MGMs move fits this editorial........
upside.com
The Big Screen's Web Shakeup
January 19, 2000
by Aaron Goldberg
It's no secret that the Web is a force for "creative destruction," the likes of which we've never seen before.
The Internet's impact has been obvious on retailing, auctions and, to a lesser extent, television. The next industry due for a shakeup is the movie business. The first and most obvious change will be in distribution.
Today, if you want to see a new movie in the big city, you have little choice but to go down to your local megaplex, spend $8 for a ticket, $6 for an overly salty bag of popcorn and $4 for a soda to wash down all that sodium. Then there's waiting in line for tickets, the mad dash for the non-neck-straining seats and dealing with teenagers who pick the climax of the film to loudly discuss their boyfriends.
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Rather than going to the local megaplex, you pay $29.95 to watch a movie at home via the Web.
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All the comforts of home. In a couple of years, we won't have to put up with this crap. Thanks to the Web, some families will opt for viewing that brand-new release on their home theater system. Yes, there will need to be Web-to-TV links for that to happen, but WebTV is cheap and other new TV technologies are PC- and Web-friendly.
So imagine that when the studio releases Austin Powers 3 - Only Six More Sequels Until We Meet the Police Academy Quota, rather than going to the local megaplex, you pop your own popcorn and pay $29.95 to watch it at home via the Web on your monster-screen TV.
You don't have to wait outside during January in Maine, you can pause the movie during bathroom breaks and you don't need a baby-sitter. That's the upside for consumers. For the movie studios, the upside is huge. They'll get $28 of the $29.95, and they'll sell their own ads or trailers customized to your household. Which means lots more money for them.
Some may say I'm nuts and that the studios won't jeopardize their all-important relationships with theater chains, and that not everyone will have home theaters. But consider some facts that play into this scenario.
? Don't think Hollywood hasn't noticed the runaway success of MP3. Do you think it's dumb enough to end up in the same position as the record industry by ignoring the Web and then trying to react to it? Hollywood wants to play the Web instead of vice versa.
? Based on the InfoBeads Technology User Profile, more than 650,000 homes have a WebTV-type product, 2-plus million have a set-top box, more than 3 million have DVD/home theatre and more than 35 million are online. The base is there for a huge industry shift.
? Pay-per-view events are already working today at $30 to $50 a pop. Boxing and wrestling shows routinely attract multiple millions of paying households. Imagine a product that women might actually want to watch. If a studio gets 3 million PPV customers for a movie at $28 each, that's $84 million. And even if the movie sucks, the studio still gets the money.
? If the studios don't want to play ball, the indies will. If I was a young, struggling film producer and got the big buzz from Sundance, I'd want to take the next Blair Witch out to the audience directly. Especially after that movie created a successful strategy for building Web-based buzz. If you don't think so, see MP3 above.
The end of the multiplex? That's not all, folks.
This is only one small aspect of the change that the staid motion picture industry will have to deal with thanks to the Web. Audience interaction, co-marketing opportunities, tie-ins, prop sales at online auctions, and even testing of the movie online will all change. The distribution paradigm will change first, as it has in the record business because of MP3. Other changes will follow. Together they will shake up Hollywood and the film industry like they've never been shaken before.
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