Major directors, from Peter Jackson to Ron Howard and at least one major exhibition chain, are initially supporting Facebook and Napster cofounder Sean Parker’s The Screening Room, the controversial new day-and-date home viewing option for new releases. Art House Convergence, the association of independent specialized theater owners (though not industry leader Landmark Theatres), has sent an email polling their members about what their formal response should be, as all sides assess The Screening Room’s potential impact on the industry.
Parker’s The Screening Room would sell home viewers a $150 device, which would give them 48 hours to watch new movies on the same date they open at theaters for a $50 dollar per household charge. This would equate roughly to the expense of four adult full price tickets plus more expensive theater concessions plus driving/parking costs, but with the convenience of not leaving home.
This is the most serious attempt yet at finding a solution to ongoing studio concerns about the long-term viability of the current theatrical first model, followed in 90-120 days with home viewing. Parker wants to ameliorate theater concerns with a rebate program which allows them to share revenues. As deep-pocketed Netflix (which goes day-and-date) and Amazon (which offers a 30-day theatrical minimum) are buying more and more movies with gradually increasing budgets for home streaming well ahead of that window, many fear that online competition for movie fans is only going to increase. This provides a way to assuage concerns on all sides of the current studio/theater paradigm.
The theaters owners maintain that while the studios have myriad options for making their money back on their investment in movies, exhibition has only two: Showing movies in theaters with concessions on the side. That’s why sharing revenues is one way to find a day-and-date solution.
The Art House Convergence email suggests uncertainty from one segment of the exhibition community. AHC asked their members’ input on how to respond, opening up a discussion rather than going out with a leadership position completely against it. This reflects the division among major circuits.
NATO (the National Association of Theater Owners), which represents most of the largest exhibitors, has yet to issue a position on the issue. If AMC, currently the second-largest chain, successfully merges with fourth-ranked Carmike, they will replace current #1 Regal as the top exhibitor in North America. Variety reports that AMC is considering how The Screening Room might work, while other top circuits seem less receptive. Unlike other top companies, AMC has been willing on a case by case basis to show films released initially on VOD, although adhering to NATO policy by pacting with distributors to rent out ("four-wall") auditoriums rather than playing them as conventional dates.
And significantly, Art House Convergence members have also shown less resistance to same day programming. Drafthouse Theaters and its head Tim League, a major force within AHC, aggressively pushed Sony to release their pirated "The Interview" to theaters over Christmas, 2014 to theaters. With most major circuits resisting, some of these theaters boasted some of the top grosses for the film and higher results than they often see. So it makes sense for AHC to be more concerned about being part of the discussion (and being considered for inclusion) than to initially resist.
As reported initially in Variety, the outreach to exhibitors includes as part of the deal having each $50 purchase include two free tickets for local partner theaters. This would then bring people into the theaters where they would purchase concessions, the revenue pile from which exhibitors get a far higher return than from shared income from ticket sales.
From the studios’ standpoint, at a time when DVDs and Blu-ray sales are declining, this would bring new revenues to replace that lost income. At present, they are at the mercy of multiple VOD services with delayed delivery and less control over marketing. A simultaneous release would increase the premium price customers would pay at a return to them as high or higher than what they take from theaters (slightly over 50%). And it would allow them to concentrate marketing costs at a more centralized point, rather than hoping customers would retain awareness and interest for months down the line (and then requiring some more modest marketing).
Peter Jackson, among leading filmmakers now on record supporting this venture (contrary to his and other’s opposition in 2011) released a statement Sunday. He justifies backing The Screening Room as supplementing rather than replacing the theatrical experience and bringing untapped revenues into production. From his perspective, The Screening Room "does not playoff studio against theater owner. Instead it respects both, and is structured to support the long term health of both exhibitors and distributors – resulting in greater sustainability of the wider industry itself."
Jackson joins other major directors Steven Spielberg, Martin Scorsese, Robert Zemeckis, J.J. Abrams and Ron Howard, who also support the concept.
Also on board, adding insider legitimacy to the project, is industry distribution titan Jeff Blake, former long term President of Marketing and Distribution and consultant for Sony Pictures. (Ironically Blake oversaw the release of Facebook founding film "The Social Network," in which Sean Parker was portrayed by Justin Timberlake.) Blake will likely spearhead complicated discussions with both studios and theater chains, with much of the interplay likely to come at CinemaCon, next month’s annual NATO convention in Las Vegas.