Using this proposed new in-home movie service, consumers would pay a nice $50 to see a brand-new theatrical movie at home, available the same day of its release in theaters. They get a weekend’s worth of time — a 48-hours window — to watch that future “Hunger Games” must-have film.
And by the way, they also need to buy another clunky home set-top device, costing $150. All this is brought to you by none other than the Napster King himself: the original music and entertainment disrupter Sean Parker, co-founder of the music service.
How can this be a successful enterprise? By luring studios in to make even more money than the $11 billion or so in U.S. box office revenues big studios pulled in 2015.
What about the movie theater owners? They also get a cut. AMC Entertainment, now the largest movie theater chain in the U.S., has come on board, reportedly. It’s also been endorsed by some big-time movie producers and directors.
But other theater owners -- as well as the industry group National Association of Theater Owners, and some other well-known movie directors -- think The Screening Room is bad news and would just accelerate movie revenue erosion.
Perhaps Parker and company are targeting just the niche marketplace of certain entertainment consumers eager to be the first in line for new content. Still, you can see why theater owners might be nervous.
For movie studios, there is strong temptation to grow another window of theatrical revenues. But it's never a sure thing. The rise of digital movie sales -- and other platforms like Netflix, and VOD -- contributed to erosion in other areas. Look at what's happening to the declining DVD business (rental and sell-through).
Keep in mind that the music site Napster didn’t survive -- even with some 50 million regular users. But Sean Parker’s invention did have ripple effects in changing much of the music business.
Among other things, it pushed artists to work with newer music digital platforms like Spotify and Pandora that wanted just single pieces of music. Album sales suffered; many artists also said they have suffered.
Perhaps some well-known movie directors, producers and writers might want to keep some of this in mind when considering seismic business alterations.