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The Netflix Threat

The Netflix Threat

Arthouse Convergence responds to the Netflix speech given today by Ted Sarandos. Thank you Jessica Rosner for giving this to us. Jessica says”

“I posted this the last time this issue [of new media for movies] came up, but I can’t resist posting it again as we can all probably use a
laugh. Dennis [Doros] is right, theaters, distributors and movie makers have been fighting ‘competition’ from other ways of viewing since
the beginning. Here is a wonderful clip from the height of studio’s fears about the competition from TV and what they were doing to make
the theatrical experience special.

P.S. In order to REALLY experience this, you should consider contacting WB to book Silk Stockings an uneven but
still wonderful musical which not only includes the above but Peter Lorre dancing and singing and other great bits. You can double bill it with Ninotchka.”

Arthouse Convergence Director, Russ Collins < rcollins [AT]> wrote:

Why Theatrical?

1) Aesthetic mandate — for the film to have its full impact or be fully appreciated it must be perfectly presented on a BIG screen in a
beautiful darkened room full of strangers full of artistic anticipation and cultural curiosity – the ART demands it. It is also why we go hear live music
concerts, live stage and dance performances at theaters and actual paintings, sculptures and other visual art works in museums and galleries and have real
art, not reproductions, hanging in our own homes. Art authenticity is a virtue!

2) Marketing godsend — reasonable success in theatrical exhibition is the most reliable (but not
absolutely necessary) way for a movie to achieve success in all other release platforms. Increasing your odds of maximizing profits is a good thing!

3) Fulfilling the primordial Campfire Desire — fulfilling the human urge to experience a story in
community, in the dark; stories masterfully told by flickering light. Carl Jung and Joseph Campbell would have loved this reason!


Ted Sarandos of Netflix suggested theater owners are strangling innovation. Please know he may be is talking about large corporate theater owners, he is
certainly not talking about the Indie theater owners. Frequently pundits like Sarandos promote a general assumption that theatrical exhibition is somehow
out-of-step and needs to be reinvented. Although this has been a constant drum beat in the film business for decades, I don’t think it is true or that it
is particularly supported by data. If theatrical exhibition needs to be reinvented it is very old news which was actually needed way back in the 1950s when
television took the theatrical exhibition market from 4 billion admissions annually to 1 billion admission annually. In response to this 75% decline in
business, theatrical exhibition was indeed reinvented in the 1960s and 1970s. What happened was the demise of single screen theaters and the rise of
multiplex cinema. However, in regards to independent exhibition, it has been rather consistent
since the beginning of theatrical exhibition in the 19-teens. There has always been and continues to be independent exhibitors who operate along-side the
corporate commercial exhibitors – some are successful and many struggle – another consisted fact of independent exhibition.
So please know that I believe the basic dynamics of theatrical exhibition is not in want of reinvention, but rather has been a variation on the same four
themes since the 1970s. Those four themes are: 1) Multiple screen theaters carry the bulk of the business; 2) Dynamic new video/digital/online technologies
are expected by pundits to soon kill or radically change theatrical exhibition (but they never do – in fact since the mid-1960s, new movie watching
technologies have not significantly altered theatrical attendance); 3) Independent theaters struggle against the monopolistic business practices of
corporate exhibition and distribution; 4) Two lies are so frequently repeated about theatrical exhibition business that they are assumed to be true: ONE –
Theatrical exhibition will soon be killed by new technological advances and more personal ways to see films; TWO – All the profit in theatrical exhibition
come from the sale of concessions.
However, I also believe that responding to change is essential for any business to remain viable. Every business needs to remain fresh and innovative in
its approach to business, because change is the only constant in the universe. So, people who run theatrical exhibition businesses must be creative and
open to change and opportunity as they run their businesses. Change being constant means every business is in a constant state or being reimaged and/or
reinvented, however, I don’t think that was the intended theme of this panel. I expect it was the tired old notion that new technologies will significantly
impair or change the core nature of theatrical exhibition.
Theatrical exhibition is still a great way for a film to establish a market. Stories told in the space of about two hours are still relevant. Independent
theatrical exhibition is built on “curators” (gate keepers) and the “wisdom of crowds” seated in a darken room full of strangers. This is a proven and
highly effective way to discover the brightest, most relevant and/or best of contemporary cinema. It is not the only way for a film or film artists to find
a market, however, it still a good and effective way – and maybe, just maybe, THE most effective way for movies to find a lasting place in markets and in
human history. Time will tell, but that is why theatrical exhibition survived the killing onslaught of television in the 1940s and 1950s and why no other
home/private viewing technology or distribution dynamic has significantly effected theatrical exhibition. Television (programs specially made for viewing
at home and/or on an electronic device not at a theater) is a different but related market and market dynamic. Today, it is the home television –
network/cable/streaming/etc. – where there real reinvention is happening in terms of media arts markets and storytelling. Will Netflix rule? Will
television networks survive? Will cable television be relevant twenty years from now? Who knows?? However, what I know for sure is that twenty years from
now – one hundred years from now – there will be passionate and struggling independent theatrical exhibitors out there in cities large and small showing
movies by classic, great and up and coming filmmakers to cinephiles in their community in uncountable places throughout the world.

From Russ Collins
CEO, MichiganTheater – AnnArbor
Director, Art House Convergence
Founder, Cinetopia Festival

Theater Owners ‘Might Kill Movies’, Warns Netflix’s Sarandos…

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