Cutting theatre chains into streaming is a bad idea

Exhibitors could get up to $20 of a $50 fee to watch movies at home on day of release, report says.

crouching tiger, theatre chains

Crouching Tiger, Hidden Dragon: Sword of Destiny.

Theatre Chains Streaming:

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Hollywood is on the verge of bringing movies into the home on the same day as their theatrical release, according to a report by Variety. The move is being spearheaded by Napster co-founder and former Facebook president Sean Parker through his company the Screening Room.

Parker is close to finalizing a deal with AMC, the largest U.S. theatre chain, while Universal, Fox and Sony are among the studios showing major interest, the report says.

The plan is to supply consumers with a $150 (U.S.) set-top box capable of streaming movies the same day they’re released theatrically. The proprietary boxes would apparently help protect against piracy, while consumers would pay in the neighbourhood of $50 per movie and have 48 hours to watch it.

It’s an intriguing idea for a number of reasons, assuming Variety’s report is accurate.

On the surface of it, there’s sure to be much debate over the movies’ price tag. Twitter users were quick to condemn it as too steep, as the entertainment magazine’s quick poll showed:

On the other hand, $50 probably looks like a deal to anyone who routinely treks their family out to the theatre. Factor in popcorn and drinks and a night at the movies can quickly turn into a small fortune.

The more interesting aspect of the price tag is how it would get carved up. Movie studios and distributors would naturally get a cut, as would Parker’s company, but then – puzzlingly – so would the theatre chains. Exhibitors are being offered up to $20 of the fee, according to the report.

The big payout is an obvious effort to get the chains on board with streaming, which is their natural enemy. Exhibitors in the U.S. and Canada, including AMC and Cineplex, have so far been opposed to showing any films that get released to streaming the same day of their theatrical release, since they see it as eating into their revenue.

Crouching Tiger, Hidden Dragon: Sword of Destiny and Idris Elba’s Beasts of No Nation are just two that received almost no theatrical play over the past year as a result, instead showing nearly exclusively on Netflix.

Cutting theatre chains into this so-called day-and-date scheme seems like a reasonable way to bring them on board, but the question of what exactly they bring to the table comes up. Consumers will inevitably wonder why a big chunk of their movie rental fee is going to companies that have nothing to do with it.

They’re likely to realize rather quickly that it’s just a simple bribe.

Netflix’s approach, where the company is commissioning films specifically for streaming – theatres be damned – seems to be the correct approach. Movie fans will still want to go to theatres for a variety of reasons, but slicing off a chunk of any streaming effort just to keep the chains happy is sure to be recognized as a rather consumer-unfriendly racket.

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1 Comment on Cutting theatre chains into streaming is a bad idea

  1. I think this could work with a small tweak. Instead of day and date for streaming move stream back seven days. Let the theaters have their big pop on opening weekend. That would mean all the people who want to be the first to see a movie would still go to the theater but the production companies could then still more quickly capture the type of audinece home streaming would appeal to that are less liekly to ever go to the theater.

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