Movie Theater Owners Brush Off Idea Of $50 Opening-Day Home Video Releases

Image courtesy of (Eric BEAUME)

Last week, we told you about Screening Room, the streaming video startup from Napster co-founder and guy-who-was-played-by-Justin-Timberlake-in-that-Facebook-movie Sean Parker that hopes to sell home video access to new movies the same they hit theaters. Even though the Screening Room model reportedly includes plans to share the wealth with theater owners, an industry lobbying group is shrugging off the idea.

In a statement [PDF] released this morning, the National Association of Theatre Owners (aka “The other NATO”) acknowledge that some high-profile Hollywood directors — Steven Spielberg, Ron Howard, JJ Abrams, among them — have publicly spoken in favor of the Screening Room and stated how it could actually be a boon to theater owners.

According to early reports on the startup, for every $50 rental through Screening Room, about $20 would go into exhibitors’ pockets. Additionally, each rental would include a pair of free passes to see the movie in a theater, meaning the exhibitor can make money the old-fashioned way — by selling $55 gallons of Coke Zero.

But the NATO letter effectively tells these pro-Screening Room directors to stick to shouting “Action!” and leave the theater-running business to them.

“The owners and operators of movie theaters genuinely appreciate the vision and creativity brought to the big screen by motion picture directors,” says the trade group in a way that is not in the least bit condescending.

NATO goes on to make the argument that theatrical releases of movies are vital because “The exclusive theatrical release window makes new movies events. Success there establishes brand value and bolsters revenue in downstream markets.”

The trade organization concedes that there may someday be a need for “More sophisticated [release] window modeling,” but contends that “Those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.”

Hey Parker, do you need some aloe? Because you just got very mildly burned… in a backhanded way that probably didn’t sting at all.

Complicating the matter, reports Variety, is the fact that one of NATO’s biggest member — AMC Theaters, which is getting even larger with its pending acquisition of Carmike — is apparently leaning toward working with Screening Room, while the country’s other largest exhibitor, Regal, is not interested.

While the NATO statement is more of a “try again” brush-off of Screening Room, TorrentFreak reports that Art House Convergence — a smaller trade group representing some 600 theaters — recently posted an open letter voicing more concrete concerns about the streaming service and piracy.

“We strongly believe if the studios, distributors, and major chains adopt this model, we will see a wildfire spread of pirated content, and consequently, a decline in overall film profitability through the cannibalization of theatrical revenue,” explains the letter.

AHC goes on to note that when theatrical distribution switched to digital projection, theaters went to great expense — or faced significant penalties — to comply with new anti-piracy standards.

“How will Screening Room prevent piracy?” asks the letter. “If studios are concerned enough with projectionists and patrons videotaping a film in theaters that they provide security with night-vision goggles for premieres and opening weekends, how do they reason that an at-home viewer won’t set up a $40 HD camera and capture a near-pristine version of the film for immediate upload to torrent sites?”

The group argues that the apparent ease of making such a duplicate would negate all the investments that exhibitors have made to comply with studios’ piracy concerns.