Digital Decimation and How I Learned to Love the Movie Theater Again

I found a way to enjoy the movie theater again. It’s not at the standard cattle call multiplex theater but at the small luxury cinema: the gourmet food, alcohol, large reclining leather chairs, and all that space. The major reason I enjoy the luxury cinema is the absence of the riff-raff. The higher expense, tickets and food, repels the texting teenager, the non-stop talker in their snuggie, and people with feed bags full of popcorn strapped to their faces.

The fact that the standard theater experience is populated with people who treat the theater as their living room is why I usually avoid the movie theater and I’m not the only one.

Going to the movie theatre is a heinous experience. Forget the lack of focus and the sticky floors, what I hate most about the theatres is the other patrons. Who talk and text and think they’re in their living rooms. Hell, that’s why I want to stay home. If you’re a teen and you want to neck, if you want to get out of your parents’ purview, I get it. Or if you’re a couple with young children. But most of us have first rate exhibition systems in our homes. We’d rather see the movies at home. -From “Netflix” by Bob Lefsetz of The Lefsetz Letters

Home entertainment systems have become much better and way more affordable. The desire to see movies at the theater because of the large screen and surround sound is becoming less of a reason as the technology gets cheaper. Even the gimmicky 3D movies are finding a way into the living room with the explosion of 3D capable TVs. Yes, you can wear those annoying glasses at home too!

The movie theater has to offer something better than your living room. The standard multiplex theater does not. Consumers are staying home because technology is allowing them to watch movies whenever and wherever they please.

Digital Decimation

What decimated the music business is now affecting the movie business, file size. Consumers can now stream movies, buy and store them in digital lockers, or outright steal them and it’s only going to get easier.

Studios are starting to recognize that the old model isn’t the future of movie consumption. Technology is changing the game. Studios are already shortening release windows, experimenting with releasing movies on multiple channels at the same time, and playing with different pricing for downloading or streaming new releases. A 2009 article “Reel Time: The Incredible Shrinking Window for Movie Releases” from Knowledge@Wharton discusses the expanding options for studios. Movie theater operators do not want shorter release windows or multiple channels for movie releases or premium pricing for streaming new releases. Movie theater operators rely heavily on their exclusivity to new movie releases, the old model.

For now, the goal of maximizing revenues by shortening release windows is a moving target for movie studios, especially in a digital age when audience members are more tempted to skip out on high-priced seats and popcorn to see movies wherever and whenever they please in whatever format is most convenient for them. “Models are likely to be tweaked and the release schedule is going to be fluid,” says Kendall Whitehouse, director of new media at Wharton.

Groups like the National Association of Theater Owners (NATO), which represents movie theaters, have argued for maintaining the standard movie release timings. NATO’s campaign includes movie industry luminaries arguing that taking away the release window would remove the “magic” from the industry. [emphasis added]
- Reel Time: The Incredible Shrinking Window for Movie Releases

If there is anything to be learned for the digital decimation of the music industry is that a lot of companies stuck in the old model will lose. Those that will suffer less will be the consolidators and the niche players.