The recent merger between Paramount Pictures and an undisclosed major streaming company has sparked a wave of concern among movie theater owners around the globe. This move, following a trend of major studios creating partnerships with streaming services, poses significant challenges to the traditional cinemagoing experience and the financial stability of theater chains.
One of the main reservations movie theater owners have regarding this merger is the potential acceleration of the trend of simultaneous theatrical and streaming releases – a practice that has gained momentum during the pandemic. Paramount, an age-old bastion of filmmaking, houses a vast library of blockbuster franchises such as Star Trek, Mission: Impossible, and Transformers. If these big-budget films are released directly on streaming platforms, the fallout for exhibitors can be substantial.
Box office returns have traditionally been the primary income source for movie theaters. This business model relies heavily on exclusivity, drawing crowds to the theater for the chance to see a new movie before it is available for home viewing. By adopting a simultaneous release strategy, Paramount’s merger has the potential to further diminish the already dwindling box office returns, leading to a significant drop in theater revenue.
Moreover, the sense of spectacle and community that accompanies theater-going can be at risk. Watching a Paramount blockbuster, with its significant production value, stunning visuals, and immersive sound design, in the comfort of your living room may lack the collective experience, the roaring sound, and the larger-than-life visuals offered by a theater. A significant part of the charm of the movies has always been the shared experience – the laughter, the gasps, the applause – which is hard to replicate at home.
Movie theater owners are also concerned about the unequal competition with global streaming giants. Under the current revenue model, movie theaters pay a percentage of their box office revenue to the movie distributors. However, with streaming services, there is no similar revenue share. This discrepancy makes it increasingly difficult for movie theaters to compete with streaming services, leading to further financial hardship for the former.
In response to these concerns, theater owners are urging for regulatory intervention to level the playing field. Suggestions range from changes in revenue sharing models to regulations on release windows. However, as the industry evolves, the practicality and effectiveness of these measures remain to be seen.
While the merger is a strategic move by Paramount in the quickly evolving entertainment landscape, it undoubtedly has raised anxieties amongst movie theater owners. As the dust settles, the onus is now on regulators, industry stakeholders, and, to some extent, the audience, to determine the longevity of the traditional movie theater experience.
