Streaming Content and Theatres ‘State of the Nation’ and Where It’s All Headed

One of the most popular sessions at the ICTA 2019 Annual Business Conference in Toronto recently was on streaming-content platforms and services, including an overview by Loren Nielsen, VP, Content Relations and Strategy, XPERI (the cinema program of DTS Inc.), who also moderated a panel with Neil Campbell, Vice-Chair, Landmark Cinemas Canada and Mark Louis, Senior Director of Presentation at the Alamo Drafthouse Cinema circuit.

The growing popularity of content streaming platforms and services was not news to ICTA delegates but XPERI’s independent and aggregated research revealed some startling facts, such as more than half of Americans watch streaming-content for two to three hours per day, spread over an average of three devices and three services. “And we’ve found that the number one content category streamed is movies, followed by episodic TV (shows), then news and then sports,” said Nielsen.

Nielsen outlined the wide variety of current and planned services and subscription fees, including Netflix and Amazon Prime (with the most subscribers), HBO Now, Hulu (acquired by Disney); Sling, Sony Interactive, Philo, CBS Interactive and others rounding out the current lineup, with Disney+, AppleTVPlus, and HBO MAX coming by year-end.

(UPDATE:  The landscape for streaming platforms is ever changing and at time of posting this article, a month after the ICTA conference, Disney surprised the market by announcing that it will launch Disney+ not just in the United States, but also in Canada, where it will be available across almost all major mobile devices and television. Canadian industry observers opined that this will put pressure on Canada’s traditional cable-content providers.)

Quality of presentation has been an area that cinema exhibitors have always had the edge over handheld devices and televisions, but XPERI research points to a possible leveling of that playing field, as it estimates that more than 200 million homes worldwide will own an Ultra High Definition (UHD) TV by the end of his year, and that figure could go as high as 600-million homes by 2023.

So questions abound. How are these services, delivered through more devices – and some with visuals rivaling the best theatres – to affect exhibitors’ business?

Landmark’s Campbell said that his faith in the movie business being as healthy as ever is illustrated by Avengers: Endgame and Game of Thrones, Final Episode, both setting records for viewership in their respective industries. And in hallway conversations, ICTA delegates were confident that audiences are continuing to flock to a great movie presentation, delivered with stunning – often laser-projection powered – visuals and immersive, surround sound.

He added that 2019 box-office revenues remain healthy, on top of a 2018 pace that set a record for revenue and theatre attendance, due to a (generally) great slate of products. Plus the upgrading of the theatrical experience across circuits and at independent venues has delivered  greater comfort and increased enjoyment among patrons of these movies.

But although the production-and-presentation quality is a winner, Campbell argued that it’s the stories that count. “More (content) is always better; we just have to figure out how we handle ‘more’,” said Campbell.

While acknowledging that “content remains king,” Louis added that, speaking to his technical mandate, content has to be presented in the best quality possible, “and what exhibitors are struggling with right now is the 4K/HDMI aspect, as most of our equipment needs to be upgraded for this, which excites me because it offers the opportunity to take content normally seen at home and put it on the big screen, at, for instance, 60 frames per second.”

Nielsen asked what the panelists thought of the studios sending their content first to their streaming services, and whether those moves reveal an emerging challenge to the traditional model of having the first-release be a theatrical experience.

“Sure, I would like my theatres to be the only initial source to see Lady and the Tramp, but that’s not how the world works. I don’t think anyone has a clear plan yet, because, remember, none of this has ever happened before and we don’t know what is coming or hasn’t been thought of, so I hope that there will be more opportunities for us all to do better and make more money, given there will be so much more product,” said Campbell.

“No one is making nothing but blockbusters so the more quantity, the more likely that there will be quality there, as no one can guarantee a blockbuster, like Green Brook, which came out of nowhere to be a winner and the best movie of the year (for 2018),” added Campbell.

Louis added that technology, properly deployed to deliver the best experience, should be an argument to the content providers that theaters ought to continue to have “windows of exclusivity,” which in turn could be shared with streaming-service subscribers. “We worked in August to do something nationally with the launch of ‘Righteous Gemstones’ and HBO. As a subscriber, you are able to see it before anyone sees it at home, but on the big screen, with reserved seats to see a premiere. The big benefit for the streaming platforms is that subscribers in turn will spread the word. “

Nielsen asked what exhibitors would like to see as their window to show, for example, The Irishman (Netflix 2019).

“We would love to play it but no one is showing their cards yet; they want to be the last to put their cards down,” said Campbell, referring in general to what windows and platforms will be offered and negotiated with the wealth of content becoming available. Louis added that Alamo Drafthouse will find a way to slot in all this content, despite having limited screens, due to the dine-in raison d’être of the circuit, by juggling timings.

Spending on content is going through the roof, with a huge amount of capital investment going into production efforts, noted Nielsen, and she asked what the big upside for theatres in all this is?

Louis noted that all the content creators and providers should view theatrical releases as an opportunity to build excitement for what they’re producing, ensuring that all sides win. Delegates echoed this belief, with Campbell shrewdly noting that theatrical distribution is the engine that pulls the content-delivery train, which studios can leverage on their other platforms.

“Look at Disney, where they believe in the value of the theatrical window, and they want to ensure that they market a movie as best as they can, to deliver as big an audience as possible in the theatres, because that sets the demand, excitement, attendance, etc. for all the other markets. Ours is still the number one vehicle to build public awareness of their product.”