-dollar ticket purchase, that means the theatre only made 3.30 dollars off the ticket purchase. Filmmaker and movie commentator Jon Schnepp notes,

we know that concession is where the theaters actually make their markup because the movies they barely make anything…popcorn and water for like 20 bucks is basically what you’re giving the movie theater…they get almost nothing of the actual movie (ticket)”.

John Campea of Collider Movie Talk also notes movie theaters have a lot of costs to earn back in real estate alone.

“Movie theaters are huge complexes with massive amounts of staff and we as audience members demand better quality pictures, better seating, better audio…these all cost money.”

So, if there is a lack of people going to the theaters and buying concessions (let alone tickets) how can theaters pay for these things? There are thousands of jobs within the theater chains but if there is a lack of people going to the movies and buying concessions then jobs will be dramatically decreased. This will include jobs at all levels of employment, the retail level to the corporate level putting many people out of work in America alone (not taking into account the global film market which could be different). The Screening Room encourages moviegoers to instead of going to the movies to stay home and eat the food within their own home (instead of theater concessions). With a large enough volume of people doing this, the theaters will suddenly decline. If there are less and fewer theaters across America than it will begin to force viewers to switch to the Screening Room. Especially, in areas more rural where people have to travel larger distances to get to a theater. I have lived in both cities and rural areas. When I grew up in Vermont it took a solid 45-minute drive to get to a good theater. In Chicago, I only have to walk down the street. Rural area theaters could be hit the hardest.

Indie Film Market

Clerks (1994) Directed By Kevin Smith (Miramax)
Clerks (1994) Directed By Kevin Smith (Miramax)

Less and fewer theaters mean the remaining theaters that are around will be forced to choose movies that will drive in large amounts of people. The movies they will choose? Event films. Films that have massive budgets, grand special effects, and movies with built-in brand name recognition. These are the movies that earn the most at the box office every year and it would be very appealing for theater owners to screen those movies as oppose too smaller and more unique looking films. Movies that would fit the description of event films (or also called tent-pole features) would be movies like Star WarsLord of the RingsBatman, or even Toy Story (just to name a few). The titles mentioned here have all at least grossed over a billion dollars worldwide at least once. This leads very little screens for smaller independent movies to be seen by a wide array of people. Filmmakers like a Quinton Tarantino or Kevin Smith would have had a bigger difficulty reaching an audience in this type of environment (at the beginning stages of their career). Both of their debut independent movies made under 4 million dollars. This transition of types of movies being screened is of course already starting to happen. We’re seeing less middle ranged budgeted movies. The current culture of moviegoers already sees less of the smaller sized productions. Hollywood screenwriter Max Landis (of Chronicle and American Ultra fame) spoke about the increasingly small amounts of money smaller movies make.

Movies make less and less money even though the huge movies make more money than ever, the little movies don’t make as much”.

In this climate where “little movies don’t make as much” what average filmgoer would spend 50 dollars to rent a small indie film on Screening Room? These filmgoers already aren’t going to these movies with movie ticket prices of just 10 dollars (or sometimes less)? Families aren’t going to sit around the TV to watch The Babadook. So where is the rationale there? Some theaters already have phased out many smaller types of movies. Studios and theater owners reach a deal for certain movies to have what is called “Day and Date” releases where it will be a small limited number of theaters (typically only big cities) that will screen the movie in theaters and then the movie will also be available to order on pay per view. The box office returns for films like this haven’t fared well. A movie like Z for Zachariah (starring Chris Pine) only made 121 thousand dollars. The independent film market is already facing challenges but the Screening Room could only compound those challenges.

Piracy

Yo Ho Yo Ho, A Pirates Life For Me! (Pirates of the Caribbean:At World's End (2007)) Disney
Yo Ho Yo Ho, A Pirates Life For Me! (Pirates of the Caribbean:At World’s End (2007)) Disney

The “Art House Convergence” (a theatre group that makes up about 600 specialty theaters) wrote an open letter to Hollywood saying,

“If studios are concerned enough with projectionists and patrons videotaping a film in theaters that they provide security with night-vision goggles for premieres and opening weekends, how do they reason that an at-home viewer won’t set up a $40 HD camera and capture a near-pristine version of the film for immediate upload to torrent sites?

Movie studios have been increasingly trying to find ways to combat piracy in the digital age. There has been large-scale online high definition leaks of major motion pictures like The Expendables 3 and X-Men Origins: WolverineNow hackers have been trying to hold hacked movies to ransom. Typically, around “awards season” the studios have a leak of movies because they send digital screeners to voting officials that are intercepted by pirates. For the anti-piracy culture, that the film studios of Hollywood breed, it seems odd to overlook this increasingly obvious fact that The Screening Room will lead to more piracy.

In a movie theater environment, there are checks to ensure no one can record the movie off the movie screen with their phone (and yet still, it occurs). There is no such check with a viewer at home. TV shows already have a much higher rate of piracy because of this fact (with Game Of Thrones taking top honors for most pirated TV show three years running, which also runs off two streaming services HBO Go and HBO Now). The widespread and unchecked balance of people pirating these high profile films could lead to millions lost at the box office. Just before the release of Expendables 3, the movie was illegally pirated nearly 2 million times. This could have led to as much as 20 million dollars’ worth of losses from the studio due to piracy. I think this number is certainly inflated a bit but even if it was a loss of a few million, that’s not good. With these millions lost Hollywood movie studios would have to resort to increasing ticket prices or lower movie budgets. Either way, you look at it this hurts the film going audience.

The Argument For…

Peter Jackson
Peter Jackson

However famed Lord Of The Rings director Peter Jackson has a different opinion,

The idea behind Screening Room…is try to make movies accessible for people that don’t go to the cinema…people have the idea that we’re trying to stop people seeing movies in the theater…no…theaters are the best way to see a film but there are so many people…that cannot go or won’t go it doesn’t suite their lifestyle…doesn’t allow that sort of luxury anymore…it’s targeted towards a group of people.”

This concept is interesting. There are many people that don’t want to go the movie theaters because of the cost or crowds. For families of 4, it already costs around 50 dollars in order to go the theaters anyways. And if you were like me and grew up in a more rural area, you have to factor in gas and travel times on top of that. A service like Screening Room offers a cheaper way for families to view the movies without spending the extra money in gas prices to travel to the theater. Screening Room also throws 20 of the 50 dollar price tag towards theater chains and two free movie tickets towards those theaters. Some would also point out that past technologies like VHS or DVD’s were thought by some to pose a threat to the future of Hollywood. Which is a fair point.

However, in cases like VHS or DVD’s, movies on those venues already were released in theaters, where studios and movie theaters make the vast majority of their money at. Screening Room would be showing movies while they are at the movie theaters. Screening Room may get a few people who stopped going to the movies but it will also increase that number because an easy to set up streaming box is encouraging to consumers. What could be easier than plugging something into a wall and instantly getting new first-run movies beamed into your living room? The profit cuts between Screening Room and theaters are also misleading. The theaters have to reach a deal with the company that makes Screening Room. This could lead a lot of smaller independent theaters left “out in the cold”, unable to make that money. The two free tickets also contradict the targeted audience of Screening Room. If Screening Room is for people that can’t go to the movie theater then why would they want two tickets to their local theater? It’s a gimmicky play by the product to ease the movie theater chain’s concerns.

The Push Back

Christopher Nolan With Leonardo DiCapio and Cillian Murphy-Inception (2010) (Warner Brothers)
Christopher Nolan With Leonardo DiCapio and Cillian Murphy-Inception (2010) (Warner Brothers)

There is some obvious good intention behind this project. As mentioned before some other high profile filmmakers have thrown their support behind it like Star Wars director J.J. Abrams (which made over 2 billion dollars at the worldwide box office) and Steven Spielberg. However other filmmakers have spoken out against it like The Dark Knight and Memento director Christopher Nolan(who got his start in the Indie film market) and also blockbuster superstar director James Cameron of Titanic and Avatar fame (which are the top-grossing film of all time).

“Our jobs as filmmakers is to keep making films on screen. We’ll continue to make this industry the greatest show on earth. My producer Jon Landau and I are committed to the theater experience. Despite what the folks at the Screening Room say, I think movies need to be offered in the theater on opening day. So boom, said James Cameron.

Christopher Nolan concurred with Cameron stating,

“Both Jim and I remain committed to the sanctity of the in-theater experience. For us, from both a creative and financial standpoint, it is essential for movies to be offered exclusively in theaters for their initial release. We don’t understand why the industry would want to provide audiences an incentive to skip the best form to experience the art that we work so hard to create.”

Conclusion

AMC Theaters
AMC Theaters

There will always be new technologies being introduced that might face resistance because it changes the status quo of something but then eventually go on to become a part of everyday life. Streaming was one of those things. It has now changed the TV landscape why not movies? Netflix also backed The Screening Room. However just because something is new doesn’t mean it is shouldn’t look at with scrutiny either. The Screening Room doesn’t hold up to scrutiny. Amazon Studios (Amazon Prime is their streaming service) also produces its own films and believes movies should run in the theaters as well (they produced the Oscar-winning film Manchester By The Sea). Not only would it hurt the movie theaters but it could hurt independent filmmakers in the process. Piracy would soar and production budgets would decrease.

OR, maybe it comes out and the film industry adjusts to it. Regardless this would shake up the status quo; I admit this line of thought for myself is the worst case scenario. Whether or not it’s a good or bad thing that the status quo changes remain to be seen. I hope that in 50 years, movie theaters will still be around. But, they also have to step up their game if they want to remain relevant. Make it an experience to go to the movie theaters. It’s no secret that a lot of the pomp and circumstance has left the theater-going experience, maybe bring that back? If you want people to choose you over a service like The Screening Room you have to compete and be better as well. You can’t just have Christopher Nolan fight your battles. There are plenty of great theaters out there. I want to continue to be able to go them in future.

Sources- Cinema Blend , Business Insider, Deadline, Indie Wire, Variety, USA TodayBox Office Mojo

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