The War Begins: Netflix v. Theaters

The War Begins: Netflix v. Theaters

     Since I could remember movies were enjoyed on the big screen in a movie theater or a drive-in. Drive In's have all but disappeared and the decline of movie theaters is in it's beginning days, citing a CBS article published in 2014 "Last year the number of frequent movie-goers in the crucial 18- to 24-year-old age group plummeted 17 percent. Among 12- to 17-year-olds, admissions were down almost 13 percent." However in the long run revenues are up because of increased ticket prices. While this will offset the decreased traffic it won't fix the issue that people no longer want to see a movie when they can watch it from the comfort of their home. This is especially true today with streaming entertainment sources like Netflix, Hulu, and Amazon coming out with original content that is actually pleasing and many times award winning. This track record will soon follow into their ventures into major motion pictures. 
     
     The war has started with Netflix's announcement that they would simultaneously air a sequel to "Crouching Tiger Hidden Dragon" online and in theaters. It has now spilled over to their newest movie "Beasts of No Nation" both being rejected for screening at big time movie theaters such as AMC, Cinemark, and Carmike. In a related note Netflix has penned a deal with Leonardo Dicaprio to begin producing documentaries for their streaming service. While he is not starring in films the association will only give Netflix more validity within the "Hollywood" community. 

     What does this mean for Netflix? Bottom line up front, big movie theater chains are scared and legitimizing Netflix through this dismissal of Netflix produced movies. Any media coverage created through this will only push more sales towards Netflix (as long as it isn't centered on content quality). Netflix only stands to gain more via any sort of negotiation from here on out. If theaters allow the release then Netflix will not only garner a profit from ticket sales but will more than likely attract more subscribers via viewers of the movie enjoying the content. 

     What does this mean for theaters? Bottom line up front, theaters will lose this battle because any plan of attack will lead to a loss of revenue. If theaters shun the movie then they are missing out on ticket and concession sales. If theaters decide to allow the movie to release in their establishments then they will reap some benefits from ticket and concession sales but will lose some because of people staying home for their viewing experience. 

     My prediction is that this war will end with Netflix out on top but big theaters will not give up without a fight. Netflix and all streaming content providers will stand to win from this outcome of the war. What I see in the future for not only Netflix but all streaming companies is a pay per view style of viewing for "premium" content on their sites. Subscribers would be billed normal monthly payments but if they want to watch the providers original content then they would have to pay a fee to see it sooner than everyone else. Eventually at a predetermined amount of time (just like movie theaters) the content would be released to all subscribers for no additional charge. 

     Final outcome is that movie theaters are then turned into a novelty as drive ins were. While I don't think this will happen anytime soon consumers will only pay a certain amount for that "movie theater" experience. When that threshold is reached they will lose and Netflix will win.