Building from The Basement....UP

One of the most interesting lines of conversation that arose during Cinemacon was the lack of lower end budgeted products. Exhibitors have realized that Hollywood has shifted its production focus and that streaming has for the most part sucked up the titles that at one time would fill the screens with secondary and lower budget titles. Once in a while a brave participant in the conversation would speak up and make the tentative proclamation that maybe theater owners should make their own movies or become their own distributors. Usually a silence would fall within the conversation as participants drunk up this comment and then routinely would deflect this line of thinking.

 The problem is that it’s a good starting point in starting to heal the business of exhibition.  The idea of theaters producing their own movies is the foundation of Hollywood. In the past theater circuits would give rise to studios, for example Loews gave rise to MGM, Famous Players gave rise to Paramount.  Lately some want to be bureaucrats would attempt to shoot down the idea of independents controlling access to movies by summoning forth the bogeyman of antitrust. The Paramount Decree has been struck down, and in ways what is good for the goose is good for the gander. The anti-trust unit of the Department of Justice has far bigger fish to fry and frankly  even if the Paramount Decree was not struck down, there would not be a case. Independent Theaters producing and or distributing their own product is the legal equivalent of private labeling a can of peaches under the Kroger brand for sale in a Kroger supermarket. I am always suspicious of people who raise the idea of antitrust. I think they either have little grasp of the concept and little understanding of the shifting of the present legal landscape; either that or they raise it to meet some kind of agenda they may have.

 I personally think that there exists a strong alliance between streaming and a proper theatrical exhibition. When I was a much younger man and worked as a salesperson hawking VHS copies of movies into rental stores, I always knew that a movie that had a theatrical release would sell three times as many copies as a straight to VHS release. It made sense, especially if there was at least a 120 window between theatrical release and VHS release. The ideal window at that time was 180 days. When released on VHS the title would do very well for 35 days, renting almost every night but then would rapidly shrink as the next waves to theatrical releases hit VHS. There was a wonderful synergy between a VHS rental release and a theatrical release, they fed and complemented each other.

 Getting back to my point, a streaming service which allied itself with a release pattern of at least 120 days would find itself in an interesting situation. If the streaming service allied with a group of theaters which guaranteed itself exposure in all top 25 markets, coupled with placement in a solid portion of secondary rural markets, then the streamer, if they respected the window and were given say a 45 day exclusive for putting up a portion of the movies budget, would find a more than interesting sub market that could be established and exploited.

 Non-major streaming services like FilmRise, Plex, SlingTV and even Philo may find themselves suitable allies for independent cinemas. With the streaming wars showing signs of vulnerability in the majors, the need for all streaming services to define themselves in some way as being unique might find re-establishing a proper theatrical release order compelling.  There is a kind of interesting play in that streamers like Tubi are ordering a hundred plus original movies yet there is a drought of secondary production on theatrical screens. Some day and some day soon a streamer is going to firmly realize the need to ally with the independent theater owners and build an alliance in order to solve the problems of each other's market. If a properly structured ecosystem for content can be re-established, then a new possible market dynamic could be created, one that is so desperately needed right now.

 At the core is re-creating the moviegoing ecosystem, Hollywood has almost ham fisted and bludgeoned the ecosystem into non-existence. It was not done out of malice, the simple fact is that they really do not have a clue and they are no longer secure in the market they are truly serving. The same thing can be said for a lot of the circuits, they seem to be drilling down on technology again and forgetting about the need for more diverse and inclusive content.

 Globally, theater owners are starting knitting clubs (New Zealand) , offering margaritas with a movie ticket purchase, and tying in specific events into the release of a movie, all of which are great but it really is a distraction from the core problem ,there is not enough product.

There is no doubt that movies used to be at the center of the entertainment world. For the past 100 years, the Studio wielded immense influence over music, fashion, and everything pop culture. The core of this control came from an awareness that movies were the engine for an immersive and communal theatrical experience that heightened a movie's impact and created a cultural juggernaut.

 In their lack of wisdom, the owners of the studios decided to erode the theatrical influence purposefully in order to feed their new child, streaming. It was a deliberate and misplaced strategy that the studios thought would give far greater economic control.  It has been folly.

 Over the past decade due to the shenanigans of the studios (I love it when I can work in Celtic slang), movies have been displaced as the center of popular culture. Ticket sales have steadily declined since 2002. The windowing put into place has diminished the water cooler conversation about movies. The movies that drive the cultural conversation are ones that have a theatrical release. Streaming for all its ease and accessibility does not in any way shape or form creating a communal experience, only movie going does that. Today’s theatrical windows are a mess and are creating great harm in the business of not only exhibition but of streaming.

 It is time that the independent chart their own way forward and re-invent a proper movie ecosystem.