Why Charging $50 for a Movie at Home Will Never Work

There’s been a bunch of hubub recently over The Screening Room, a new startup that aims to “fix” Hollywood’s long suffering movie business. Created by Sean Parker, and backed by some of the biggest names in Hollywood including Steven Spielberg, Peter Jackson, JJ Abrams and Martin Scorses, the company thinks it knows how to convince people to stop waiting for DVD and Netflix to watch major, blockbuster movies. Parker thinks you’ll pay to rent first release films the day they come out in theaters, and he thinks you’ll pay fifty dollars for the privilege. Oh, and this won’t be a streaming service a la Netflix or Amazon Prime. In order to access these films, you’d need to buy a $150 set top box to get access at all.

Sean, as you may remember, was the founder of Napster, which sort of makes him the father of internet piracy. He’s since turned back to the light side, as it were, with this product. I can see why Hollywood’s elite is embracing it, but it will never, ever work. Here’s why:

The Price

I mean, this is the big one. I know a lot of people who don’t go see movies in theaters anymore. The two things they complain about are the other people at the theater, and the price. Movie tickets are already $20-30 depending on what you see, and that’s including an experience of getting to see a film the way it was meant to be shown, on a giant screen with excellent sound projection. Those people are not going to shell out enough money for a video game or several nice dinners out just to see a movie a few months early. The market for this product doesn’t exist.

Parker describes this as a “niche, non-disruptive” product. In that, he’s right. I can see a couple of millionaires throwing down to get this thing for their private, in home theaters. But not all of us have that kind of money or space. Which brings me to:

UPDATE: Since I originally posted this article, a bunch of people have pointed out that I didn’t even think about one major group when I was putting this point together: parents. I have so many friends who would rather throw $50 at the screen than try and organize a baby sitter or drag their kids out to the latest Pixar flick. That’s my bad, and throws the financial viability of this whole product into a window I hadn’t thought of before. To the point where I’m wondering if they should just market this at parents entirely.

Theater Owners

Hollywood has always had a bit of a rocky relationship with the folks who actually show their movies. Every time something like this comes along, they fight back to protect their livelihood. They’ll see the screening room, no matter how few people adopt it, as affecting their bottom line. Parker has already offered to give exhibitors $20 of the $50 fee, plus customers two free tickets to a movie of their choice down the line every time they rent a film through the service. Of course, if this service gets widely adopted by the fictional “rich but unlikely to head to the movie theater” audience, then those people are unlikely to ever use those tickets. So that goes away.

Exhibitors still have a huge amount of power in Hollywood, and they’ve already decided they don’t like this plan. “There’s no way exhibitors would be willing to risk their windows on any regular basis, or on significant movies to get a piece of this,” said Bud Mayo, president of Carmike Cinemas’ alternative programming and distribution division. And he’s right. The bread and butter for an exhibitor doesn’t come from the tickets they sell. It comes from – well, the butter. Specifically the butter you buy at a movie theater. So they have zero motivation to get behind this, and if they decide to stop showing a studio’s films for getting behind it, the service will dry up faster than anything.

So we’ve got a service that Hollywood itself is likely to shut down, rather than risk their relationship with theater owners, and we’ve got a service that’s aimed at an audience that absolutely doesn’t exist.

Who in the heck thought this was a good idea? Apparently, all of our favorite directors. But The Screening Room doesn’t offer any alternative to combat either the wait-for-Netflix crowd or pirates. It’s a non-starter, and anyone who gets involved is fooling themselves.

Mike Fatum
Referred to as a God Among Men, the Greatest Man that Ever Lived, and That Dude Over There…No, The Dude with the Long Hair and the Goatee…Yes, That Guy, Mike has grown up being known and loved around his apartment. In addition to being a successful film director and editor, he loves video games, movies, comic books, board games, and his wife and cat. He’s been friends with Jarys for over a decade now, and they started hosting a radio show together on college that became the genesis for the Ace of Geeks Podcast. When he realized he had so many talented friends who could write, the Podcast became an entertainment website, and here we are.

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