Home Theater to Replace Going Out to the Movies?

There has been a lot of discussion and debate revolving around the future of media; more specifically movies, how they will be delivered and viewed in the future and whether we are moving towards a point where theaters will become obsolete altogether.

Recently I chatted with a friend about this and we came down on opposite sides of the ‘debate’. Personally I believe in the eventual decline of movie theatres and that in 5-10 years we will all be able to download or purchase newly released films from home; that someday soon everyone will have HD televisions, home surround sound systems and will be able to enjoy the latest blockbuster (on release day) from the comfort of their own home.

People talking at the movies… justifiable homicide?

My friend’s point was that people will never want to give up the “theatre experience”…however, as much as I enjoy (pls see: sarcasm) having my seat kicked repeatedly, being interrupted by a cell phone, listening to the people behind me talking and explaining every fucking aspect of what is happening on the screen to each other and my shoes sticking to the floor…I am confident that I will not miss the “theatre experience”, as I will have replicated it in my own living room…sans the interruptions. Hell, we could even provide a real-time review of the movie via remote control / Bluetooth keyboard, of which will immediately post online (through your TV / DVR, which are increasingly offering online connectivity) to film websites, social media and will drive more buzz and exposure for a film as people comment on it and (to the studios delight or chagrin) bring increased awareness of the film (and your opinion) to all of your friends and contacts.

However, I will concede the point that unless downloadable movies become more affordable (how much is pay-per-view these days?), which is to say that the industry will realize that the vast majority of Americans are plugging in from home, people will still go to the theatre. I’m not talking about on-demand movies becoming available months after a film has left the theater, but rather new movies being available at home on the day that they are released. What theaters have going for them is cost effectiveness…$9.00 a person (not to mention that $8 hot dog) in a room of 300 people with 1 projector / screen…not a bad formula. I will also concede that there is an allure to the ‘shared experience’ one feels when laughing or being entertained in a room full of people, surrounded by massive speakers and in front of a huge screen.

However, as home televisions get bigger (I love my 56″ flat screen…preeeecious) and surround sound systems get cheaper (not to mention the number of people creating plush theater rooms in their homes), how much would you be willing to pay to just stay home and watch the newest blockbuster from your couch? I venture to guess that most of us would be willing to pay more for that convenience. Let’s say a new movie is released on a Friday. You could go to the theater and wade through lines and crowds, not to mention having to get there early to nab good seats etc. Or you could pay (for instance) $14.99 to download and stream it in HD from home, with the added benefit of being able to watch it for 24 hours (like standard on-demand movies).

To me, this is a money-making formula for movie studios. There is virtually no overhead (eventually) to the distribution of their films; millions of people simply accessing the same movie from their (studios/distributors) servers, all paying a good amount of money to stream something digital. No more producing physical film reels and shipping them out to theaters.

This is similar to Netflix…in a way. Netflix purchases (at a discount) a number of DVD copies for a particular film that they send out and make available repeatedly to their customers. As a customer, I pay a monthly membership fee regardless of whether it takes me a month before I get around to watching the movie. Let’s say Netflix buys 1,000 copies of “Saving Private Ryan” at $9.99 a copy (I am sure it is much less). For their initial investment of $10,000, they make MUCH more in subscription fees for something that they essentially re-use over and over and over (rinse & repeat). Granted, Netflix also pays a stipend to the studios.

A digital delivery system is, even more, cost-effective as – other than the cost to produce the movie – there (technically over time) would be no need to create as many physical discs. Sure, people will still buy their favorite movies, but I am thinking of further down the road as digital delivery of films becomes more prevalent, people will rent it from home the day it is released, not to mention re-rent it at a later date if they choose (more $$$), rather than owning a huge DVD collection that may become obsolete when the next medium/media (i.e. VHS –> DVD –> Blu-Ray) is developed. Or rather, as the PS3 and other devices are allowing, you can purchase your digital copy of a movie and store it on your devices hard drive to watch anytime. Personally I think people will eventually choose the latter storage option (as memory gets bigger, cheaper and more expandable), but for now, we do still like to own a physical copy that we can hold in our hands.

Back to the premise of simply delivering a new movie to our homes on release day. Personally, I would pay $19.99 or more to do this. The reason? I normally don’t go alone and if I am with my girlfriend, I am going to pay that much anyway. Studios know this. They also know that you may invite 20 of your friends over to watch the movie…and this is where they see the potential to lose money. Do we charge each person individually like we do at the movie theater ($9 x each person)? Or charge potentially less/more for people to watch from home, knowing some people will offset the cost by having friends over (whom we can’t charge)? Or does it balance out in the end? Sure, you may have friends over when you pay $19.99 or $24.99 to stream a new release. But there will also be people who watch it alone, paying far more than they would pay as an individual by going to the theater…do you follow me?

Another thing that I foresee of is POS (point-of-sale) revenue. Have you noticed that it seems to take less and less time from when a movie leaves the theaters to when it is already available on DVD? Lately, the time it takes for this to occur seems to be roughly 3 months. Personally, I see a huge revenue stream in selling (making available) copies of the movie as people are leaving the theater, having just watched the same movie! Honestly, how many times have you walked out of a theater, having loved the movie and wanting to see it again? Now imagine that as you exit the theater, you can buy a copy of it as you leave?!

Movies are coming out on DVD faster and faster these days, why not cut out the bullshit and make it available at the height of their interest in the film? How many people will make ’emotional buying decisions’ (excuse the industry jargon), because they are on a high from a film they just loved and can buy it immediately?

Just my two-cents on the subject, but what do you think? Will you always want the ‘theater experience’? How much would you be willing to spend to watch a new release from home? Would you find yourself ‘suckered in’ to buying the same movie you just watched in the theater as you leave because you dug it so much and wanted to watch it again?