CINEMA-CON, LAS VEGAS:
Film studios seem determined to kill the movie business completely. After putting video stores out of business by authorizing Redbox to rent videos for $1 per day from what amounts to a Coke machine, now they want to put movie theaters in a coma by authorizing a new at-home video-on-demand release during what has until now been the exclusive first-run theater window.
This comes after demanding for the last 10 years that theaters spend $ billions on digital sound, stadium seating, digital projection, 3D projection and new locations.
Now James Cameron wants a completely new system put in place with enhanced frame rates for further $ billions.
In a stunning suspension of disbelief, many studio executives argue that an enhanced early at-home alternative will encourage MORE people to go to the movie theater -- do people this naive really exist? It sounds exactly like the last ten years of internet gurus and solons calmly insisting that free (stolen) music would encourage higher CD sales. See how well that worked out. Fool me once ... call me a record executive; fool me twice ... what do they think, we're politicians?
I ask: "Are you a movie without a movie theater?"
If you answer “yes” a movie is a movie even if released just on television, then go ahead. In fact, if that’s true why aren’t you doing it now? The TV networks have no exhibitor relationships to destroy, why aren’t they spending $300 million to produce Avatar, or $150 million to produce “the Hobbit” or even $60 million to produce “The Hangover?” I know why because I’ve asked TV network heads in the past. They say it’s ludicrous to assume they could spend like a movie studio for TV product.
The TV movie model does not support the economics of a major feature film. It is the theatrical release that makes a movie a movie and builds the momentum and interest that enables it to gross over a billion dollars. For a major worldwide hit, it is also the largest contributor to the profits of a movie. Don’t be fooled by “retail” numbers. Home video was a very big retail number but the share to the studios was around 35 vs. 60 percent for a major hit in the movie theater.
Further, a major theatrical hit has an unlimited upside while a major video hit is intrinsically limited. Video and television are great for catalog, but they do not fund a front line release schedule -- for that you need the movie theater with its higher per capita income and greater share to the studio.
As for the impact on theatrical attendance, I believe it will be devastating. However, among studio execs the best case quoted to me was a 10 percent drop in attendance with the executives insisting that, "Some theaters will close, others will raise prices ... it's all good."
