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Screening Room and the Long Shadow of Netflix

Over the last few weeks, an interesting news item that might significantly impact the future of home entertainment has been making its way into the mainstream media. A new home video service called Screening Room is being pitched in Hollywood. Here is the idea. For $150, customers would buy a set-top box, probably similar to a cable TV box, which would enable them to rent, for 48 hours, a movie on the day it is released in the movie theaters for $50 a movie, with a share of that $50 going back to movie theaters. But wait, the renter of the movie would also get two tickets to see the same movie at the theaters. This is either a crazy idea or the next big thing on the horizon for an industry already in great flux.

My initial reaction was that this is a crazy idea because the $50 cost is out of reach for the average moviegoer. What gives me pause, though, is that the idea belongs to Sean Parker, the co-founder of Napster and former president of Facebook. For moviegoers, he was the character played by Justin Timberlake in The Social Network. Screening Room is backed by a powerful cadre of a who’s who in Hollywood, including producer Brian Grazer and directors Steven Spielberg, Ron Howard, J.J. Abrams and Peter Jackson. Next week it is being demonstrated to industry professionals at the CinemaCon convention in Las Vegas. Stay tuned for further developments. This story could have legs.

For now, let’s consider, is the idea viable and why are powerful moviemakers getting behind it? Many home entertainment customers have bought a streaming device, Roku, Apple TV etc., for $50 – $100. The $150 for the set-top box probably isn’t unreasonable if there is sufficient demand for $50 movies. That’s the big question. Event movies, like Star Wars: The Force Awakens, that are candidates for viewing parties, would be a reasonable target for the service. It would be an extension of the demand that exists today for pay per view boxing matches. Families, that often go to the movies as a family, are another potential market. Couples with young children might also be a target when you add to the movie theater costs the cost of hiring a babysitter. But, for Singles, and Couples with no children, the economic cost benefit doesn’t seem to make sense.

As for moviemakers, the motivations might be complex. There is the possibility that it could add to the box office. For example, young couples with kids who would rather stay home than pay for a sitter, might see more first run movies than they normally would go to the theater to see. The biggest motivation for the movie industry, though, may be the looming threat posed by Netflix and other streaming services.

When Netflix streamed Beasts of No Nation (Idris Elba was a Screen Actors Guild Award winner for the film.) for all of its subscribers on the same day it was released in movie theaters, it sent a shot across the bow of the movie industry, particularly theater owners. The four major theater chains in the US boycotted the film and it ended up getting only a limited release in 200-250 independent and art film theaters. Another Sundance favorite, The Fundamentals of Caring with Paul Rudd and Selena Gomez, was purchased by Netflix and will be streamed on June 24, 2016 on Netflix. It is dawning on the industry that moviegoers may not need to actually go to movie theaters to see first run movies. They can be delivered to them at home.

Screening Room may be seen by the movie theater industry as a financially viable alternative to Netflix, at least until Screening Room also eliminates their payoff to the middle man, making it more affordable to average movie watchers. After all, that’s how Netflix does it.

What do you think? Is it a viable concept?

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