Do you immediately head out to your favorite movie theater when a newly released flick piques your interest? Or are you content to kick back on the couch and do your movie-watching a few months later when the DVD is released? These questions may be completely obsolete within a couple of years, as soon enough you may be able to watch a movie from the comfort of your own home while it simultaneously opens in theaters.
Last year, the Motion Picture Association of America, the lobbying organization of Hollywood studios, asked the Federal Communications Commission for approval to ""send movies fresh from the box office"" directly to consumers' homes. Basically, the studios are interested in taking the existing, though under-developed, Video On Demand infrastructure that exists on most cable and satellite providers, unifying it and beefing it up. The studios want to release movies earlier, possibly even the same day as their theatrical release, and in High Definition. Despite their long-existing reputation for stifling companies' liberties, the FCC was all in favor of the MPAA's proposal. In fact, the FCC determined that this would be ""in the public interest.""
This formal request was necessary because of the complicated legal consequences of the landmark 1948 Supreme Court case, United States v. Paramount Pictures. In this case, it was determined that movie studios could not own movie theaters because of antitrust law violations. By distributing their own movies directly to consumers' homes, studios would once again own their own means of distribution, and thus reenter some seriously dangerous legal territory.
Part of the MPAA's proposal included a new security against pirating called ""selectable output control"" or SOC. However, only time will tell how effective and practical the SOC will be at fighting piracy. The big studios clearly have their own doubts, and while the MPAA has been given the legal go-ahead, no major studio has actually made moves themselves.
Yet, Time Warner Cable recently pitched its own proposed system to the major Hollywood studios. They are calling it Home Theater On Demand, and the plan is that Time Warner would distribute recently released digital High Definition movies in the range of $20 to $30 to be viewed in the home. So far, no studio has announced participation in the program.
If acted upon, these developments will undoubtedly damage the theater industry. Movie theaters have already been competing with the increased popularity of watching movies at home that came with the rapid rise of DVDs in the past decade. Previously, studios had promised not to release DVDs until at least four months after their theatrical release, but this Home Theater On Demand system would destroy that theatrical release window. Many theater chains may refuse to show films that will be available on the system, leaving the studios in quite the quagmire: either forge ahead and hope that the new service gains enough popularity to more than make up for losses in theatrical distribution or relent to the demands of the theaters and set extreme handicaps on the new system.
The studios also stand to cannibalize their own DVD sales with the new system that adds Time Warner as a profit partner. If consumers spend thirty dollars for a one-time viewing of a movie at home, instead of the seven to ten that theaters are currently charging, are they really going to be willing to spend another fifteen to twenty later when the film gets released on DVD? How many consumers who usually wait for the DVD release to watch movies for the first time will instead be lured into the earlier viewing window offered by Time Warner's system?
The real deciding factor is how quickly this direct-to-home concept will catch on with moviegoers. It is likely that the public will give it a reasonably warm response early on. With the proliferation of high-speed Internet and widescreen television, the groundwork is certainly set. But movie theaters are so ingrained in our culture that giving them up may be both a psychological and practical issue for consumers. Will convenience and comfort win out over tradition and atmosphere? Will theaters actively work to increase their amenities and overall attractiveness enough to stay relevant?
It is inevitable that some system will eventually emerge to compete with movie theaters. How much longer theaters stick around in their current numbers and how large of a part they play in movie culture decades from now will be determined by their ability to perfect the experience they offer. The advent of modern luxury theaters is a sure sign of that. With Lay-Z-Boy recliners and Blu-Ray players at home beckoning to them, moviegoers want more than over-priced stale popcorn and uncomfortable seats. They want an experience worth leaving home for.
