Top Theater Group Dismisses Sean Parker's $50 Home Movie Service

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John Fithian, National Association of Theater Owners

"The exclusive theatrical release window makes new movies events," says the National Association of Theatre Owners, adding that top filmmakers like J.J. Abrams who say the plan is beneficial to cinema operators should leave it to exhibitors to decide what's best for their business.

The National Association of Theatre Owners has dismissed a controversial proposal to make new movies available in the home for $50 on the same day they hit theaters via an encrypted set-top box costing $150, saying shortening theatrical windows should not be determined by a "third party" and that top filmmakers supporting the plan like J.J. Abrams and Peter Jackson should leave it to theater owners to determine what's best for their business.

"The owners and operators of movie theaters genuinely appreciate the vision and creativity brought to the big screen by motion picture directors. Nothing entertains movie fans better than a great movie exhibited in a modern movie cinema," NATO said Wednesday in a statement.

"The exclusive theatrical release window makes new movies events. Success there establishes brand value and bolsters revenue in downstream markets," the statement continued. "More sophisticated window modeling may be needed for the growing success of a modern movie industry. Those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party."

Sean Parker  — the co-founder of Napster who later played a key role in Facebook's rise — and Prem Akkaraju are pitching the service via their new company, the Screening Room, and need the support of theater owners if a majority of Hollywood studios are to license their content.  Parker and Akkaraju, who say their intention is to capture consumers who don't go the movies, are trying to sweeten the pot by proposing to share revenue with theater owners. 

But they face an uphill battle; so far, AMC Entertainment is the only circuit considering doing business with the Screening Room, according to insiders. The country's two other largest chains, Regal Entertainment and Cinemark, are said to have no interest in the scheme.

News of the Screening Room emerged last week, along with word that it has amassed a powerful cadre of top filmmakers and producers to serve on its advisory board, including J.J. Abrams and Peter Jackson, who in 2011 famously opposed an attempt to make films available on DirecTV for $29.99 60 days after their release in theaters. Jackson and Abrams say the revenue-sharing plan make the Screening Room beneficial for theater owners.

"Recently there have been various reports in the media regarding a proposed movie release model called 'The Screening Room.' Within a few days of the first report, several different high profile movie directors publicly stated their support for the model, some claiming that the model is good for motion picture exhibitors. Movie theater operators, however, will individually decide what business models work for movie theater operators," the NATO statement said.

NATO's statement came a day after the Art House Convergence — representing 600 cinema owners — said the proposed model is "incongruous with the movie exhibition sector by devaluing the in-theater experience and enabling increased piracy. Furthermore, we seriously question the economics of the proposed revenue-sharing model."

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