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Topic: Is Netflix Killing The Movie Theatre Article

Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 01-03-2019 06:32 PM

quote: Justin Hamaker
The other issue we're fighting is that many millennials don't seem to have a problem with consuming media on the 5" screen in their pocket. When this is the case I don't see how a 40' theatre screen or the projector resolution is a deciding factor.

Yeah, generally speaking, I think millennials and members of Generations Y and Z are more likely to be more flexible with how they watch movies. It may not matter as much to them if they're watching a movie on a large cinema screen or streaming it on a tablet or phone. It's one of the reasons why I think such a short release window is pretty hazardous (especially with the narrow difference in audio/video quality between cinema and home).

Baby Boomers and members of Generation X have more attachment to the conventions of seeing movies in theaters. But that loyalty only goes so far. At some point everyone, regardless of age, becomes price conscious. I know plenty of people my age or my parents' age who just don't go to theaters anymore. The value/price ratio of the cinema experience versus the living room experience is one of the issues. Another is just the pain in the ass factor. Deal with crowds at the theater or chill on the couch? Decisions Decisions.

Even though younger adults seem increasingly indifferent about commercial cinemas the movie industry is still directing much of its content toward those younger demographic groups. To be fair, the Star Wars saga and just about all of those super hero movies feature characters that were invented back when I was kid. And some of the people playing those characters are well into middle age. Still, I think the point remains that studios are appealing to a narrow slice of the general public. And there's really no guarantee those younger customers will keep showing up to theaters in great numbers. I think the movie studios need to work harder at reaching older customers.

Another problem is a lot of people in younger generation groups are struggling financially. The nation's student loan debt bubble is scary high. Housing costs are eating too much of their income. To me it seems like adults in 35-and-up age groups have more financial cushion to afford eating out and trips to the theater.

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James Wyrembelski
Expert Film Handler

Posts: 114
From: Beaverton, MI, USA
Registered: Sep 2015

posted 01-03-2019 06:48 PM

quote: Bobby Henderson
Another problem is a lot of people in younger generation groups are struggling financially. The nation's student loan debt bubble is scary high. Housing costs are eating too much of their income. To me it seems like adults in 35-and-up age groups have more financial cushion to afford eating out and trips to the theater.

This.

We are 30 & 33. We do not eat out, have cable, or do very many activities outside of the house. Most of our time is spent working. Between the two of us we have 3-4 jobs depending on the season, have limited expenditures, and barely see savings. We definitely save, but not as much as it should be. We still go out, but its very limited, and with so many cheaper options available in home we just go that route instead. Or, we use that money to maybe take a week or two vacation instead.

It's not all doom and gloom. But, after 2008-2009, we for sure learned to tighten it up and avoid any debt as much as possible.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 01-05-2019 12:33 AM

quote: Bobby Henderson
Here's the problem: 20-30 years ago film-based cinemas benefited from a giant quality gap over what one could see on TV at home. It was no contest. Watching a movie like Die Hard on 35mm in a mediocre movie theater was still better than watching the same movie playing from VHS tape on a square-ish TV. Today that giant quality gap between cinema and home viewing is all but gone.

The one thing we have, that no home system will ever have unless you live in a mansion, is the BIGNESS of the theater experience. My screen here is a relatively small (for a theater) 30 feet wide, but that's still about 8 times wider than the biggest TV screens at home. If you sit halfway down our auditorium the picture is field-of-vision big.

Our sound system has six amplifiers and about 40 drivers in 17 speakers and is set to a comfortable listening level. There are thousands of theaters with bigger systems than what we have. A lot of home viewers, though, are watching a 50" screen with a "theater in a box" sound system with two 3" surrounds and a 6" subwoofer, which may or may not be turned down low so as not to disturb the baby sleeping.

The exhibition industry offers two main things that you can NEVER duplicate at home:

- The size of it all

- Getting out of the damn house

These are the two things the industry should be touting. Instead of a bunch of alphabet soup gobbledy-gook brand-names of "systems" that nobody really cares about.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 01-05-2019 02:14 PM

quote: Mike Blakesley
The one thing we have, that no home system will ever have unless you live in a mansion, is the BIGNESS of the theater experience. My screen here is a relatively small (for a theater) 30 feet wide, but that's still about 8 times wider than the biggest TV screens at home. If you sit halfway down our auditorium the picture is field-of-vision big.

Again, this is another factor where 30 years ago the difference gap between the cinema and home was far greater. During the first 15 years of the home video boom the best consumers could get was SD quality video with stereo sound. Even back then someone could blow over $5000 on a projection screen TV, but the resuting picture was a bunch of fuzzy, washed-out looking crap. From the mid 1990's on to today there has been a great deal of incremental improvements to make the home theater experience pretty damn impressive.

Yeah, a movie theater screen is certainly larger than any home TV screen in terms of total scale. But the ratio of viewing distance and size of the screen has its own effect. I have a 65" TV in my living room and my viewing distance is about 7 feet. That fills my field of vision every bit as good as any standard movie theater screen. New TV screens are pretty impressive and becoming more affordable.

quote: Mike Blakesley
The exhibition industry offers two main things that you can NEVER duplicate at home:

- The size of it all

- Getting out of the damn house

If the theater is really doing to sell size and scale as a bullet point for attracting people to the theater they have to build rooms and screens to back up that sales point. When I entered a movie theater like the GCC Northpark #1 THX house in Dallas I couldn't help but react with "wow." That was a BIG and damn impressive theater. That theater and many others like it are gone. Theater chains don't build any new theaters with 1000+ seat auditoriums.

I've been in a lot of movie theater auditoriums that were not impressive at all. Low seating counts, modest screens and weak-ass sound with the volume turned way down because some fart complained about it once and management kept the fader down to nothing to stop all the complaints. This is a common situation in many multiplex operations. We have only one screen in my town that I consider impressive in terms of size, and you have to pay $3-$6 on top of the normal ticket price to see a movie in that room. It's also the only auditorium where they have the volume turned up enough for the sound to be dynamic at all. I miss the 1990's when movie theaters had a lot more "oomph" in their sound systems, back when things like THX were still a thing.

Getting back to what Justin said on the previous page, does the average customer even care about the difference between the size of a cinema screen versus a big TV screen at home? We have people satisfied with watching movies on a freaking phone, or watching a bootleg video of a theater screen on their computer screen.

The "getting out of the damn house" angle is another complication. There is a significant group of the public who can't afford to get out of the damn house because they're broke from all sorts of other things eating all their income. Then there's others who might have to money to get out on the town, but they don't want to do any of that. They want to cocoon themselves up in their home. Parts of our society are becoming increasingly introverted. We have absurd trends like home grocery delivery. 2018 was a serious down year for the restaurant industry, so chains like Starbucks and McDonalds are looking at home delivery as an option to win back customers.

I know it sounds like I'm arguing just to argue. I just think we're in some pretty strange times now. I don't want commercial movie theaters to go away (in part because I think it would kill off much of the movie business as we know it). I just don't agree with any notions that things are hunky-dory and movie theaters will always be around. Nothing can be taken for granted.

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Mike Blakesley
Film God

Posts: 12767
From: Forsyth, Montana
Registered: Jun 99

posted 01-05-2019 10:57 PM

quote: Bobby Henderson
Yeah, a movie theater screen is certainly larger than any home TV screen in terms of total scale. But the ratio of viewing distance and size of the screen has its own effect. I have a 65" TV in my living room and my viewing distance is about 7 feet. That fills my field of vision every bit as good as any standard movie theater screen.

That's still not the same as sitting in a really big room with a really big screen. I think exhibition companies are trying to impress more with their newer builds.

If you're seeing movies in dinky rooms maybe you're just waiting to long to see movies. Theater companies can't just stop using auditoriums because they're "not big enough." They have to wait until their useful life is over. The industry operates on a slim enough profit margin as it is.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 01-06-2019 12:05 AM

I rarely wait until the tail end of a movie's theatrical run to watch the movie. It's just that there's a lot of multiplex locations aren't exactly "palacial."

Yeah, some companies are trying to impress with new builds. But far too often the houses with the big screens and decent sound have some premium priced acronym label applied to them. The remainder of auditoriums are pretty ho-hum.

One of the problems with dinky auditoriums dates back to the 1990's when the number of screens in a location was a selling point. One example is a weekend trip to Dallas in the late 1990's; we watched Amistad at the AMC Grapevine Mills 30. The room where we watched the movie couldn't have had more than maybe 60 or 70 seats in it, tops. This is a theater in a giant-size mall in the DFW metro, not a multiplex in some 10,000 person town. It's like AMC built a 30-plex into the footprint of a standard 12-plex site. I refuse to see movies at the local 12-plex in the mall because it suffers from the same thing.

Maybe what needs to happen is the big chains need to build sites with fewer screens and make those screens better.

At the same time, it's hard not to be impressed with the latest UHDTV sets even if there's not a lot of native 4K content to show on them. My father has a 65" Sony OLED UHDTV screen. The image quality on that is pretty outstanding. I do not mind watching a movie for the first time on a screen like that at all.

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Martin Brooks
Jedi Master Film Handler

Posts: 900
From: Forest Hills, NY, USA
Registered: May 2002

posted 01-18-2019 01:48 PM

The problem is that theater owners are moving towards far smaller auditoriums and as Bobby has said, this results in less of a differentiation between the home experience and the theater experience.

I understand why theater owners feel there's no problem ripping out the seats and putting in lounge seating: AMC, the largest theater chain, has average sales of only 92 tickers PER DAY, per screen.

While some people abhor crowds, seeing a film, especially a popcorn film or a comedy with just a few other people in the theater completely changes the experience. This was brought home to me before 2005, when I was consulting for a company that evaluated presentation quality. If a film was playing in a multiplex on multiple screens, I had to see the film on every screen. And I discovered that it was a different experience in each auditorium and the audience reacted differently to the film, depending upon the atmosphere of the auditorium and the quality of the presentation (and the audience itself - even jokes played differently).

There was something vastly different seeing Star Wars or Close Encounters or Lawrence of Arabia with 1000+ other people and seeing a film like that today with maybe 100. When I was a kid, the small neighborhood theater that didn't get the big films had 600 seats.

Several new theaters have opened in NYC recently. While most are art houses that aren't playing the big blockbusters, I think these theaters are doing just the opposite of what they should be doing: they're making the experience "small". The iPic Fulton Street, which opened in late 2016, has 8 screens with a total of 508 seats ranging from 43 to 138 per screen. The Metrograph has two screens of 175 and 50. The East 62nd Street 6 opened a few weeks ago with 6 screens totaling just 312 seats with the smallest theater having just 43 seats. Landmark opened an 8-screen theatre on 57th St to replace the closed Sunshine that has 558 seats over 8 screens, with the smallest having just 19 seats. Is this how people want to see movies? The other problem in such auditoriums is that there's only a few ideal seats.

And the older larger theaters have reduced seat counts when installing lounge seating. The Regal E-Walk once had 3276 seats. Now it has 1344, although I suppose the screen sizes haven't changed.

Obviously I can't speak for everyone, but it's killing the theater experience for me. And the problem with it from an economic standpoint is that every time a theater sells out a show because there aren't enough seats, they're leaving money on the table. I don't understand how his makes business sense.

Personally, I think the chains, in the cases where they have multiple theater buildings in the same city, should reduce the number of screens in each facility, enlarge the theaters to have giant screens (and sound) and be willing to play different films at different chain locations. Why do they feel that every theater has to play exactly the same films? In NYC, a lot of IMAX or Dolby Vision films never play in those formats because every theater with those types of auditoriums are playing exactly the same film. People are willing to travel a bit to get to a movie that they want to see.

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Mark Ogden
Jedi Master Film Handler

Posts: 943
From: Little Falls, N.J.
Registered: Jun 99

posted 01-18-2019 03:32 PM

We can discuss presentation and screen and auditorium size vs. home theater until we are blue in the face BUT: right now, everybody who I talk to about visual media is talking almost exclusively about Birdbox, Roma, Black Mirror: Bandersnatch, The Ballad of Buster Scruggs, Tidying Up, Stranger Things, Ozark, The Haunting of Hill House, The Last Laugh and on and on . . . all Netflix content, except all the gals are talking about The Marvelous Mrs. Maisel on Amazon.

On any given evening I can find therein an entire multiplex worth of entertainment, most of it pretty damn watchable. I don't think Netflix will kill theaters, but if they put a big damn dent in them it will be because have they have things people actually want to see and talk to each other about, and the fact that they saw it on their 46" Samsung instead of in an overpriced faux-leather recliner looking at a movie screen is meaningless.

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Justin Hamaker
Film God

Posts: 2253
From: Lakeport, CA USA
Registered: Jan 2004

posted 01-18-2019 04:38 PM

Another point on this issue is Netflix is hurting the theatre business by harming the perception of a movie theatre being the place to first see the newest movies. They could have done a great service to the industry by releasing Birdbox to theatres, while also potentially helping their debt situation.

What will be interesting to watch is what happens as Netflix begins to lose content as studios migrate to their own platforms, especially Disney. With Netflix raising rates again it changes the calculation about whether they are worth the money given a lack of premium content and a price approaching 2 movie tickets.

It is also going to be interesting to see how the mounting debt will be an issue for a company with no additional revenue streams. In fact, I'm kind of surprised investors haven't made more of a push to have more theatrical releases.

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Martin Brooks
Jedi Master Film Handler

Posts: 900
From: Forest Hills, NY, USA
Registered: May 2002

posted 02-14-2019 09:26 PM

quote: Mark Ogden
BUT: right now, everybody who I talk to about visual media is talking almost exclusively about Birdbox, Roma, Black Mirror: Bandersnatch, The Ballad of Buster Scruggs, Tidying Up, Stranger Things, Ozark, The Haunting of Hill House, The Last Laugh and on and on . . . all Netflix content, except all the gals are talking about The Marvelous Mrs. Maisel on Amazon.

Roma is perhaps an exception, but I don't perceive those other programs as movies - I perceive them as TV shows. The other issue is that streaming shows that people are interested in aren't all on one service. It would take a subscription to 4-5 services to get everything that's "hot" and most people aren't willing to do that. And that's only going to get worse as Disney, AT&T and Apple launch their own streaming services in addition to the ones that already exist.

I can't see them all surviving, but I never believed that hundreds of cable channels could all survive either.

I posted an earlier response in this thread, but I don't think Netflix itself is killing movie theaters, but the studios are and they're doing so by the ridiculously short windows that the theaters have. The theater chains were nuts to let that happen and they could have easily stopped it: they could have simply refused to play any film from a studio that shortened the window to X months. The theatrical window used to be a year and even after that, it didn't go to home video - it went to HBO and then to network TV and then to home video and other outlets.

As far as I'm concerned, the studios are on a path to a slow suicide, but they never look at the long term and they want to release in every medium at once because it reduces costs and improves cash flow. But IMO, it destroys their business over time.

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Bobby Henderson
"Ask me about Trajan."

Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001

posted 02-14-2019 10:05 PM

I think another important point to consider in movie distributor behavior is the actual "shelf life" of the executives calling the shots. How many of these guys are spending most or all of their adult, professional life working for a particular movie distributor? Just like so many other big corporations a bunch of these studio heads come and go every few years. I don't think any of them are helming a major studio for 20 or more years.

What do you get with executives who have short term stints running the company? You get short term schemes designed to make as much money as possible up front. There's no regard for what consequence may be involved 5, 10 or 20 years later. That honcho is going to make as much money for himself up front. And he's not likely to give a damn about the kind of "legacy" he might leave behind for that studio and its brand.

I think short term, personal gain is the driving force behind these studio heads being hell-bent on shrinking theatrical release windows and trying all sorts of other stunts to speed up the cash-flow situation.

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