Meet the Movie Theater of the Future

Forget waiting in line—studios are exploring new systems to deliver films whenever you want, on whatever device you choose.

Last Updated: November 13, 2009 @ 10:20 AM

Let’s say you were dying to see New Moon but you didn’t want to spring for a babysitter, tickets, and overpriced popcorn. What would you have paid to watch it at home on the same day it opened in theaters? Or say you’re crazy about Harry Potter. What would it be worth to watch the next installment even before it’s in theaters?

These are the questions being asked by Hollywood executives every day now—and they are not hypothetical. Because the studios are poised to make revolutionary changes in the way we watch movies.
The signs are everywhere. If you couldn’t wait to buy your own copy of G.I. Joe: The Rise of the Cobra, then surely you were thrilled to find it on Wal-Mart shelves earlier this month—about four weeks sooner than a studio would normally release a DVD.
But even if you wouldn’t watch G.I. Joe for free on a cross-country flight, Paramount’s decision to speed up its release date was a dramatic move—perceived by theater owners as an act of naked aggression, since they expect the studios to protect their interests by waiting the usual four months before releasing movies on DVD. Thus G.I. Joe became a foot soldier in an escalating battle over the future of the business.
Literally every day seems to bring another announcement about studios hastening the release of major films, on DVD and on-demand. Last week, the studios filed a petition asking the federal government for permission to disable certain outputs on your television so that they will be enabled to stream movies to you on-demand with less risk of piracy.
And when will they make those on-demand movies available? Sony just announced that for $24.95, it will stream its animated hit, Cloudy With a Chance of Meatballs, to customers with Internet-enabled televisions and certain Blu-ray players on December 8—less than three months after it was released in theaters and well before it makes the movie available on DVD.
The studios are scrambling for a new approach because DVD sales—for years now, the life blood of the business—have started to dry up. (Retailers are slashing prices; Wal-Mart, for example, will offer this summer’s big movies, including Star Trek and the latest Harry Potter, for less than $10 this holiday season.) After all, why buy DVDs when they can be rented cheaply through Netflix and Redbox?
So the studios are looking to replace that critical lost income through on-demand viewing and other new approaches. What’s not clear is whether these new strategies will generate enough money to support their business.
You might say the studios are gathered on the edge of the new-technology pool, trying to figure out how to dive in without breaking their necks.