Home > Musing > The Hollywood Business Model is Broken

The Hollywood Business Model is Broken

Last week, I watched “The Avengers”. Very nice movie, recommended. Why then, do I feel the need to rant today and tell the movie industry where to stick their business model?

imageLet me give you some background: I like movie theatres, a lot. One of my favourite, the venue last week, is the Electric Cinema in Noting hill. This place represents everything that is great about theatres: It has plush red chairs, footstools, Victorian interior and even a café at the back where you can buy a well made espresso. The sound is great and the screen has high quality, digital projection. The people who go there are not annoying either. The cost is just high enough to discourage people from bringing their youngest children. In other words: It represents everything good about watching movies for the childless couple – my girlfriend and I. Building something like this at home would be, to put it mildly, cost restrictive. It’s not just the quality of the room, it’s the atmosphere.

As I emerged into the daylight, a thought occurred to me: “Wouldn’t it be nice to watch Iron Man 1 and 2 now? I liked those movies too”. My girlfriend, like most people with two X-chromosomes, finds Robert Downey Jr. very charming – it would be an easy sell. I know we are a typical couple in this case – because those movies have suddenly become very popular on iTunes.

Why then, is it that I cant watch Iron Man in the movie theatres? There is really no technical barrier that prevents anyone from uploading digital movies to theatres “on demand”. Yes, the movie is old – but movies don’t go out of fashion. Heck, my father watches the same black and white movies – over and over again.

Imagine a future where I can put down a deposit of money, vote for movies to be shown in my local theatre. I would also provide some dates that I would like to watch. If enough people “vote” for a movie with their deposits, it is shown in a proper timeslot. Of course, it takes off some of the spontaneous "impulse watching” of movies. But I would not expect that everyone who votes will have time to show up. I could buy tickets of someone else or at a discount price – stock market style. This could even be done as Facebook app to drive herd behavior: “Thomas wants to watch Iron Man, hey, I will vote too”.

All of this is of course terribly complicated to implement for someone who lacks planning and IT skills. Instead, I am forced to live by the arbitrary (for the consumer), geographically controlled release dates of Hollywood movies. It seems to me that this is yet another variant of the dinosaur mentality we see in the music industry and it is carrying over to other media companies. It’s a desperate attempt to control a market, because you are too daft, too cocaine snorting or groupie distracted to come up with a better business model. Now, wouldn’t it be nice to have a consumer controlled movie theatre? How much would you pay per month to subscribe if you had influence?

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  1. Mark S. Rasmussen
    May 9, 2012 at 08:19

    To be fair I don’t think this is a rant aimed at the Hollywood business model, as much as it’s a rant against the typical movie theater business model.

    AFAIK there’s nothing stopping theaters from showing old movies, besides licensing costs. If a theater were to implement a scheme like yours, I can’t see anything stopping them – as long as they can make it profitable.

    Last time I was in London one of the theater chains where showing reruns of all the classic Disney movies. Just recently I went to see a rerun of the Ghostbusters movie here i Aarhus. Later this month I’m going to see Jurassic Park. I love going to the movie theater myself and I absolutely love the fact that they’re doing reruns of the classic movies.

    While many of my friends shake their head at spending money on a movie that’s been out for more than a decade, I have no problem spending money on the experience that the movie theater provides.

    Let’s make sure to disrupt both models – neither Hollywood nor the movie theaters are up to date.

    • Thomas Kejser
      May 9, 2012 at 10:55

      I do question how much influence movie theatres have themselves. If licensing costs are restrictive on old movies or the payout on new ones is artificially skewed, how much “choice” do they have in the matter?

      There is also a big question about infrastructure. Admittedly, my proposed model would need a more advanced logistical system put in place. Perhaps there is even a business opportunity for a third party to develop such a tool?

  2. May 9, 2012 at 09:23

    I agree with the above comment. Just few cents: think of the theater as of differently styled McDonalds – you get same food everywhere in the world. However, if you want to get better food and exclusive ambience – you don’t go to the restaurant, which belongs to the big chain, correct? Speaking of the cinema theaters – seems it is really good comparison, because (at least here in Germany) I believe there are no private cinema left. All belongs to the big fat fully globalized companies

    • Thomas Kejser
      May 9, 2012 at 10:57

      Mark seems to be fortunate that he CAN watch old movies (though I would think his influence on WHICH ones is limited).

      Alexei, if I understand your point, you are saying that there are no good “restaurants” left?

      • May 9, 2012 at 18:51

        I know in my area a few of the ‘last standing man’. One specializes on the old classical English (in terms of the original language) movies. But I think I can count them on one hand only. Which confirms the fact.

  1. May 11, 2012 at 05:54

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