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Netflix CEO: Movie Theaters Are 'Strangling the Movie Business'' (businessinsider.com)

Posted by msmash on from the movie-industry dept.

Netflix CEO Reed Hastings thinks the state of film is a "real tragedy" and that movie theaters are "strangling the movie business," he said at The New Yorker's Tech Fest on Friday. From a Business Insider report:On Friday, Hastings came down hard on these theater owners, saying there had been no innovation in the movie theater business in recent years, even as TV has been shaped by the rise of cable and internet networks. "Money" and "innovation" has flooded to the TV industry, Hastings said. Not so with film. The movie theater business has seen flatline revenue, Hastings said. Part of the problem is that small movies, such as many Netflix has snagged from places like Sundance, would be better distributed both at home and in theaters. That's a convenient position for Netflix to take, but Hastings said the movie studios feel the same way. Each movie studio would like to "break the oligopoly" of the theaters, but "they don't know how," he continued. If they collude to face the theaters, it's anti-trust, but if they are the ones to take the first step, their films will get killed. That means they just go along with the status quo.

6 of 342 comments (clear)

  1. Might as well break the ice by chispito · · Score: 5, Insightful

    This being Slashdot, many of you don't want to go to theaters and see films. You want to view them at home, from your HTPC where you won't be bothered by other people, people you consider dumb, rude, loud, too young, always on their phones and generally needing to get off your lawn.

    I remember this last time movie theaters came up. I was in the minority because I do consider going to the movies to be a social experience, especially when when seeing a suspenseful or funny movie.

    --
    The Daddy casts sleep on the Baby. The Baby resists!
  2. A biased opinion by foxalopex · · Score: 5, Insightful

    My understanding from how movie theatres work is that they barely make any money at all from the showing of movies. It is the production studios that take the greatest amount of profits from the movies shown at the theatre. Where theatre's make money is primarily from the extremely unhealthy food folks buy at the theatre. It's why we hear so much about movies from producers that flop because that represents a huge loss. Theatres are not so worried so long as folks still go to the theatre to see movies.

    Gas stations use a similar model where most of their actual profits are from non-gas sales. They behave very much like a corner store. The gas that's sold isn't very profitable otherwise.

    1. Re:A biased opinion by Anonymous Coward · · Score: 5, Informative

      This is a common misunderstanding. Movie theatres make plenty of money from showing movies. It is true that the vast majority (~90%) of revenue from brand new films (typically a film is a 'special engagement' from release through the end of its second weekend) goes back to the studio. However, the studio's take drops rapidly after that point, eventually tilting in the theatre's favor. A large chain with a good film buyer and strategies in place to ensure movies perform as well as possible during an extended run can get their overall 'film rent' below 60%. But, even at 90%, the theatre's box office take isn't "barely any money." The nice thing about tickets is that everyone pays for them, while many customers don't visit the concession stand. When I ran a movie theatre, our average ticket price (which factors in free passes, discounted tickets, matinees, child tickets, etc.) was about $7.50. Our net concession per capita was about $2.40. 75 cents may pale in comparison to $2.40, but it is definitely significant...and this is absolutely the worst case scenario.

  3. Re:Movie theaters by Opportunist · · Score: 5, Insightful

    Movie theaters had their reason to exist when they offered an added value over what you could have at home. That ceased to exist. Big screen? Have it. Dolby 7.1? Have it. 3D? Glad I don't have it. What else is there?

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
  4. Re:Movie theaters by jedidiah · · Score: 5, Informative

    > People with AR-15's spraying bullets up and down the aisles?

    You're more likely to get hit by lightning while spontaneously getting 3 different rare diseases.

    --
    A Pirate and a Puritan look the same on a balance sheet.
  5. Re:Movie theaters by harperska · · Score: 5, Insightful

    Not all shootings are equal. The probability of being killed in a terroristic mass shooting in particular is very low, despite the media's obsession with covering that particular type of shooting.