The other day I read a op-ed by Owen Glieberman that asked, “Has Streaming Become a Form of Stockholm Syndrome?” Specifically, Glieberman ends the article by saying,
As a business model, theatrical may no longer be at death’s door, but it’s still surviving, movie by movie. Every hit matters, even small ones. Four years ago, we were being told that streaming would be the salvation of our entertainment society. But that’s starting to look more and more like a bill of goods. We shouldn’t be turning the genuine positives of streaming into a form of Stockholm Syndrome, where we bow down in worship to the very force that, more than not, is helping to crush the life out of cinema.
Variety
If you read through the entire op-ed, which I think you should because it’s well-written, you’ll see that what Glieberman is saying is that good movies are still going straight to streaming where they’re forgotten. The implication is that streaming is bad business and it’s bad for the art of movies.
Right off the top let me say
I respect Glieberman. For one thing they write for Variety which is a really well-respected publication. The article is full of salient points and it’s very much worth your time. Glieberman’s right. Movie theaters are barely hanging on, and even without the shutdown they would still be suffering.
And, I totally disagree as to what the problem is. Because I don’t think it’s the idea that good movies are going straight to streaming that’s killing theaters. I don’t think that’s a “pandemic-era” thought that we should abandon.
Movie theaters are dying because it’s an impossible business model. Plain and simple.
It’s very common for a mainstream movie today to cost upwards of $200 million. Even at that, there are some groups that are really squeezed out of the profits. Everyone knows at this point that the reason effects houses do bad work is that they aren’t given enough time and it’s all given to the lowest bidder. Big name stars and directors will grab the people’s attention and that’s why studios spend money on them. Even the film Glieberman talks about, Anyone But You, probably wouldn’t have gotten a moment’s notice if it hadn’t featured two up-and-coming incredibly good-looking stars.
Your neighborhood movie theater gets to keep something around 10% of the ticket price you pay. They have to pay the leasing fees on the projector and sound system. They have to pay the studios to show the film. Some theater chains have weird contracts too, that keep them from showing some films if they want to show others. Some have to pay out-of-their-own-pockets for large promotional signage. They have to use that 10% to pay salaries, building costs, cleaning, and all of that.
When you look at it that way, it’s amazing how anyone other than the stars and some lucky studios actually make money on theatrical releases at all.
The streaming business model should work, but it seems like it doesn’t either
A streaming service should be a license to print money. You collect a decent amount of cash from every subscriber. All you have to do is put a file on a server in a data center. Even if a million people are watching at once, that still doesn’t really end up costing a lot in servers and stuff. So why are streaming companies still complaining that they are losing money?
The first thing is that there’s no inherent way to recapture those high production costs for those blockbuster movies. It costs the same to stream a 50-year-old film as it does to stream a current one. New movies are supposed to drive new subscriptions, but at some point you have all the subscribers you’re going to have. You need to keep them coming back with new content, but that content is going to be so expensive that you’ll never pay for it with ongoing subscriptions.
So, if you’re Disney or Netflix you jack up prices and clamp down on shared passwords. And the only news coverage you tend to get is when people complain. There’s practically no press when there’s new content coming out unless it’s something that people have already become interested in like True Detective.
How do you fix the problem?
As they say in certain corners of the world, the first step is to admit you have a problem. Look, I don’t want movie theaters to go away. I think there’s a place for that kind of experience. But let’s all admit that any given movie has much more chance of being seen over its long life over streaming than in a theater. So let’s stop saying that you “have” to see a movie in theater or designing movies so they’re so dark and quiet that you can’t watch them comfortably at home.
Here’s one more thing that streamers can do, and I think it would work for them. What if instead of charging more for 4K and more screens, companies like Netflix and Max charged more for newer movies? Set it up so every plan gets 4K and 5 screens at a time. You can choose whether you want ads or not. But you pay one price if you only want catalog access, in other words older stuff. If you want to see something that was in theaters recently, or was released to streaming-only recently, you pay $2 or $3 more a month.
Here’s how that would help
This would help streamers compensate for the higher cost of new releases. It would also give people who just want to watch older stuff a lower-cost way to get in. Of course, streaming companies would have to keep prices fair. You can’t have Netflix which is already $23 a month for what should be the “standard” plan, then tack on $5 a month if you actually want to watch something new. The pricing still has to be appealing or people won’t do it.
And finally, let’s give streaming premieres the attention they deserve. There’s a lot of genuinely good stuff that’s either in very limited release or never went to theaters. That doesn’t mean it’s not good stuff. It’s time to break that perception.
