Despite Netflix's groundbreaking idea, same-day theatre-OTT releases still meet resistance

When Netflix content guru Ted Sarandos first proposed the strategy to release films in theaters and on its SVOD service on the same day, theater owners went into a minor uproar. That attitude hasn't appeared to soften in the face of a proposed new transactional service, Screening Room, which would let viewers pay $50 to watch a movie at home the same day it's released in theaters.

Users also have to purchase a $150 set-top box in order to stream the movies.

Sean Parker, who co-founded Napster, is developing the service along with partner Prem Akkaraju. He's got the backing of several Hollywood luminaries including Steven Spielberg, Martin Scorsese and J.J. Abrams, according to DSL Reports, but has also raised the hackles of theater owners.

For instance, specialty cinema organization The Art House Convergence, which represents about 600 theaters, released a letter saying it "strongly opposes" Screening Room as it could devalue "the in-theater experience."

Netflix faced similar opposition from theater owners in 2014 when it first announced that it would simultaneously release a sequel to Crouching Tiger, Hidden Dragon in IMAX theaters and on its streaming service.

Interestingly, The Art House Convergence said that the day-and-date release is not at issue, since many of the films its member theaters show are already on-demand or available for purchase. Rather, it cited a threat to the industry as a whole. "We strongly believe if the studios, distributors, and major chains adopt this model, we will see a wildfire spread of pirated content, and consequently, a decline in overall film profitability through the cannibalization of theatrical revenue," the organization said in its letter.

The stance seems to be contradicted by at least one study on content piracy. In 2015, an Irdeto report argued that tightening release windows between a movie's theatrical release date and its VOD release date could stem piracy.

"What we're advocating is a collapsing of the release windows to ensure that people can legitimately acquire the content when the publicity is generated," said Irdeto's Rory O'Connor last year. "The natural reaction of people is when they read about something they want to watch it … most folks will pay a reasonable price if there's a legitimate alternative. What we're seeing is they're reaching for an illegitimate alternative and downloading movies via torrent sites."

Another top SVOD provider, Amazon, has been exploring the idea of narrowing release windows on its own films produced at Amazon Original Movies. And in late 2014, Sony Pictures decided on a same day-and-date release for The Interview after a security breach resulted in digital files of the movie circulating online ahead of its theatrical release date.

For more:
- see this DSL Reports article
- see this open letter

Related articles:
Closing movie release windows will slow piracy, boost revenue for Oscar-nominated films, Irdeto says
Double whammy: Sony to release 'The Interview' on YouTube, other VOD outlets as well as in theaters
Online video piracy: Ways the industry could address the growing problem
Netflix to distribute 'Crouching Tiger' sequel day-and-date with global IMAX release

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