Netflix Vs. Movie Theaters

Netflix Vs. Movie Theaters
Profile photo of Logan Albright

netflixtheaterNetflix is looking to take on movie theaters.

The traditional model of film releases and distribution, to which we have all become accustomed over the last hundred years, is overdue for an update. Throughout our lives, we have unquestionably accepted the fact that when a movie is released, we have to see it in a physical theater first, only being allowed to purchase or rent the film for home viewing after a protracted waiting period. We took this for granted, and although we may have grumbled about long wait times or the increasingly unaffordable prices charged by theaters, we never seriously considered the possibility that the model itself could be changed. Now Netflix, already a bastion of innovation in the way we experience entertainment, may make that change with a desire to offer streaming video of new movies the same day as they are released in theaters.

Understandably, theater owners are furious at the mere suggestion. They have long enjoyed their temporary monopoly on new films, where consumers were forced to pay extortionate rates for popcorn, while at the same time enduring sticky floors, uncomfortable seats and the unrestrained rudeness of fellow customers who would apparently rather monitor their Twitter feeds on their blazingly bright Smartphones than actually watch the movie they paid to see.

In a desperate effort to protect their broken industry, theater owners are making the unsubstantiated claim that allowing consumers to watch movies in the comfort of their own homes will somehow destroy the market for movies themselves. It seems an odd argument to say that we have to prevent people from being able to buy the products they want, in order to protect those very products. People still like watching movies. They will still be willing to pay for movies. The only difference is that consumers will now have increased choices on how they want to spend their money.

The change might actually be more profitable for film studios, as one of the major costs they face is the distribution of physical film canisters to thousands of theaters all around the world. Combined with the advertising required to get viewers to actually get up off their couches and travel to one of the limited physical locations where their film is showing, the cost savings in streaming as an alternative distribution method could be substantial.

This situation is no different than any other interest trying to protect its own market power at the expense of the consumer. The fewer ways viewers have to access films, the more theaters can charge for the privilege. Just as the luddites railed against automatic looms and the recording industry bust an overly litigious gasket over the advent of file sharing software, these once-mighty theater dinosaurs are frantically trying to prevent their foreseeable, but inevitable, extinction.

Netflix, Hulu and Amazon are changing the way we watch TV, and soon they’ll be changing the way we watch movies. If brick and mortar theaters want to survive, they will have to offer something more than just an external viewing location. They will have to give us a reason to get off the couch. From a personal standpoint, I hope they do. There is a certain pleasure in sharing the exciting experience of a new film with a room full of strangers in the dark. I hope that experience will not be lost. But over the last couple of decades, theaters have gotten lazy, and they no longer seem to care about selling the experience of moviegoing. If that doesn’t change, I will shed no tears at the demise of the industry in favor of more innovative, consumer-conscious businesses.

  • khaleesi

    I love the experience of going to the movie theater to see big tent pole releases. If It's not a huge release I can wait and watch later. Netflix is changing the way we watch things because to myself personally… I get more enjoyment out of binge watching the show like Sons of Anarchy then I do going to the theater. Great TV is taking over!!!

  • SonicJohan

    You have obviously had a bad cinema experience, lots of people quite like cinemas for watching movies, even with the exposure to other people… That being said, ofcourse it should be a choice. But distribution is not really a problem re expenses, modern cinemas can download new films from the distributors digitally these days.

  • Anand Venigalla

    Speaking of movie theaters, I will confess to you that apart from the occasional movie theater experience I have, I don't really go to theaters (but then again I don't see many new movies). And as to how theaters can attract audiences, they can probably consider the resurrection of 70mm and some of the classic groundbreakers of movie formats; they might possibly consider higher standards in their theaters in terms of cleanliness and food and ticket prices.

    There are more suggestions I could give, but these are my best suggestions so far.

Profile photo of Logan Albright

Logan Albright is a writer and economist in Washington, DC.

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