Theme parks and movie theaters long have ranked among American's most popular entertainment destinations. So it's no surprise that both industries are struggling during this Covid-19 pandemic, when millions of Americans are staying safer at home. But while theme parks are looking forward welcoming back fans in the post-vaccine future, many theater operators are not feeling so optimistic.
Warner Bros. announced yesterday that it will release its entire 2021 slate of movies on its HBO Max streaming service on the same dates that they debut in theaters. Many studios have been releasing films to video on demand and streaming services since the pandemic began, as a way to recoup some income from productions while theaters remain closed or severely capacity restricted across the country. But Warner Bros.' announcement represents the biggest shift to streaming yet, and one that might continue past when theaters are cleared to reopen.
Theater owners fear that studios will sacrifice the exclusive theatrical window to encourage viewers to subscribe to the studios' streaming services, such as HBO Max, Disney+, and NBCUniversal's Peacock. Theaters had been protected from studios by United States v. Paramount Pictures, Inc., a 1948 Supreme Court case that prohibited studios from owning theaters. But streaming services blow an enormous loophole in that wall protecting studios from controlling both the production and distribution of movies.
And the pandemic has given studios an excuse to run through that hole.
So what can theater operators do to remain in business when fans can watch the same films at home? Here's where the theme park business offers some valuable guidance.
First, forget about competing on price. Theaters will have no future if they try to slash ticket prices to undercut the cost of streaming services, most of which offer a month of unlimited viewing for the same price of a movie ticket in LA. But theaters don't need to try that. Learn from the Disney and Universal theme parks, which never compete on price.
Sure, those parks might offer deals from time to time, especially when they are trying to push visitors into hotel packages or longer multi-day tickets. But they never worry about what SeaWorld, Six Flags, or a Cedar Fair park are charging for a day's visit. Disney and Universal dominate the U.S. theme park business because they offer a superior experience.
That's the path forward for the movie theater business. The pandemic does not have become an extinction moment for the movie theater business. But if it culls a bunch of crappy theaters, I don't think many movie fans would mourn their loss. Here are several ways that movie theaters can provide a superior experience to in-home streaming, even with higher prices and the hassles of leaving home to watch.
Many viewers have pretty nice television sets these days, but few have excellent in-home speaker systems. My filmmaker son hooked up a new multi-speaker system to our family TV during our early-epidemic MCU watch marathon, and we loved the upgrade. But he really made the point a couple of days later, when he unplugged the speaker connection so that we went back to hearing the sound from just the TV's speakers. Yuck.
But don't forget the projection
Sound system upgrades offer theaters their clearest advantage over home viewing for a superior media experience, but theaters should not neglect their projection systems. I know that no one can afford to spend money on capital, but now is the best time to upgrade projection and lighting systems to be prepared to blow away in-home viewing when the pandemic ends.
Rip out all the bad seats
I'm not just talking about replacing old, broken, or lopsided theater seats. Theaters need to remove those seats too close to the screen or too far to the sides, where you're straining your neck to watch. Yes, that reduces capacity, but lower capacity allows you to maintain higher ticket prices. And theaters can make up the revenue on...
Alamo Drafthouse is the future. Okay, to be fair, Orlando movie fans saw this future years ago at the Enzian. Popcorn's great, but full meal and bar service provides theaters more tools to pry fans from their living room couches.
No more commercials
I probably won't have to sit through 15 minutes of commercials before watching up Pixar's Soul on Disney+. Theaters that continue to assault viewers with commercials during the streaming era are just hurting themselves.
That said, great pre- and post-shows can elevate the theater experience. I love what Arclight does with its Arclight Stories series. Theater chains can distinguish their experience with behind-the-scenes video, short films, music videos and other content that plays while people are ordering their food and drinks before the feature.
Warm up the audience
Theater's top selling point against home viewing remains moments such as this:
Nothing beats the energy of an opening-night crowd watching a great movie. No one wants to hear audience members talking to each other, but the sound of audiences reacting to the action on screen will be what makes watching a movie in the theater most unique from watching at home. Theaters need to lean into that. Put an employee in front of the audience — in that empty space formerly occupied by bad seats — and have them introduce the film and warm up the crowd. Theme parks have been using employees to warm up crowds before shows for years, and all theaters ought to join chains such as Arclight in adopting the practice.
Ultimately, successful movie theaters are not just selling the opportunity to watch a film. They are selling the opportunity to connect with other people in watching that film. Theater owners and operators need to remember that if they want any chance to prosper when their theaters can operate at full capacity again.
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