retail news in context, analysis with attitude

by Kevin Coupe

Variety had an interesting piece the other day about Netflix CEO Reed Hastings, who continues to push for a change in traditional movie distribution models - essentially arguing that the industry has to accept the notion that at least some movies ought to be available in theaters and for home video at the same time.

Theater owners have pushed back against this argument, saying that it would pretty much destroy their business. Variety writes that "Netflix has come under fire from major theater chains as well as organizations like the National Association of Theatre Owners for not sticking to the traditional release window model, which lets movies debut in theaters months before they transition to home video."

However, there are cracks in the facade of opposition, since Netflix has made a deal "with iPic Entertainment, a small chain with 15 theaters. Under that deal, iPic will show 10 Netflix movies day-and-date with their online releases. This won’t give Netflix movies a huge theater audience, but the deal does allow the company to qualify its titles for the Academy Awards."

The Netflix argument is that simultaneous releases actually will good for the movie business, expanding rather than contracting audiences; Hastings says that this is what has happened in the TV business, where a plethora of platforms - broadcast, cable and streaming - actually has turned television into a creative hub seen as far more friendly to artists than film.

I agree with Hastings on this - but only to a point. The big-budget tentpole movies that studios tend to spend the most time, money and attention on probably are never going to get simultaneous release, and that's okay. But there are a ton of movies out there - small, low budget films that struggle to get attention - might actually benefit from multiple simultaneous platforms.

But one thing that Hastings said to Variety annoyed me a bit - when he suggested that the only things that has changed about movie distribution business in the last 30 years is that "the popcorn tastes better, but that’s about it."

That sounds like hubris to me.

The fact is that movie theaters have changed a lot. Many theaters offer IMAX and 3D screens, there have been improvements in the comfort of the seats to the quality of the food, and some even offer alcohol and assigned seating. And while some would say that movies have gotten expensive, I think that's unfair - a couple of hours entertainment for $12 per ticket, if the movie is good, is a deal. (I bring my own Twizzlers, since movie candy remains way too expensive.)

Have they changed enough? Probably not. There is resistance to simultaneous releases, just as there almost always is in any industry to the disruption of traditional business models.

But the debate is an Eye-Opener. And one with echoes in a lot of other businesses, especially retailing.
KC's View: