Why the Movie Business Is In Denial About Technology. Again

Talkies, color, television, DVDs, computers, the internet. There isn't an entertainment innovation in history to which Hollywood hasn't initially declared its fervent opposition.

They are now fighting a rear-guard action against releasing movies directly to the internet. But the writing, as it were, is already on the screen, and the major studios are quietly negotiating reduction of the time between theatrical and digital release. JL

Bryan Bishop reports in The Verge:

Hollywood has been facing stagnating ticket sales, competition from streaming services, and an IP-focused studio tentpole culture for years. “Even though we’ve had gains in box office, attendance has been flat" with internet usage as likely culprit.Ticket prices have masked the problem. Six of the seven Hollywood studios (a)re in negotiations to release their films for home viewing less than three weeks after they hit theaters. "This is disruption personified."

Hollywood has been facing stagnating ticket sales, intense competition from streaming services, and an IP-focused studio tentpole monoculture for years. None paint a particularly rosy picture for the future, so perhaps it shouldn’t be a huge surprise that one sentiment stood out above all others at this past week’s CinemaCon: denial.

CinemaCon is the annual trade show put on by the National Association of Theatre Owners, where movie studios, exhibitors, and related vendors come together to chart the course for the coming year in cinematic exhibition. It’s the kind of event where Universal Studios offers a surprise screening of The Fate of the Furious one night to get theater owners excited, and the next day attendees can hit the trade show floor to see the latest innovations in seating, signage, and Jack Daniels-infused Icees. Given the players involved, an abundance of enthusiasm about the business is to be expected, but over CinemaCon’s four days it would be easy to think that the film industry was in the greatest place it’s ever been.

Studio after studio touted their box office achievements. Executives couldn’t stop dropping superlatives, describing how the business was “thriving.” NATO chairman John D. Loeks went so far as to call reports about various threats to the industry “fake news.” But the truth is the industry is facing challenges, something that only Disney’s executive vice president of theatrical distribution, Dave Hollis, really had the courage to acknowledge directly.

“Even though we’ve had these gains in overall box office, we can also see that attendance has been more or less flat,” Hollis said during a Tuesday state of the union presentation. He stressed that while ticket prices have largely masked the problem, attendance simply isn’t growing, with the exponential uptick in internet usage and other activities serving as likely culprits. “This is disruption personified,” he said, to a near-silent industry crowd.

Studios have already decided a shorter theatrical window is a necessity

It didn’t help that a week before the show, Variety reported that six of the seven Hollywood studios were in active negotiations to release their films for home viewing less than three weeks after they hit theaters. Historically, the theatrical release window has been sacrosanct. It’s the amount of time movies play in theaters — and only in theaters — before rolling out to video on demand, Blu-ray, streaming services, and the other various options on a staggered schedule. Right now that window is largely standardized around 90 days (some players offer films a couple of weeks earlier through electronic services), with theater owners taking the position that a shortened window could irrevocably harm their business, if not sink it entirely.

Last year, Sean Parker disrupted CinemaCon when word leaked out about The Screening Room, his own streaming solution that would eliminate the theatrical window entirely. At nearly every opportunity last year, studio executives and filmmakers spoke out against the idea, culminating with James Cameron taking a chest-beating stand against the move on the final day of the show. But this year, nearly everyone was silent on the topic — no doubt because the very same studios that were presenting were the ones that have apparently decided a shorter window is a business necessity.

But theaters weren’t left without options either. Part of CinemaCon’s focus is on movie theater technology, and companies like RealD and Barco were there to tout their ability to lure audiences into theaters. Dolby announced that movies like Blade Runner 2049 (which continues to look promising) will be released in its high-dynamic range Dolby Vision format, which should be active on 100 US screens by the end of the year through the company’s partnership with AMC Theatres. But beyond the focus on cinema, there was also a small but noticeable shift toward another direction: virtual reality.

One of the most exciting things at CinemaCon wasn’t even cinema

Earlier this year IMAX launched the first of its “VR Experience Centre” pilot locations in Los Angeles, but at the time the company’s chief business development officer Rob Lister explained that the larger opportunity wasn’t in standalone locations like arcades, but in building on the relationships IMAX already had with exhibitors — essentially bringing VR stations to a movie theater’s lobby, or taking over an actual theater itself. It’s easy to connect the dots: if studios shorten the release window, movies will likely run for a shorter time, and so theaters will have to find new ways to monetize the locations and screens they already have. Location-based VR is an option, and a company called Nomadic VR was demoing one of the most intriguing options yet on CinemaCon’s show floor.

Larger, standalone installations like The Void have already paired untethered VR with interactive, physical locations, but Nomadic’s solution is to take that similar idea and turn it into a modular, scalable system that can be easily installed — and regularly updated — in locations like movie theaters.

Nomadic’s approach is to create a kit of parts and modules, ranging from partitions and doors, to smart props and wind generators, that can be easily assembled in a room using a grid system. Those physical items match up with the world seen through the headset — essentially skinning the minimalist framework in VR — and when coupled with a backpack-mounted computer, they create a free-roaming VR experience with all the benefits of tactile interaction. The demo I tried was short and fairly limited. I picked up a physical flashlight and used it to explore a room, ended up digging through a file cabinet to find a gun — all of which were real, physical items that were re-created in the VR space — and then had to head out onto a rooftop to trigger an EMP blast.

On my way to the roof elevator, I had to walk across a wooden plank that connected two buildings, and even though I knew I was in the safety of a demo at a Vegas trade show, the addition of tactile feedback throughout the piece fooled my brain enough that I actually wasn’t able to walk across the plank for fear of falling. (As it turned out, the “plank” was simply a board set two inches off the ground, hardly a safety hazard.)

Theaters can offer much more than movies

Nomadic came out of stealth mode last month, so the company doesn’t have any distribution or content partners lined up just yet, but even in the simple demo it was easy to see how that kind of tactile, untethered experience is a step forward from the pod-based approach currently being explored by IMAX. More importantly, it illuminates one potential future for movie theaters, one in which they are not the high church for cineastes that they are today, but in which their brick-and-mortar physicality makes them ripe for transformation into entertainment destinations that offer a variety of options — ones that go far beyond just films and popcorn. And if audience trends continue, that may not be just one option; it may be the only option, no matter how many big screens and deluxe sound systems exhibitors throw at the problem.

In 2010 the National Association of Theatre Owners took control of the trade show that had up until then been called ShoWest, rebranding it as CinemaCon. “Taking the show under NATO’s control allows us to rethink everything about what works and what doesn’t,’’ NATO spokesperson Patrick Corcoran told the Los Angeles Times at the time. “It allows the theater industry to take control of the messaging, marketing and perceptions of its industry’s premiere event.”

Despite the star appearances and hype-inducing footage this year, I couldn’t help but wonder if another similar shift was in the show’s future. If the lack of attention paid to theatrical windows, or transparent discussions about attendance, didn’t presage a time where the cinema side of CinemaCon would became just a little less relevant. In a world where location-based VR, in-theater dining, and other options are as important as the films themselves, the name CinemaCon wouldn’t even fit at all. At the point, we’d just have TheaterCon.