The Screening Room: Is Hollywood On The Brink Of A Civil War?

There’s a war brewing.

You know it’s coming, simply because it’s all anyone can talk about. They tell you to pick a side, they throw all kinds of images and faces at you, they talk numbers and revel in the intrigue and suspense. It’s going to be huge, they tell you, and you look at the evidence and realize that, in one form or another, they’re right.

Yes, we’re about to be embroiled in a civll war.

I’m not talking about the one on screens in May starring Captain America and most of the Marvel Cinematic Universe, I’m talking about the one involving Sean Parker’s Screening Room, which might just make the superhero film look like an eight millimeter home movie.

On the one side, in favor of the service, you have big name directors like Steven Spielberg, Martin Scorsese, J.J. Abrams and Peter Jackson. Against it are the theater chains, both multiplex and art house, as well as James Cameron, Christopher Nolan and Brett Ratner. Both sides are formidable and girding themselves for a long battle, but that isn’t needed, because there’s a middle ground here. There almost always is.

First things first: let’s talk about what appear to be the two major concerns. The first is piracy, which is kind of absurd, because there’s nothing about this that will change anything about that. Piracy is here, it’s not going anywhere, and it will continue, regardless of the safeguards the industry puts on it. I mean, you have to figure that Parker and his partner, Prem Akkaraju, have factored that in and will put some kind of digital watermark or something on every download to keep track of whence pirated instances of a film came. One would think, in any event, that this has been considered by Parker, of all people, simply based on his history with Napster.

The bigger issue, it seems, is how it will affect the theater industry. To hear the theater owners talk about it, this is Armageddon and the End Times all rolled into one. This will, absolutely and with all certainty, be the death knell of the theatergoing experience, once and for all. No ifs, ands or buts about it, the ultimate cataclysm has arrived.

Except, of course, it hasn’t.

Industry pundits talk about flattening attendance numbers, but it’s worth mentioning that ticket sales in 2015 were up 4.1 percent over the year before. That increase is not insubstantial, nor are the doomsayers new on the scene. There have been a number of times over the 100 years or so of the film business that the the theater industry has been declared kaput, except it continues to stick around. There was the dawn of television, of course, and then home video, and now streaming. The first two didn’t do the trick and there’s no reason to believe the third one will, either.

Just take a look at the art house business, even as a collective of 600 theaters and their owners — known as the Art House Convergence (AHC) — have come out strongly against The Screening Room. These smaller theaters have been dealing with VOD day and date releases for years, and it hasn’t negatively affected their business in a meaningful way. The same, thus, could be assumed when this new system goes into effect and the larger, studio movies are included, simply because these movies don’t tend to end up on the smaller screens.

The concern from those theaters is more about what cut they might receive from the $50 download fee, 10 percent of which goes to The Screening Room, 40 percent to the releasing studio, and 40 going to the theater chains (it’s unclear, to me at least, where that last 10 percent goes). How is it going to be decided who gets that $20 earmarked for exhibitors? How will it be divvied? That’s the biggest question to be examined here — and is of special interest to the National Association of Theater Owners (NATO) — because the rest of it tends to take care of itself.

For instance, if you do the simple economics of the issue, it breaks down pretty simply. Going to a movie here in New York on opening weekend costs roughly $30 for two people. Add in your concessions, and that takes it over $50. If it’s a couple with kids, throw in the cost of a babysitter and maybe dinner, and you’re coming close to $200 all in. With that in mind, the $150 charge for the set-top box for streaming use pays for itself within a couple of downloads. I know a lot of married people, and they tend to average about four or five trips to the movies per year (a stat that’s very clear to me because they all ask me what they should see when they go). This is tailor-made for them.

I, meanwhile, go the movies between 75 and 100 times per year. Maybe more. The Screening Room isn’t built for me. It’s for people who wouldn’t go to the movies all that often, anyway, and probably won’t take much — if anything — from the theaters’ bottom line. It’s also for people who might not be able to afford to go to the movies that often, which I know sounds counterintuitive, but follow me on this: you get a group of 10 friends. They chip in $15 each (the cost of one movie) for the box, then five bucks each to stream the new release on opening weekend, which they can then all watch together in the comfort of a friend’s living room.

Again, that pays for itself pretty quickly.

There’s a lot more to this, obviously, and more than I can really cover in a thousand words. For instance, did you know that NATO members could have had control of the home video business when it first arose back in the late 1970s? True story, but I can talk more about that — as well as a few other choice issues involved here — next time.

Read Part II of ‘The Screening Room: Is Hollywood On The Brink Of A Civil War?’

Neil Turitz is a filmmaker and journalist who has spent close to two decades in the independent film world and writing about Hollywood. Aside from being a successful screenwriter and director, he was also the editor-in-chief of the entertainment news website and newsletter Film News Briefs for close to five years, before merging it with SSN Insider in the spring of 2013, where he continues to contribute as Senior Editor.