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» Film-Tech Forum   » Community   » Film-Yak   » Movie theaters are 'strangling the movie business (Page 1)

 
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Author Topic: Movie theaters are 'strangling the movie business
Frank Cox
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 - posted 10-07-2016 04:55 PM      Profile for Frank Cox   Author's Homepage   Email Frank Cox   Send New Private Message       Edit/Delete Post 
Netflix CEO: Movie theaters are 'strangling the movie business'
quote:
Netflix CEO Reed Hastings thinks the state of film is a "real tragedy" and that movie theaters are "strangling the movie business," he said at The New Yorker's TechFest on Friday.

Netflix has long faced off against the giants of the movie theater business, who have largely refused to show Netflix's original films in theaters because of Netflix's commitment to making them available to stream on the same day they appear on the big screen.

That could be changing — but only a little bit.

Netflix recently came to a deal with iPic Entertainment, a luxury theater company, to screen 10 of its films as they become available online. Ted Sarandos, Netflix's head of content, characterized this as a “substantial” portion of Netflix’s original movies for the year, according to The Wall Street Journal. That's good news for Netflix, but the company's relationship with the powers that be in the movie industry has been generally ice cold.

On Friday, Hastings came down hard on these theater owners, saying there had been no innovation in the movie theater business in recent years, even as TV has been shaped by the rise of cable and internet networks. "Money" and "innovation" has flooded to the TV industry, Hastings said. Not so with film.

The movie theater business has seen flatline revenue, Hastings said. Part of the problem is that small movies, such as many Netflix has snagged from places like Sundance, would be better distributed both at home and in theaters.

That's a convenient position for Netflix to take, but Hastings said the movie studios feel the same way. Each movie studio would like to "break the oligopoly" of the theaters, but "they don't know how," he continued. If they collude to face the theaters, it's anti-trust, but if they are the ones to take the first step, their films will get killed. That means they just go along with the status quo.

"It's a bad dynamic," Hastings said.


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Monte L Fullmer
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 - posted 10-07-2016 05:32 PM      Profile for Monte L Fullmer   Email Monte L Fullmer   Send New Private Message       Edit/Delete Post 
Funny for a comment like this from a company that is closing down their stores left and right...Hastings.

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Scott Norwood
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 - posted 10-07-2016 06:25 PM      Profile for Scott Norwood   Author's Homepage   Email Scott Norwood   Send New Private Message       Edit/Delete Post 
I don't get it. He either sees value in the way that theatrical exhibition legitimizes a movie, or he doesn't. If the former, then why is he surprised that theatre owners see value in having exclusivity on that title for the first X days/weeks/months/years of its release? No one is forcing him to release Netflix titles to cinemas. And no theatre owner will play a title that doesn't at least have a chance of making a profit.

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Justin Hamaker
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 - posted 10-07-2016 07:57 PM      Profile for Justin Hamaker   Author's Homepage   Email Justin Hamaker   Send New Private Message       Edit/Delete Post 
It's as if everyone outside of the exhibition industry thinks demand for content will disappear after the theatrical release. The reality is quality product will continue to be demanded long after the relatively short window where it's showing in theatres. But this day and date crap just marginalizes movie theatres, especially when the content is available for no additional charge. Why in the world would I pay $10 to watch something in a movie theatre when I can see it at home at my leisure for nothing.

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Randy Stankey
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 - posted 10-07-2016 10:41 PM      Profile for Randy Stankey   Email Randy Stankey   Send New Private Message       Edit/Delete Post 
Just random thinking...

Why couldn't Netflix release the first episode of a new series exclusively to theaters, say a month in advance but, then, release subsequent episodes with a shorter window?

That would hopefully drive interest for new shows but still give theaters their gravy, so to speak.

More pivotal episodes, such as season finales/openers could be released with a longer window and run of the mill episodes can have a shorter window.

That way, everybody gets something they want.

Just thinking...

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Bobby Henderson
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 - posted 10-08-2016 12:56 AM      Profile for Bobby Henderson   Email Bobby Henderson   Send New Private Message       Edit/Delete Post 
This is just more stupid bluster coming from someone trying to boost the stock price of his company. Surely Reed Hastings can't be stupid enough to miss the dynamics of how the theatrical release platform makes movies into real movies.

If the movie doesn't play in a movie theater it just isn't a real movie. If it gets released on TV it's just a made for TV movie. That's just how it goes. It doesn't matter if the movie gets played first on a cable TV network like Lifetime or even HBO. It's made for TV. And made for TV movies simply do not get the kinds of production budgets and marketing budgets bestowed upon real movies that get released in movie theaters.

If the movie just gets released "straight to DVD," that basically means it wasn't good enough to appear in movie theaters or on a damned cable network. I suppose you could add streaming services too since Netflix and Amazon are supporting a few made for TV movie releases. In the end none of those projects had the appeal necessary to make it onto the big screen in a real movie theater.

The average consumer is a selfish son of a bitch with his money. If there is a cheaper option available he absolutely will gravitate to it, "no sales tax!? Hell yeah I'll order that online! Screw buying local and supporting the local economy! The very same thing applies with movie theaters. If the movie is available on Netflix, Blu-ray or cable at the same time it is playing in theaters next to nobody will pay extra to see the movie in a commercial theater.

Reed Hastings fails to understand this fact: if there are no movie theaters there will be no movie industry. It will just be TV. That's all. And if it's just that then who gives two shits about it?

Not only would the movie industry be pretty much imploded, but a big part of the consumer electronics industry would suffer badly. Movies are a big part of what sells huge TV sets and surround sound systems. Movies affect popular culture in a big way. Without the movie industry other industries such as the music industry and fashion industry would suffer.

This disaster I'm imagining might not be a worldwide phenomenon however. Basically Americans would torpedo their own movie industry and all the other businesses tied to it in some degree. Other countries, such as China, might be able to take over control of that business.

quote: Monte L Fullmer
Funny for a comment like this from a company that is closing down their stores left and right...Hastings
It's just a coincidence Reed Hastings' last name is the same as the music-books-video-games retail store chain that is currently under liquidation. I'm sure all the Hastings employees losing their jobs and the towns losing the sales tax revenue from those stores don't see much humor in the situation.

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Mike Blakesley
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 - posted 10-08-2016 10:51 AM      Profile for Mike Blakesley   Author's Homepage   Email Mike Blakesley   Send New Private Message       Edit/Delete Post 
I don't understand why the movie studios can't just take five minutes and google "What happened to the music industry?" and read one of the million article that will pop up... then ask themselves if they want to reduce their own industry to a shadow of its former self. Because that's what will happen as soon as they go day and date.

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Marcel Birgelen
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I guess most of the movie industry did their homework and that's the reason why it didn't happen already.

When it comes to Amazon and Netflix, they're both the New Kids on the Block. But why don't you think Netflix doesn't pour $100M in a single feature? Because they know they will never make up for it with their current business model.

For the exhibition industry and the movie industry at large, it remains important to remember the fact that a big part of the value of content is determined by the way it's being presented. On the other hand, the exhibition industry should notice that there is real need to keep their standards high, since the quality of presentations at home are steadily increasing with each new iteration.

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Mike Blakesley
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NATO Chief Sounds Alarm Over Netflix Deal With iPic

Senior Film and Media Reporter
Brent Lang

The National Association of Theatre Owners (NATO) is sounding the alarm over a recent deal between Netflix and iPic, in which the luxury-theater chain will screen 10 movies simultaneously with their release on the streaming service.

The lobbying organization represents the country’s theater chains and has been a staunch defender of traditional release windows that keep films exclusively on screens for roughly 90 days before they debut on home entertainment platforms. In a statement, NATO chief John Fithian warned that while iPic was free to make its own decisions, “We all should tread lightly and be mindful that over the years, the film industry’s success is a direct result of a highly successful collaboration between film makers, distributors and exhibitors.”

Netflix has a different model than most major studios. It is primarily interested in releasing its films online and is willing to forgo a theatrical release. The pact with iPic gives the company a theatrical foothold on 15 U.S. locations. That will be particularly important for Netflix films that need some kind of theatrical run to qualify for awards. IPic will release the war thriller “The Siege of Jadotville,” starring Jamie Dornan (“Fifty Shades of Grey”), on Oct. 7. That will be followed by Christopher Guest’s mockumentary “Mascots” on Oct. 13. This summer, iPic first tested showings of Netflix’s “The Little Prince.”

Fithian goes on to note that theatrical distributors such as Roadside Attractions have flirted with day-and-date releases on films such as “Arbitrage” and “Margin Call,” only to move away from the model when they determined that there was more value to releasing a film exclusively in theaters.

“Simultaneous release, in practice, has reduced both theatrical and home revenues when it has been tried,” Fithian said in a statement. “Just as Netflix and its customers put a value on exclusivity, theater owners and their customers do too.”

Fithian and NATO have been on the defensive over windowing in recent weeks. Last month, he reproached Fox CEO James Murdoch for suggesting that theater owners were being inflexible about the length of time between a theatrical debut and its home entertainment premiere. He noted that exhibitors and studios, including Fox, have worked together on altering release patterns. The organization and its members have also had to contend with Screening Room, a startup backed by Facebook guru Sean Parker and entrepreneur Prem Akkaraju, that wants to release major studio films in the home on the same day they open across the country.

Variety article

(Mike again)
The whole, "Theatre industry is stuck in the past" crap is wearing thin, too. Uh, let's see...digital projection, digital satellite distribution (which saves the studios a ton of money), 7.1 and Atmos type sound, ever-cushier seats, ever bigger screens, online ticket purchasing, in-theater dining, 3-D, D-Box, descriptive audio and subtitles, sensory-friendly showings, etc etc etc, most of which has happened in the last 10 years or so. What the hell else are we as an industry supposed to do? Outside of give up the biggest thing WE PAY BIG DOLLARS FOR, which is exclusive access to product for 90 whole days.

The line in the article that I bolded is the relevant line. Netflix is so transparently self-serving. They just want the theaters to promote their stupid movies so they'll have more of a high profile. They have obviously now realized that they make more money on movies from other studios that have a built-in audience by the time they debut on Netflix. They've realized that, without the theatrical run, their movie has no chance of developing that audience. So now they've managed to talk iPic into giving them the theatrical run, but it's not going to work because it's no different than the theater showing a football game or "Game of Thrones" on the big screen.

The other thing that irritates me about articles like this is, the headlines always paint theater owners as whining little brats. "Theater owners upset about..." or "Theater owners complaining about..." or whatever. Why don't they make it, "Netflix CEO threatening to destroy movie industry"? It also drives me crazy that NATO doesn't use stronger language against this kind of crap, but on the other hand whenever THAT happens, then the news paints NATO as the whiners.

Looking at the comments on the online versions of some of these articles is the most telling. There are a lot of supporters of theaters, but also a lot of theater naysayers, many of whom have incredibly wrong information. One guy posted that "Most of the theaters are bankrupt anyway, so why is there a long wait for the BluRay?"

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Marcel Birgelen
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quote: Mike Blakesley
They've realized that, without the theatrical run, their movie has no chance of developing that audience. So now they've managed to talk iPic into giving them the theatrical run, but it's not going to work because it's no different than the theater showing a football game or "Game of Thrones" on the big screen.
Their main competitor, Amazon, which isn't actually all that cash-strapped, realized this already. That's why they decided to give their own high profile "Amazon Studios" content a theatrical exclusive release...

quote: Mike Blakesley
Looking at the comments on the online versions of some of these articles is the most telling. There are a lot of supporters of theaters, but also a lot of theater naysayers, many of whom have incredibly wrong information. One guy posted that "Most of the theaters are bankrupt anyway, so why is there a long wait for the BluRay?"
Most of those naysayers don't have a clue how the system works and how those big budget Hollywood productions are actually paid for, neither would they care anyway.

The biggest trap the move industry could fall into, is trying to cater to the will of those people. It's exactly those kind of people who want it now, don't mind what quality it is delivered in as long as it's cheap or even free. The market is huge in absolute numbers, but there's almost no value in that market and the only content that's worthy for that market is either the stuff that's (almost) free to produce or content that has been milked dry to the bone already.

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Leo Enticknap
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quote: Mike Blakesley
I don't understand why the movie studios can't just take five minutes and google "What happened to the music industry?" and read one of the million article that will pop up... then ask themselves if they want to reduce their own industry to a shadow of its former self.
Ironically, the music industry has been forced to turn to the live theatrical event as a way of making money, after consumer resistance to the way it's trying to sell recorded music (streaming/micropayment/subscription model rather than one-time purchase of offline media with an in perpetuity license for personal listening) resulted in slumping sales.

The extreme example is U2, which literally gave the recorded version of its last album away (not only that, but forced it on people who didn't want it, through the deal with Apple to push it to iGadgets), but charges several hundred bucks a ticket if you want to go see Bono deliver a political rant and then shatter several limbs while attempting his latest circus act.

About the only sector of recorded music that appears to be experiencing real sales growth right now is deluxe edition vinyl LPs, mainly of rereleases of iconic albums from the '60s through the '80s, marketed at the wealthy middle aged, and appealing either to geekery or nostalgia.

So yes, the lesson for the movie industry to learn from that is that if you try to downgrade or eliminate the theatrical element of the distribution cycle, the consumer will smell a rat.

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Justin Hamaker
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 - posted 10-09-2016 05:34 AM      Profile for Justin Hamaker   Author's Homepage   Email Justin Hamaker   Send New Private Message       Edit/Delete Post 
One of the things I think drives the perceptions of the general public is they perceive movie theatres are "ripping them off" because we charge $10 per ticket (give or take depending on the market). They don't seem to appreciate that they are paying for more than just the image on the screen - or what it costs just to put that image on the screen.

A couple weeks ago when I was at the bank I had someone at the next window say "you guys are a rip off". Then went on about how he has to "take out a second mortgage to see a movie". I countered with "You have no idea how expensive it is to operate the theatre - for example, our electric bill is about $8,000 per month". I didn't stick around to chat further, but I know the teller practically choked when I said that.

I just don't know what we can do to break through that wall to get people to understand the value of watching a movie on the big screen. Especially those people who are perfectly happy watching content on palm sized screens.

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Dennis Benjamin
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I saw this article and have several comments:

iPic is ran by Hamid Hashemi. I used to work for him. He is a great Real Estate guy, but he doesn't know how to run movie theatres. Just look what happened to Muvico Theaters.

Then there is this quote:

"there had been no innovation in the movie theater business in recent years"

Anyone on this forum knows that this is not true. Luxury seating, recliners seats, gourmet foods, expanded menus, digital projection etc. etc.

I have been doing this for 27 years. The entire time the media has been saying that it is a "dying business". Don't know where they get their info from. But it's a business that's thrived the entire time.

The only reason he wants to get the Netflix stuff in theatres is so they can be nominated for Oscars....period..

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Martin McCaffery
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To expand on what Dennis just said, Netflix only wants its films in theaters for an Oscar qualifying run. Once that has been done, Netflix model has been to pull the film from circulation so they can promote it as an Oscar contender available only on Netflix.

Why do I suspect Netflix and other cable content providers are lobbying the Academy to change the theatrical exhibition rule, at least for Docs?

Want to start a pool on when that rule change goes into effect?

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Jim Cassedy
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quote: Martin McCaffery
Netflix only wants its films in theaters for an Oscar qualifying run
I think you're right. Also, in the past two weeks, I've done a disturbing
number of NETFLIX "Academy Screenings". They're pushing several of
their titles really hard for Oscar consideration.

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