MovieSwap, The Screening Room… Hollywood is getting with the times – but still thinking backwards
James R | On 13, Mar 2016
Sean Parker speaking at San Francisco’s Web 2.0 Summit in 2011 Photo: Kevin Krejci
You may soon be able to watch the latest blockbuster releases on the same day that they are released in cinemas, if Hollywood is won over by a new proposal from Napster co-founder Sean Parker.
Called “The Screening Room”, the company proposes a streaming service that would allow customers to watch movies at home when they hit cinemas. The catch? It would cost $50 (around £35) for every film. On top of that, the box would cost $150 to purchase in the first place.
“More than a half dozen industry insiders” told Variety last week that Parker and business partner Prem Akkaraju have been pitching the start-up to all the major studios to see if they will get on board. The pitch includes secure anti-piracy technology that would prevent movies from leaking online. Each $50 rental would be available for you to watch for 48 hours, with further views costing another $50 each.
Why the high cost? That’s because Parker and Akkaraju need to ensure that cinemas get their cut too: exhibitors would earn a hefty chunk of the fee (up to $20), while distributors would nab 20 per cent of the proceeds. Punters would also get two cinema tickets for every title they pay for, designed to ensure that cinemas could earn money for any concession sales from moviegoers’ visits. (The Screening Room would earn $5 commission for every online purchase.)
That focus on keeping the cinemas happy is nothing new for the industry, as exhibitors remain scared that the rise of VOD could eat into their ticket sales and profits – and studios remain scared that without exhibitors on their side, they would have no way to show their films. Indeed, many cinemas have boycotted Netflix titles in the past, such as Beasts of No Nation, because their distribution model breaks the traditional theatrical window allowed for normal releases. Even last year, when Paramount took the revolutionary step of releasing a Paranormal Activity sequel early on digital platforms, it was still only in agreement with cinemas (including AMC and Cineplex) that it would be happen 17 days after the number of screens showing the film dipped below 300 in the US.
So far, studios and cinemas have refused to comment on the reports about The Screening Room, but Variety says that Universal, Fox and Sony are already showing “serious interest” in the presentations, with an AMC deal thought to be close to being finalised. (Disney is reportedly uninterested in the plan.)
Other major figures have also backed the company, notes Variety, with Steven Spielberg, Peter Jackson, J.J. Abrams, Brian Grazer and Ron Howard reportedly behind the start-up, with all of them shareholders in the company.
The proposed high cost for the consumer, though, is exactly the kind of barrier that deters people from legally streaming content: growth in VOD revenue in recent years has been driven by subscription services, because their monthly payments have made on-demand viewing both accessible and affordable.
At the same time as Hollywood considers this start-up, others continue to pop up on the web for consumers. French company MovieSwap proposes, as its name suggests, an online equivalent of swapping DVDs: subscribers to the service can send in their physical DVDs and be able to stream them online, or can pay to receive DVDs that are then added to their digital collections – all based on the principle that this is like trading discs for others, making it technically legal.
“Just like you can legally lend, swap, or offer a DVD to a friend, MovieSwap works in the same way, but on a much larger scale thanks to its remote playback technology,” says the start-up on its Kickstarter page. So far, €52,400 has been pledged to the company, far exceeding its €35,000 goal – with 32 days of its campaign still to go.
Another site, VidAngel, would offer streaming access to new titles after consumers buy a DVD of the title for $20. They can then sell the DVD back to the firm and receive an $18 credit towards their next purchase – effectively meaning that each streaming title costs $2.
Together, all three mark unusual solutions to the age-old problem of shifting the traditional movie industry into the digital age. But they have something else in common: each of them have a foot in the past, whether it’s basing a business model on DVDs or revolving an online proposition around bricks-and-mortar theatres. Last year, 45 Years became the first UK day-and-date title to reach £1m at the theatrical box office, proving that digital and theatrical distribution can work hand in hand, without cannibalising each other’s success.
Sites such as MovieSwap, which rely upon loopholes to operate, in the hope that studios will not turn around and close them down, are not a sustainable future for the film industry. Hollywood, meanwhile, may be considering several steps forward, but until they embrace the accessible costs of online streaming for consumers, The Screening Room is a sign that movie execs are still thinking backwards.