CinemaCon: Sean Parker’s Screening Room a ‘serious distraction,’ says theater group leader

Reporting from Las Vegas —  Napster co-founder Sean Parker’s idea to bring theatrical movies to the home earlier than usual has been the talk of the cinema industry in recent weeks. But John Fithian, chief executive of the National Assn. of Theatre Owners, is calling the yet-to-be-launched service a “big distraction.”

The leader of the cinema trade group mounted a vigorous defense of the traditional way of doing business during remarks Tuesday at the CinemaCon film industry conference in Las Vegas. Theatrical movies typically don’t hit the home video market until 90 days after their cinematic debut.

Addressing movie industry professionals at Caesars Palace, Fithian said the traditional so-called window between theatrical release and in-home availability benefits the industry because it leads to greater revenue from DVD and on-demand.

“Exclusive theatrical windows make new movies into events,” he said. “Success there establishes brand value and bolsters revenue in downstream markets.”

Fithian was responding to Parker’s proposed home-video service, called Screening Room, which would give users access to films the day that they’re released in theaters, for $50 each. That has upset theater owners who say such a concept would cannibalize ticket sales if implemented.

Fithian, in a news conference, expressed frustration with how Parker’s concept has dominated the conversation at the convention despite another record year at the global box office.

“The issue of the Screening Room is a serious distraction from this week,” he told reporters. “It’s up to the exhibitors and the distributors to decide the future of windows.”

The shortening release gap for films has long been a topic of debate within industry circles as theater owners and studios grapple with changing consumer habits. Paramount recently tried to narrow the window for two
of its low-budget horror films, but that effort met with little success. Universal Pictures in 2011 had to abandon plans to release “Tower Heist” early via video-on-demand after cinema firms cried foul.

Though some prominent filmmakers have endorsed Screening Room, at least one prominent studio executive in Las Vegas sided with cinema owners.

“I assure you, we are not going to let a third party or middleman come between us,” Warner Bros. Entertainment Chief Executive Kevin Tsujihara said during a presentation.

Fithian acknowledged that consumer demand and technological innovations may force theater owners to open up to more flexible ways of delivering movies earlier than usual through online stores.

“More sophisticated window modeling may be needed for the growing success of a modern movie industry,” he said. But, he argued, those models should be decided on by exhibitors and distributors in discussions between individual companies.

Christopher Dodd, head of the Motion Picture Assn. of America, also touted the value of preserving the theatrical business model, without singling out Screening Room.

“Despite the noisy suggestions otherwise, the cinema provides a unique and powerful experience that just cannot be re-created,” Dodd said in a speech on the state of the movie business.

Dodd later told reporters, however, that the MPAA would meet with the team behind Screening Room. “I want to hear what they have to say,” Dodd said.

The dust-up comes after the movie business enjoyed a record $38.3 billion in global ticket sales last year, driven by blockbuster movies and the growing international box office.

The worldwide film market increased 5% in 2015 thanks to billion-dollar-grossing films including “Jurassic World,” “Star Wars: The Force Awakens” and “Avengers: Age of Ultron,” according to a Tuesday report from the MPAA.

Theatrical attendance also increased. The number of tickets sold in the U.S. and Canada grew 1.32 billion last year, up 4% from 2014.

Dodd said the numbers are a sign of continuing strength for the cinema business, which is generating much of its revenue from overseas. In the U.S. and Canada, ticket sales reached $11.1 billion, up 7.5% from 2015. Internationally, the box office grew more than 4%, to 27.2 billion. Much of the growth has come from China, where ticket sales jumped 50% over the prior year, as well as marked increases in countries including Britain and Argentina.

“The state of our industry is not only strong — it has never, ever been stronger,” Dodd said. “The numbers clearly show that the international marketplace, which accounts for nearly three-quarters of global
box office today, is only continuing to grow in importance.”

Movies have done robust business in 2016 as well. In the first three months of the year, ticket sales rose nearly 13% from the same period in 2015 because of successes including “Deadpool,” “Zootopia” and “Batman v Superman: Dawn of Justice.”

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