Movie Industry Continues to Pursue Premium VOD Solution

Movie Industry Continues to Pursue Premium VOD Solution​

(May 30, 2017) Major film studios and domestic theaters know they’re in a fight with the in-home experience offered by modern consumer electronics (not to mention changing consumer viewing habits), and yearly statistics collected by the Motion Picture Association of America (MPAA) prove it. On the one hand, US/Canada non-3D Box Office sales have continued to rise over the last two years, following a general trend in the industry. During 2016, the MPAA reports that ticket sales hit $11.4 billion (the highest box office take in the last 10 years). However, overall admissions have been trending downward over the same period, with roughly 1.4 billion recorded in 2007 and 1.32 billion recorded in 2016. Obviously, this is a case of prices going up and attendance going down.

In order to keep revenues high and combat internet piracy, studios like FOX, Universal, Warner Bros, and AMC Entertainment have been pushing for a service called Premium Video on Demand, which would allow for movies to be offered to home viewers during the same 90-day period that movies typically occupy commercial theater settings. The true cost of an in-home premium rental hasn’t been established, but indications point to a one-time fee of $30 to $50 per film.

Interestingly, Disney’s CFO (Christine McCarthy) has said her company isn’t interested in Premium VOD. Last week, Home Media Magazine quoted the CFO as saying: “A lot of people get invested in the characters through our trailers. When we release, we believe, and I believe our consumers believe, that our movies are best seen on a big screen.” She went on to explain that Disney feels its genres are different than those of other Hollywood outfits, and that Premium VOD might not be a bad option for other studios.

Premium VOD raises obvious concerns for the exhibiter side of the equation, potentially removing customers and valuable concession sales from their theaters. Several months ago, theater owners gathered at CinemaCon (a yearly owner conference) and Premium VOD was on the discussion list. According to The Hollywood Reporter, studios and theater owners specifically discussed a reduction in the standard 90-day commercial film run window, which could open the door to a Premium VOD reality. How revenues could potentially be shared is a sticking point, which The Hollywood Reporter says is complicated by antitrust laws that dictate how cinema owners and studios can negotiate (in essence, individual theater owners will need to negotiate terms with each studio).

Several days ago, the inevitable seemingly took a few steps back, with AMC’s CFO (Craig Ramsey) stating that negotiations have stalled. According to another article in The Hollywood Reporter, Ramsey indicated that studios still haven’t figured out how to affectively offer Premium VOD during the sacred 90-day commercial cinema window. He also stated that cinema owners have serious concerns about such a service and its impact on revenues.

Tapping an evolving consumer market is critical to the health of Hollywood, but is the industry looking at the right solution? This problem could actually work out quite well for stubborn enthusiasts that prefer watching films in the home theater setting and consumers that favor watching movies on a device (where convenience trumps the theatrical viewing experience).

How does the potential for streaming current theatrical movies ring in your opinion? Would you pay a significant premium to stream current films into your home? Join the discussion and let us know your thoughts!

 

[JBrax]

I would absolutely be interested in being able to view new release films at home. NO way I'm paying $50 per movie though. If that price were to approach $20 then you have my attention. It's just a matter of time until this becomes reality IMO.

 

[Todd Anderson]

So my first inclination is: quality. We're talking streaming.

Second, is being more interested in having a physical copy.

But I don't think the general public shares either of these...and I'd have to agree that $30-$50 per film is rather steep!

 

[Jon Liu]

I have very little interest in a premium VOD. One thing that the last decade has taught me is that streaming quality still has yet to surpass the disc-based equivalents. Why exactly am I going to be paying as much or, in the case of this article, more to get that kind of lesser quality?

I do think us as a home theater enthusiasts generally are in the minority, so physical media among the masses is becoming less prevalent, but charging a premium for a less than premium experience seems like the wrong way to go. I have a hard time even justifying paying $30-50 dollars for movies that I will be able to physically own, let alone a digital copy or just the "rights" to stream the movie.

Also, there's just no way that the bandwidth limitations would allow for me to get the fullest experience of it. UHDs currently are anywhere from 30mbps to 100mpbs straight off the disc. Even if you got more efficient compression codecs to half that bandwidth without sacrificing quality, that's still a huge amount of data required. The consistency worries me as well. Provided you don't have any drops in internet speeds, the moment the video drops to a lower resolution or begins to have blockiness, the experience and immersion of the film would immediately be lost.

 

[Todd Anderson]

All well said, Jon.

Weirdly, I have to admit... I might pay $20 or $30 to watch a current release on a plane ride. ;-)

Desperate times.... desperate measures!

 

[ShpongleDMT]

I like the concept of it. I don't see the price as too much of a deterrent though. Right now, if was going to take my family of 4 to the movies just the tickets alone would be $43.20. Then you go inside and get railroaded on food and drinks.

 

[Todd Anderson]

Good point... I took my family to see Rogue One at the Dolby Cinema and it was basically $100 ice all said and done...still, though, that price for a smaller crowd and a lesser theater drops quick.

 

[Tonto]

Well there is no doubt that we, most likely, are into movies more than the average Joe. Even so, $30-$50 is ridiculous. Granted, some movies beg to be seen on the big screen, but how many? For me, the last one was Avatar and Lord of the Rings series. Since then, nothing much. It looks like the studios are trying to keep up the same $'s that they are currently getting. That will not work with VOD. We have put our $'s into our HT's so we don't have to depend on the local box office. I can't imagine paying that kind of money for sub par streaming when Redbox is fixing to have it for less than $2.00. And with the advances in HT video/surround sound, the big screen is losing a good portion of its appeal. Specialty theaters are nonexistent here in T-Town, no Atmos enabled theaters even planned--so how do they expect to draw me away from home? What do they expect? I think they are hiding from the inevitable reality that, every business has to adjust to the evolving market. We will see how it plays out! I suspect it wont be something that we, as customers, are happy with.

 

[Todd Anderson]

I don't get to the movies often... but it is fun to take the family on occasion just to have a night out. We recently saw the new Guardians of the Galaxy at an ArcLight Cinema. It was a good overall experience... but crowded and the theater/restrooms/concessions area had obviously taken a beating during the day. That was the low point for me. Other than that, we all enjoyed the presentation.

Expensive though!

But... a great home theater experience isn't cheap either.

 

[1_sufferin_mind]

Perhaps if the business model included a hard copy along with the digital, I'd be more inclined to purchase. That's the converse of the current model which packages a digital download with a physical disc, so how could you expect industry backlash? In cases where the film commands a big-screen presentation, I'd be inclined to go see them in a decent theater before buying a download/disc.

The problem is that it's getting harder and harder to find decent theaters. The megaplex cinemas I've been to reserve their best theaters for the most popular titles. The remainder are relegated to second or third-class accommodations. They've got small screens, aren't comfortable, and frequently entertain unruly, impolite crowds who ruin the theatrical experience. The definition of "theatrical experience" has changed over the years. It's no longer associated with positive vibes.

Start

I didn't mean to turn my post into a rant but that's how it's coming out of the wash! People used to behave when asked to quiet down or silence their phones. Now they respond as if they did nothing wrong. Managers used to expel violators. Now they just issue free passes to the violated - if they go to the trouble, inconvenience and embarrassment of complaining. But who wants to come back for more of the same punishment?!
End

 

[Jon Liu]

Perhaps if the business model included a hard copy along with the digital, I'd be more inclined to purchase. That's the converse of the current model which packages a digital download with a physical disc, so how could you expect industry backlash? In cases where the film commands a big-screen presentation, I'd be inclined to go see them in a decent theater before buying a download/disc.

The problem is that it's getting harder and harder to find decent theaters. The megaplex cinemas I've been to reserve their best theaters for the most popular titles. The remainder are relegated to second or third-class accommodations. They've got small screens, aren't comfortable, and frequently entertain unruly, impolite crowds who ruin the theatrical experience. The definition of "theatrical experience" has changed over the years. It's no longer associated with positive vibes.

Start

I didn't mean to turn my post into a rant but that's how it's coming out of the wash! People used to behave when asked to quiet down or silence their phones. Now they respond as if they did nothing wrong. Managers used to expel violators. Now they just issue free passes to the violated - if they go to the trouble, inconvenience and embarrassment of complaining. But who wants to come back for more of the same punishment?!
End

I hear ya. A few years ago I stopped going because my favorite theater kind of went to shambles. The theater was a THX certified theater that eventually lost/gave-up the THX certification. Others theaters in our area were just terrible experiences that we consistently avoided. A while after I stopped going though, I heard they started revamping theaters. For a long time I still held out going to theaters because of that disdain I felt for cinema experiences. In the last year or two though things have changed and I've been going back to the Cinemas. I'm not sure when, but one of our theaters got an overhaul that also included a Dolby Cinema relatively recently. That is an experience that I will regularly pay a premium for. No longer do I have to sacrifice quality for the big-screen experience.

We still reserve our cinema-going experience to movies that are our must-see films though.

 

[BD55]

I would have a really hard time paying >$20 to stream a movie. I have fiber internet, and it's plenty fast to stream 4K, but that still doesn't change what happens on the other end of the pipe when demands are high (pardon my simpleton view of the interwebz). e.g. Netflix still has trouble at times, and if I'm paying a premium to watch something, it better work flawlessly if I'm doing all I can on my end.

As to our theater habits, others may find this odd, but we don't go to see movies often in theater because we don't want to see much of the content that gave the movie its rating. We'll typically gauge a movie by its reviews, get the disc when it releases on Netflix, then watch it on our Clearplay bluray player, which can selectively edit content we don't appreciate such as swearing, excessive gore, nudity, blasphemy, etc. If we really like it, and the filtering works well, then we think about buying the movie.

I do think us as a home theater enthusiasts generally are in the minority, so physical media among the masses is becoming less prevalent, but charging a premium for a less than premium experience seems like the wrong way to go. I have a hard time even justifying paying $30-50 dollars for movies that I will be able to physically own, let alone a digital copy or just the "rights" to stream the movie.

Also, there's just no way that the bandwidth limitations would allow for me to get the fullest experience of it. UHDs currently are anywhere from 30mbps to 100mpbs straight off the disc. Even if you got more efficient compression codecs to half that bandwidth without sacrificing quality, that's still a huge amount of data required. The consistency worries me as well. Provided you don't have any drops in internet speeds, the moment the video drops to a lower resolution or begins to have blockiness, the experience and immersion of the film would immediately be lost.

This

But... a great home theater experience isn't cheap either.

I agree with this whole heartedly - and my wife can attest to this as well... but we both concede that part of the draw of home theater is the control - the ability to dictate what's being shown, freedom of snackage and bathroom breaks, and so on.

 

[Todd Anderson]

Interesting points of view...

Have you guys managed to experience a Dolby Cinema or Arc Light?

Dolby Cinema is a true one of a kind commercial experience...check their website, they are spreading rapidly!

 

[Todd Anderson]

I would have a really hard time paying >$20 to stream a movie. I have fiber internet, and it's plenty fast to stream 4K, but that still doesn't change what happens on the other end of the pipe when demands are high (pardon my simpleton view of the interwebz). e.g. Netflix still has trouble at times, and if I'm paying a premium to watch something, it better work flawlessly if I'm doing all I can on my end.

As to our theater habits, others may find this odd, but we don't go to see movies often in theater because we don't want to see much of the content that gave the movie its rating. We'll typically gauge a movie by its reviews, get the disc when it releases on Netflix, then watch it on our Clearplay bluray player, which can selectively edit content we don't appreciate such as swearing, excessive gore, nudity, blasphemy, etc

Pretty cool you have a way to control the content you want to see... and, obviously, that wouldn't be possible in a commercial setting... and most likely not via streaming, either.

 

[BD55]

Pretty cool you have a way to control the content you want to see... and, obviously, that wouldn't be possible in a commercial setting... and most likely not via streaming, either.

There are (were) a couple streaming solutions, VidAngel and Clearplay, though one is essentially kaput and the other is almost shut down, respectively. It's been interesting to see what has unfolded as they've gained popularity - essentially a number of large studios (including Warner, Disney, and Fox), sued VidAngel for "streaming their films without the right to do so", while Clearplay is the other also provides streaming filtering, but via GooglePlay and also has quietly reduced dramatically the amount of streaming content. Though I didn't really agree with VidAngel's business model, it was definitely ground breaking.

In essence, studios will not allow their streaming content to be filtered. Period. They even fought very hard against filtering at the DVD/Bluray player level, in your own home!

The way Clearplay works is the player downloads filters and will either mute audio channels or jump time stamps through the content. Usually it's done well to coincide with a camera shot or scene change. You can also change the level of filtering for each content category, and most of the time it works well. Is it a perfect system? No. Is it for everyone? I don't think so either - obviously the studios and directors don't think anyone should be allowed to alter their intended message. And I can understand that...in a commercial/theater setting. Just don't dictate what I have to watch in my home.

 

[JBrax]

Interesting points of view...

Have you guys managed to experience a Dolby Cinema or Arc Light?

Dolby Cinema is a true one of a kind commercial experience...check their website, they are spreading rapidly!

The Dolby Cinema is the only one worth leaving the house for. You have your own recliner, premium sound and screen, and people just seem more respectful of others.

 

[Todd Anderson]

The Dolby Cinema is the only one worth leaving the house for. You have your own recliner, premium sound and screen, and people just seem more respectful of others.

I've had a similar experience at Arc Light... similar to Dolby Cinema you have access to Atmos and online seat booking... but you don't get those INCREDIBLE Dolby Vision projectors. Wow... those are something else. The first time I attended a Dolby Cinema my eyes rolled down the aisle. I did note that the sound was a tad on the loud side... but the bass was sooooooo good. Very deep. Major thumbs up for Dolby Cinema.

 

[Todd Anderson]

There are (were) a couple streaming solutions, VidAngel and Clearplay, though one is essentially kaput and the other is almost shut down, respectively. It's been interesting to see what has unfolded as they've gained popularity - essentially a number of large studios (including Warner, Disney, and Fox), sued VidAngel for "streaming their films without the right to do so", while Clearplay is the other also provides streaming filtering, but via GooglePlay and also has quietly reduced dramatically the amount of streaming content. Though I didn't really agree with VidAngel's business model, it was definitely ground breaking.

In essence, studios will not allow their streaming content to be filtered. Period. They even fought very hard against filtering at the DVD/Bluray player level, in your own home!

The way Clearplay works is the player downloads filters and will either mute audio channels or jump time stamps through the content. Usually it's done well to coincide with a camera shot or scene change. You can also change the level of filtering for each content category, and most of the time it works well. Is it a perfect system? No. Is it for everyone? I don't think so either - obviously the studios and directors don't think anyone should be allowed to alter their intended message. And I can understand that...in a commercial/theater setting. Just don't dictate what I have to watch in my home.

I have to admit that I'm not entirely familiar with those services... very interesting concept. And, yes... Hollywood is the only one that wants to control its IP. Just look at how restrictive the industry can be with licensed goods (toys, etc). Once you begin to open the door to altering IP, it probably sets a precedent that is a potential nightmare for studios on the licensing end. (just a guess... but I've heard quite a few experts talk about the licensing end of things)

 

[Jon Liu]

Nowadays Dolby Cinemas and IMAX are about the only ways I want to watch a movie outside of my home. After watching Guardians of the Galaxy v2 in the Dolby Cinemas I can think of no other way I would rather see a film outside of my home. Conversely, the movie I watched prior to GotG v2 was Logan in a standard theater. The black level was really washed out and the picture was only satisfactory when it came to sharpness.

The Dolby Cinema Laser projectors, the Atmos sound format, and the reclining lazy-boy seats make it definitely worth the premium to me.

 

[Todd Anderson]

Jon - I saw a film you and I hold dear (Interstellar) in an IMAX. It was a terrible experience. The audio was about 15 dB too loud... but the screen was completely washed out by the emergency hallway/exit lighting. Yes - WHITE LIGHTING!!!

Ugh.

It was all that I could do to force myself to stay in that theater.

Dolby, if I'm not mistaken, uses red lighting?

 

[Jon Liu]

Oh man... that is TERRIBLE!!! I saw it in IMAX as well and I don't remember seeing lighting washing out the screen. The Audio was quite intense overall, although I don't know if our theater was as overcooked. The pipe organ music can sound too intense to some (like my wife).

Speaking of Interstellar... I would absolutely love, love, LOVE to see that come to UHD Blu-ray with the switching aspect ratios, sooner rather than later!

I'm not entirely sure about the lighting in Dolby. I wasn't quite paying attention to that. I guess it's a good sign if I didn't notice it?

 

[Todd Anderson]

It does have a very cool distressed (is that the right word?) audio package when it comes to the pipe organ. But I'm fairly sure all the other sounds were hyper presented.

I agree with you... Interstellar on UHD BD with Atmos. Can you say re-release of the year? I would preorder that yesterday.


I'm 99.9% sure that Dolby installed red lighting near the floor and exit areas of their Dolby Cinemas. If they can maintain the interior quality of those theaters, they have quite an impressive product.

 

[JBrax]

Yes, our Dolby Cinema uses red lighting. Everything about the experience is just well thought out and implemented perfectly. I'm not sure if the ticket cost is the same everywhere but at $18/per it should be a premium experience.

 

[Jon Liu]

You probably have more insider info on the inner workings of the Dolby Cinema, so I'll assume that they do have red lighting.

The only aspect that I don't find quite as attractive in the Dolby Cinema is the tactile transducers they use in the seats. It's not overtly distracting, but it is a bit too noticeable to me. I don't know if they use those transducers in all their cinemas, but I'd rather have a bit more realistic tactile experience.

 

[JBrax]

We also have the transducers but they don't bother me. Honestly I don't really notice them so ehh…take 'em or leave 'em.