Theater Owners: 3 Ways to Thrive in the Age of Digital Distribution

With streaming services offering cheaper, easier, and more convenient ways to consume content, movie theaters are struggling to compete for Americans’ entertainment time (and dollar). As a soon to be graduate of Northwestern University with a strong interest in the changing media landscape, I have found two articles highlighting some of the trends in movie distribution and attendance.

The first of these articles, Can Netflix Have It Both Ways With Its Planned Purchase of the Egyptian Theatre?, was written by Matt Donnelly for Variety. As you can guess by the name, the article covers Netflix’s possible acquisition of one of Hollywood’s landmark movie theaters, The Egyptian. As Donnelly explains, this proposed purchase is just one of the latest developments in the streaming giant’s increasingly complicated relationship with the film industry. Just recently, The Academy voted to uphold the ruling that any feature-length film can be considered for an Oscar as long as it has at least a weeklong theatrical run in LA. This ruling operates in favor of Netflix, making it more alluring to A-list filmmakers such as Martin Scorcese who are already drawn to the benefits (among them creative freedom) awarded by the distributor. The possible purchase of the Egyptian Theater is part of Netflix’s plan to have it’s original movies play in theaters across the country at the same time as or soon before they are released on the platform. The problem is, most major movie theater chains like AMC and Regal typically demand a 90 day play period before films become available through streaming platforms or digital video rental. Agreeing to such traditional play periods would defy Netflix’s assertion that “day-and-date releasing is the way of the future.” By refusing to compromise on reduced play periods, theaters could be losing out on high-quality cinema. This refusal would also come as a disappointment to filmmakers such as Scorcese who value the creative flexibility afforded by Netflix but still expect large theatrical releases. It would also disappoint consumers who appreciate the theatrical viewing experience. Whether or not Netflix’s acquisition of the theater ultimately goes through, movie distribution will continue to be disrupted as streamers create higher quality original content.

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The second article, 'Avengers: Endgame' Might Be The Last Movie To Break The Opening Weekend Record (Box Office), written by Forbes senior contributor Scott Mendelson, forecasts the box office successes of major movie franchises. Given seasonal movie attendance records, franchise-best debut box office numbers, and upcoming franchise installments, Mendelson surmises that Avengers: Endgame could mark the end of the modern blockbuster era. He attributes this predicted plateau of box office records to two main causes: many of the large movie franchises are coming to a close in the near future (Avengers, Star Wars), and there is more fragmentation than ever before “in terms of what [movies] people watch and how they watch [them].” The current business model of the movie theater industry is one that relies heavily on blockbuster revenue. If Mendelson is correct in his assertion that the blockbuster boom is coming to an end, the movie theater business could be in big trouble.

Based on my understandings of these articles, knowledge of the entertainment industry, and education at Northwestern University, I have come up with three recommendations for how movie theaters can succeed in this time of change:

• Experience > Convenience - Remind audiences of the immersive movie-going experience exclusive to theaters, an experience that cannot be re-created from your living room couch.
• Capitalize on Limited Releases - Appeal to today’s fragmented market through eventized screenings of films with limited theatrical releases.
• Competition is an Asset - Remember that streamers are fostering a new generation of cinephiles, your best customers.

With these three action items in mind, movie theater owners can thrive in the age of digital distribution.

Kendall Young is a senior at Northwestern University where she studies Radio/Television/Film and Integrated Marketing Communications. She is fiercely passionate about the changing television landscape and is an avid believer in using the power of data and audience analysis to inform creative decisions. In her free time, you can find her listening to true crime podcasts with her dog, Kylie.

Film Marketers: 3 Suggestions to Embrace Online Streaming While Still Making the Money

Film marketers always want to place their products on as many screens as possible, hopefully occupying the most profitable ones to an extended period of time. It is projected that revenues generated from video streaming services such Amazon Price, iTunes, Netflix, YouTube, and Hulu will outpace U.S. movie box office by 2017, according to PwC’s latest Entertainment and Media Outlook. As a graduate student majoring in Integrated Marketing Communications at the Medill School in Northwestern University, I have found two articles that best address the issue, focusing the trend of moving film distribution to online streaming and even mobile devices.

In Time Magazine’s article Forget TV – This Is the Best Streaming Serve for Movies, the author Victor Luckerson (@VLuck) compares HBO, Netflix, Amazon Prime and Hulu Plus in great details. The article ranks them in three categories: recent blockbusters, all-time classics and independent films, by assessing quality rather than quantity. HBO has a clear advantage when it comes to showing recent, popular films, because it has several long-term deals with movie studios for the right to show films during a period of around eight months after a film’s theatrical release when it hits premium cable channels but isn’t yet being played on broadcast TV or basic cable. Netflix is the best service available for all time classics, if we use the American Film Institute’s list as a proxy, while Hulu Plus is also a solid option given its licensing deal to host the enter Criterion Collection. The vastness of Netflix’s library gives it an advantage in the independent films category. The service has almost a third of the 30 highest-grossing independent movies of 2013 and 2014! 

In another article, New Popcorn Time iOS App Aims To Let Users Stream Free Movies On Their Phones from International Business Times, the author Jeff Stone (@JeffStone500) raises another interesting discussion on streaming motion pictures on mobiles devices for free. Popcorn Time has earned the nickname “Netflix for pirates” is trying to makes it possible for users illegally to stream movies on their iPhones or iPads. The open source software is available on multiple sites, which have become popular by employing a simple, clean display interface and a wide selection of Hollywood movies. Along with the copyright infringement, users put themselves at risk of detection by uploading files as they watch, thus making the computer IP address visible. The long time unresolved piracy issue of the movie industry probably poses the greatest threats to marketers at any level. 

After reading these two articles and from my graduate studies in the Northwestern Medill IMC program, I have three action items you should consider if you are about to stream your films online: 

1. Think Streaming – Embrace new digital media platforms, categorize and label your content clearly, and try you best to secure a spot on the front page.  
2. Be Multi-media – Have a strict plan on timing to ensure each media channel mutually benefits from another. A good example of Universal Pictures will be highlighting all previous Fast and Furious movies on streamlining platforms before Fast and Furious 7 is played in cinemas.
3. Find Allies – Rather than staring at monitoring reports and bringing lawsuits repetitively, it is wiser to collaborate with others and figure out some legislative or technological solutions in the long run.

In a word, the outlook of motion picture distribution has inevitable moved to the digital space. If a marketer wants to succeed in the keen competition, understanding the audience is a must that includes knowing their media consumption habits or patterns as well as realizing their desires for inexpensive, even free contents. Adopting and advancing business strategies regarding on line streaming has become a necessity rather than an option for any film marketer.

About the Author

Fiona Xiaomeng Wu (@fionawu418)

Fiona Wu is a M.S. Candidate in Integrated Marketing Communications at the Medill School in Northwestern University. She has lived and worked in Los Angeles with extensive professional experience in digital advertising (Ignited Inc. USA and WPP AGENDA), Public Relations (Imprenta Comm. and ICON Union), and social media marketing (China Lion Film Distribution) before moving to Chicago. She has earned her B.A in Communication at the Annenberg School in University of Southern California. She has also co-founded Flash Frame Entertainment Group since 2011 to help individual filmmakers to pitch corporate investment and to compete in movie festivals.