Let's Go Save the Movies!
Show of hands: how many of you have gone to the movies before? Let’s see…oh, all of you? Like, literally, every single one of you? Oh, okay. That’s cool. That makes sense. Because I mean, let’s be real, unless you were raised in an Amish barn you probably stepped out of your house at some point in your life to catch a film at your local multiplex. Maybe it was a Friday night ritual for you and your family. Or maybe it was something you and friends spent all summer doing. Perhaps it was your prison for an awkward date or two (or three, or four…) The point is, we all go to movies. There is no communal act more ingrained into American culture. It is an activity that spans generations, from little children giggling at talking animals, to teenagers looking for the perfect place to makeout, to parents looking for a night away from the kids, to grandparents looking for some culture and nostalgia about said kids. Simply put, going to the movies is living life with ticket stubs as milestones.
But if going to the movies is so great, why does everyone keep telling me it’s dying? The answer: Because it is. Well, kind of. If you were to take a peek at the Motion Picture Association of America’s annual Theatrical Market Statistics report (just Google it) then you would see that over the last decade and a half theater attendance has been dropping. And this should come as no surprise. Heard of Netflix? Shit, heard of TV in general? The common consensus since The Sopranos came into our lives in 1999 is that TV is just getting better and better and bigger and bigger. Cable brought quality. Streaming brought quantity – and all in the comfort of your own home no less! The movies, what with their rising ticket prices and requirement of actually socializing with other human beings, have been finding it harder and harder to compete in the era of Netflix and Chill.
So it should also come as no surprise that these days the main conversation every year at CinemaCon, the annual convention of movie exhibitors put on by the National Association of Theater Owners (they’re the other NATO), is “How in the world are we going to save the movies?” Every one and their mother has ideas from studio chiefs only wanting to greenlight properties with burning hot IP to theater owners creating auditoriums with 4D chairs that move and shake with the film on screen. Everybody is trying something, but no amount of creative thinking has been able to slow the momentum of the inevitable reality – the reality of Premium Video on Demand.
For those unfamiliar, PVOD refers to the proposal of placing new, studio-distributed films directly on digital home video platforms either day-and-date with the release of the film in theaters or very close to it. Studios want this because they feel this is what audiences want. They see the stagnant attendance numbers and read them as audiences preferring to consume content at home instead of at a theater. Theater owners, on the other hand, are naturally against (nay, straight up hostile towards) PVOD because they see it as the death of their business. If audiences could get the next Avengers movie in their home the same day it came out in theaters, how many people would choose the theater? Exhibitors believe the answer is next to none. But with Netflix and Amazon buying and making new films, studios see the future of movies as being in the living room, not the auditorium, and they don’t want to have to pay to have their films on screens that nobody is watching.
But for the time being, studios need theaters purely because they have no set system in place for how they would distribute a film on PVOD. Plus, contracts and good faith practices with exhibitors currently discourage studios from making new films directly available to consumers within 90 days of a film’s release date. However, it cannot be denied that change is coming and for the first time ever theater owners and studio executives are actually talking about what a world of PVOD could look like. There are many challenges, chief among them being that due to anti-collusion laws, studios are not allowed to discuss with each other how to create an industry-wide model that they all can adhere to. Same goes for exhibitors. What this means is that any PVOD deal made would have to be one made individually between a studio and a theater chain. Multiply that by the number of theater chains and studios and you could get a real mess where no real standard is in place. And Hollywood, for all its free-spiritedness, is a town that loves structure and “rules,” even if they are simply there to be broken.
So what to do? Well, fret no more Hollywood moguls. For while you cannot come up with a plan together, there is nothing that can stop you all from adopting a plan made by some independent guys standing on the sidelines! That’s right, the Hall Brothers are here Hollywood to give you your future. What we are about to propose is our vision of a PVOD plan that could actually work for everybody. And while we have no business or law degrees and zero executive experience (so maybe we’re more in the nosebleed seats than on the sidelines), we fully believe that this is a plan that could save movies and “the movies” for a long, long time. Now first, let me set up some rules:
- I want to be upfront and say that I am unashamedly pro-artist and pro-exhibitor, in that order. If I had it my way, it would be illegal to watch films on iPads and all standard definition DVD players would be turned into litter boxes. Theaters are by far the single best way to experience a movie. They are cathedrals of sight and sound specifically designed to overwhelm your mind and transport you to another world. There’s proven magic in a movie theater that just cannot be replicated in your living room. So this whole plan should be read with a giant, whiny, “I mean, if we have to…” in front of every sentence
I am a proud millennial, so let that squash any of the “But yeah, millennials won’t like that” counterarguments. If I have to read one more quote from another studio executive telling millennials what it is millennials like I might have to punch a kitten in the face. (That last sentence might be the most millennial-y sentence ever written.)
This plan operates under the idea that this will be an industry-wide model to be applied to every studio, every theater chain, and every movie. We sought to create a one-size-fits-all plan because we believe that is the only plan that can truly work.
Most proposed plans you’ll see in the trades right now use a specific number of days as their measurement of time between when a film is released and when it could be available to watch at home. This makes sense for legal contracts, but for our purposes we are going to measure by the more rudimentary metric of “a weekend” since weekends are when most people see movies and therefore most exhibitors make their money. So, for example, when we say something like, “They’ll have a movie for two weekends” that can generally be understood to be, like, 14 to 17 days.
Okay, so enough set-up. Let’s go save the movies!
The Plan At a Glance
The Key Questions
There are two big questions that face PVOD planners and they are “How soon should we make films available at home?” and “How much should we charge people for it?” When it comes to the first question, if you read the trades then you’ll have seen that proposed plans range drastically, from day-and-date to 17 days (two weekends) to 30 days (four weekends). The only answer agreed upon is that 90 days (a whopping 12 weekends) is too long. With the increasing amount of movies that come out per year combined with the increased speed at which pop culture is consumed, three months is too long to spend on any one thing. As for the second question, proposed prices vary, but they generally land in the $30 to $50 range.
Let’s start with answering the time question.
The Exclusive Theatrical Window
For our plan, we propose that theaters will have exclusive rights to a movie for two weekends. Now you might be surprised, considering that I said I am pro-exhibitor yet I am choosing one of the shorter proposed time ranges for theaters to have a movie. Here’s my thinking: I think one of the things that attracts people to places is exclusivity. Now theaters technically have this now, but they don’t flaunt it like they should. With this structure, theaters will have two weekends (and all the glorious days in between) to tell people “If you want to see X movie before it drops everywhere, then you gotta come on down.” They need to straight up brag about how you cannot see this movie anywhere else. No one will want to be the dude who waited two weekends to see Nolan’s Dunkirk while all his friends actually got up off their butts and went down to the theater. Plus two weekends is not a lot of time, which means that demand will be high to get a seat. With only so many hours during the actual weekend, theaters should see increased midweek ticket sales with people looking to get in on the action.
During these two weekends, theaters should go bananas. I’m talking marathons, giveaways, Q&As, costume nights, you name it. Make these two weekends freaking events that make the experience more than just watching the movie. These days, people can “just” watch movies at home, so theaters should use these two weekends to give their audiences something more than just overpriced popcorn and candy. As a general rule, if it’s something that I can do/get in my living room/kitchen, then you need to think bigger. A lot of theaters are already converting parts of their lobbies and concession areas into lounges and bars, which is a great first step. Now go bigger! Build theaters with original (no pre-existing chains) restaurants inside, where moviegoers could literally get dinner, see a movie, and grab a drink afterward all in one place. Make each area nice enough to draw people who aren’t necessarily looking to do all three things. I know I’m getting off track, but I’m just saying – if you treat your theater like a destination to be sought out then it will become one.
Plus, it’s a myth these days that people don’t like to get out of their houses. Are you kidding me? People love to get out of their houses! We want to go to places that offer something exclusive and unique, something that we can’t get at home or down the street. Hell, look at literally anyone’s Instagram feed. What are people taking pictures of? It’s all the cool places they are and the cool things that they’re doing! And they take a picture and put it on Instagram to document how cool they were for being somewhere so cool doing something equally as cool. Exclusivity and extravagance are the currency of social media and people will plow into theaters to not only see, say, Robert Downey Jr. yuck it up with Spider-Man, but to take a picture of their ticket stub on a candlelit table next to an artisanal cocktail with the Spider-Man poster artfully out of focus in the background with the caption “Tobey Maguire will always be my Spider-Man but damn this was a fun night.”
The Theatrical Window, Part II
The standard model right now is that movies stay in theaters for roughly 12 weekends (90 days). We propose that we cut that down to eight weekends. This should be helpful to studios because it will cut the costs of buying screens for their movies that no one, by that point, is really seeing anymore. Plus, theater owners are going to need the extra screens to account for the demand that they should be generating during their exclusive window. Let’s use an example: Say it is early June and a theater with ten screens is still using one of its screens to show Logan, which came out in mid-March. Now, Wonder Woman is about to come out and let’s just assume DC did right by the character and made a good movie with a strong female lead that is generating a lot of buzz. If the theater still had to block out show times for Logan, even if just for part of a day, that will be wasting valuable time when they will need to be putting Gal Gadot on as many times a day as possible. Remember, they’ll have two precious weekends to really squeeze out all the worth from a new title. They don’t have time to waste a 300-seat auditorium on four people.
The PVOD/Digital Window
For our plan, people should start to be able to watch new movies at home two weekends after a film is released in theaters. Now the whole point of PVOD is that it is premium, which means you’ll be paying a premium price. We’ll get to our price suggestions in a moment, but we propose that the PVOD window last for four weekends. These are four weekends where consumers will be able to weigh whether they want to pay the premium to have a movie at home or pay a cheaper price to go to a theater. During this time, theaters should see diminished traffic but they can still expect to reasonably compete for mid-level moviegoers who might not have the enthusiasm to see a film the moment it comes out. Once the PVOD window ends (which will be a whole six weekends after a film first came out in theaters) studios can begin to allow audiences to rent films at a standard, non-premium price as well as the ability to buy digital and Blu-ray copies. Theaters, who will probably already see substantially diminished audiences by this time, will still have a film for two more weekends, to really milk the most out of any last minute stragglers who might not have a smart TV or computer (trust me, they’re out there) or people wanting to catch the experience of seeing a film on the big screen one last time.
Most proposed PVOD plans suggest prices that range from $30 to $50. We think $50 is too high for young, tech-savvy consumers to spend on something they won’t actually own. To make PVOD competitive, we are shooting low and saying $30 is a reasonable price to pay to watch a movie two weekends after it already came out. Because what is it you are actually paying for here? You’re paying for convenience. That is what we’re putting a price on. Let’s say I’m a parent of a young family. I have three kids all under the age of ten. My spouse and I are young, so we don’t have a lot of extra money. With gas, tickets, and perhaps some concessions I’ll be out $50 easy if I take the whole fam bam to the movies. Now the allure of staying home and not dealing with rustling up the kids is strong, but is it strong enough to pay what I’ll already be paying if I took everyone out? I’m wagering not and so I think $30 makes this suddenly very tempting. I could rent the movie and order the family a pizza with the savings. Now I’m getting to watch a new movie, be thrifty, and not have to deal with making sure my kids don’t poop their pants in a movie theater. I’ve struck the mother lode!
Let me throw out another scenario. I’m a young guy living in an apartment with some roommates. A new film is out that we all only kind of want to see. At $50, we’d for sure all say “Nah, forget it.” But at $30 we could all split that and pay roughly $7 to $10 each if we invited some buddies over to join us. Suddenly that sounds like a nice plan.
The Sharing of Revenue
Now a key component of PVOD plans are that theater owners will share in the profits of rentals. We propose that theaters will still retain at minimum the same percentage of a rental sales as they do from ticket sales. Now these percentages are normally on a schedule, where studios will take higher percentages early in a film’s run and relinquish more to the theaters as films remain on screens. Historically, theater owners have made up for this by selling concessions, but they obviously cannot sell you popcorn in your home. So studios would need to pay a Concessions Tax on top of whatever percentage they’ve negotiated with the theater during the PVOD period. The tax would be individually based per theater and drawn from how much that theater reasonably stands to lose from not selling concessions. Once the PVOD period is over, our plan would allow studios the right to start selling copies of the movie. To counter this, theater owners would be guaranteed 100% of ticket sales they make during the final two weekends of a film’s theatrical run.
The Star Wars Tag
I believe so far that everything I have laid out can be applied to any movie from any studio at any time. Except for one. In a world of Premium Video on Demand, there is one video that would be just a little more Premium than Premium. I’m talking about a little space saga that takes place in a galaxy far, far away. And like we mentioned before, the whole notion of PVOD is that you’re paying extra for a premium service. Naturally then, we believe then that you should be paying more than extra for the premium of premium services. We call this philosophy The Star Wars Tag, because it’s the only franchise we can even reasonably apply it to. Let me break it down:
The highest grossing film of all time (not adjusted for inflation) is 2015’s Star Wars: The Force Awakens and 2016’s Rogue One: A Star Wars Story comes in hot at #7. Hell, even with inflation, 1999’s Phantom Menace is still #9 and 1977’s original Star Wars is #10 (though their numbers are padded with re-releases). For Force Awakens, that film stayed at #1 at the domestic box office for four straight weeks. Rogue One was #1 for three straight. This is a sustained demand that most films these days can only dream of. For both studios and exhibitors, why would you want to risk cutting that type of demand off?
For our plan to work, though, it must be a plan that we can apply to every movie – even Star Wars. But Disney obviously should not be penalized for having the most valuable movie franchise of all time. So, being an instance of notable exception, a studio like Disney should be allowed to place a luxury tag on certain titles like Star Wars that would raise the cost of a PVOD rental. I’m going to say $100, but I could be talked into going even higher. Imagine it though: watching a brand new Star Wars movie in your home two short weekends after it comes out in theaters. That’s almost unfathomable. Right now Star Wars is the only title that I think has the clout to do this, but it will obviously be a tag that studios can place on titles at their own discretion. But like I said, I don’t think there is a single franchise right now that could do this other than Star Wars, so I would urge studios to use this tag with caution.
A Final Pep Talk
So that’s the plan. And believe it or not, there are still so many things to discuss! Like, how will PVOD be distributed? Through iTunes? Amazon Prime? Both? Some new third-party app? And how will PVOD effect ticket prices, if at all? And how does this plan work with the rising number of films coming out every year? This column is already too long so I won’t try and answer those questions today, but hopefully what you’ll see with this plan is a first stab at a possible solution for keeping movies alive.
But with all that said, let us not lose sight of the fact that the only thing that can truly save “the movies” are the movies themselves. Over the last decade, the marching orders placed on every studio chief is to find branded properties that can be used to create sustainable franchises. We might still get our adult dramas and offbeat comedies, but these hardly light up the box office and compared to the sequels and reboots that define a studio’s bottom line they are relatively meaningless to the larger machinations of the business. In theory, I have no problems with sequels and reboots. However, I do have a problem with the biggest Hollywood movies amounting to glorified TV episodes in a seemingly never-ending television show.
Movies are getting their ass kicked by TV because they are trying so desperately to play TV’s game. It’s like if at a boxing match a fighter heard that most of the crowd was cheering for the other boxer and instead of trying to win the crowd over he decided to allow himself to get punched in the face because it seemed to be what the people wanted. Movies right now are that first fighter and it sounds to me like Movies needs a pep talk, to which I say:
Hey, Movies! What are you doing? C’mon! Get up! You got this! Don’t you realize – you’re Movies! You defined pop culture for the better part of a century! Sure, you’ve been taking some hits the last few years, but remember when TV first came along in the 1950s and everyone thought you were down for the count? And remember how you got up off the mat and punched TV back in the face by telling stories in a way only a movie can? You got big! You started telling Biblical epics and extravagant musicals! You traveled the world and shot in places no dinky TV show could ever dream of going. You literally got bigger by making larger, wider screens with insane aspect ratios. You pulled off incredible stunts and were constantly inventing new special effects that would wow audiences again and again. You were showing America something they could not possibly see anywhere else. And you never, ever bothered to tell a story unless it was one you could tell completely.
So you’re back on the mat again and once more everyone is telling you that TV is here to knock you out for good. But it doesn’t have to be this way! You just need to get big again! And I’m talking capital B-I-G BIG! And that starts with the stories you tell. Don’t bother with all these cinematic universes with never-ending sequels and spinoffs. Leave that serialized crap to those lame-o’s at TV. Tell epics, with true beginnings, middles, and (most importantly) ENDS! Make yourself an experience again, one that isn’t watered down by the idea that “Oh, there’ll just be another one.” Shout from the mountaintops that you have IMAX and 70mm film projectors that, in literally every technical category, kick the ass of any digital 4K TV screen. Seriously! Use what TV can never have against it.
And Movies, I know you think visual effects are gonna bail you out, but c’mon. Have you seen Game of Thrones? Those guys have visual effects just as good if not better than ninety percent of the stuff you’re putting out. But you know what no TV show has? Scale! And I’m talking real life, genuine scale where you can blow millions of dollars on mind blowing practical effects and you can build massive, colossal sets that your actors can physically touch and interact with. Get off the soundstage and go out into the world. Film in the middle of the ocean or on the side of a freaking mountain! I don’t care! Just do it! TV shows have to make 10 to 22 episodes a season. They can’t afford these kinds of things. But you can! Call up guys like James Cameron, Peter Jackson, Steven Spielberg, Ridley Scott, and Christopher Nolan. These guys know how to make BIG happen. I’m telling you Movies, you can do this. Don’t think you have to be TV to beat TV. Just be you. Because when you, Movies, just become movies again… Man, you’ll be unstoppable.