The “death of cinema” has been declared any number of times over the years.
As long ago as the late 1920s, when the revolutionary idea of “talkies” came about, people felt that their art form was threatened. The same occurred with the launch of TV, again with VHS and then DVD’s, and most recently with the launch of streaming platforms, with a few other scares along the way.
It is one of cinema’s great ironies that, in an industry so continually driven by technology - whether that is the mind-blowing special effects on the screen, or the ever-evolving streaming platforms that we use to consume content - many of its most influential figures are basically terrified of change.
This isn’t without reason: film is, after all, a multi-billion dollar industry where the people at the top of the food chain have a well-established business model that can make a lot of money for them, their investors, and their shareholders.
But, as we can see in most industries, any model with so much money swirling around and so much opportunity finds itself ripe for disruption. When those disruptors come in, the established industry leaders often spend a long time fighting them before they are eventually forced to embrace these new ways of thinking once consumers make clear what they want. Netflix, and the streaming revolution that it inspired, is the obvious example here.
There are plenty of smart, well-paid analysts out there currently crunching numbers and sorting through data like their jobs depend on it (because they do!) trying to figure out how consumers will likely respond to the recent deal between Warner Bros and HBO Max (as detailed in our previous post), and what it means for them and their employers.
And that is the point. The consumers will ultimately dictate how successful Warner Bros’ new move is, and whether it will prove to be just a blip in an otherwise robust business model, or a cataclysmic generational shift signifying the death of cinema as we know it, as some people have declared.
The Cinema Experience
I still believe that it’s premature to call this “the death of cinema”. This is because going to the cinema isn’t simply yet another way of consuming content. It’s an experience, and one that has become culturally significant at that.
Going to a theater to watch a movie on a huge screen in a dark room filled with strangers is still a unique experience that cannot be easily replaced.
Streaming didn’t kill cinema. Streaming killed its home video competitors. However, it didn’t actually offer a brand new experience, but rather it significantly upgraded the existing home video experience with a vastly superior delivery system.
And while it became easier than ever to access content online, which of course had a big impact on cinemas and their revenues, streaming platforms still can’t replace that theater experience, no matter how big your TV screen is nor how advanced your home surround sound system may be.
Some people simply love to go to the cinema. This is especially true in certain cultures and among certain demographics.
Cinemas still provide an ideal option for families looking for an evening out or potential partners meeting for a first date. Going to the cinema remains a social activity in a way that gathering in someone’s living room is not… yet.
Perhaps cultural changes will push us in that direction, but judging by the desire of many people to head back to the cinemas in countries where theaters did reopen in 2020, they still offer an experience that people want and would miss.
Pricing Out Their Customers
The problems that cinemas have encountered in recent years have been largely down to one factor: price.
In larger cities in the US, it can now cost between $15 and $20 per person to go and see a single film at the weekend. That’s a lot of money for some people, particularly if you throw in some concessions and parking fees too. You really have to want to see a movie in order to spend that much money on it.
For some sectors of society, people are simply being priced out of a precious experience that they no longer regard as being a good value proposition.
This is the primary reason why the cinemas these days are dominated by big-budget studio movies, franchises, sequels, and spin-offs. Not only are these much easier to market thanks to a pre-existing piece of intellectual property that has already established a dedicated audience, but they also represent a “safe bet” for consumers who simply can’t afford to get their choice of movie wrong.
If someone can only afford to see one film a month at the cinema, they’re far more likely to head for something familiar where they feel confident of the quality and entertainment value, as opposed to something new and strange which might end up being fantastic, but might equally not be to their taste. If they’re uncertain, most people would rather take that risk by watching it on an SVOD platform, even if it means waiting a few months.
So, while the cinema offers a unique experience that I don’t believe will disappear any time soon, it is also a problematic one. The films on offer at cinemas have become less diverse, while the experience has become more expensive. The cinema has shifted away from being a place of discovery, in part due to the large sums of money at play. The theater chains may yet pay for their reliance on the studios and the formulaic fare that they often create.
A Turning Point?
Perhaps Warner Bros’ actions will actually improve that experience. Rather than signify its death, perhaps this deal will re-invigorate the cinema industry. Perhaps, when the cinemas re-open, prices will come down and the experience will be improved. Perhaps there will be more variety, and exhibitors and distributors will take a chance on more “left field” material. Time will tell.
Cinemas remain an experience that people want, but they may have to change to remain accessible to the masses. This could be the wake-up call that they need.
If cinemas refuse to work with Warner Bros by not screening their movies going forward, that could mean more slots for other filmmakers and their work. That in turn could open up opportunities for the rest of the industry to take advantage of, which might actually make a theatrical release a more realistic option for other filmmakers.
I don’t see that happening completely. Warner Bros is a hugely powerful and influential studio that will continue to make great commercial movies, and I believe that, once the initial sting of this deal wears off, the cinema chains will figure out a way to work with them, even if not on the terms they had previously.
But maybe that’s exactly the change that we need to see. Cinemas can no longer take their customers for granted. This could force them to re-examine their business models and see what more they can offer to keep their customers happy, whether that is lower pricing, a more diverse selection of content, or a better moviegoing experience in some other way.
And if the studios decide that the theatrical model is still profitable for them, they must also look at the content that they create and distribute. Customers will only go to the cinemas if there is quality content that can be marketed to them in the right way. If that content is being put out in cinemas and on streaming platforms at the same time, the cinemas will need to work doubly hard to attract customers for their experience, and studios must figure out how to make that content “unmissable in the theaters”.
If both the theaters and the studios can react to this deal in a positive manner, it could be to everyone’s benefit.
The Pandemic
For all these arguments, there is still one great unknown that could jeopardize everyone’s well-intentioned theorizing on this subject. The longer this pandemic goes on, the longer theaters will remain closed (or at least, well under capacity). No business can survive such a situation in the long-term.
This pandemic has shown that people will always want new content, but that the theatrical model is not entirely reliable. Even if the pandemic ends and we can finally get back to some semblance of normality in 2021, how long will it be before people truly feel safe going back to the cinema on a regular basis?
It’s difficult to predict, but if that process takes too long, and cinemas don’t work hard enough to entice their customers back once they can re-open, then people will have no choice but to watch all their content at home on streaming platforms.
This could create a significant cultural change that makes the unique experience of the cinema an anachronism for an entire generation, transforming it from a cultural necessity to a cultural oddity.
It will be interesting to see how this plays out, but I do believe it's premature to declare this the "death of cinema" just yet...
Where Does This Leave Filmmakers?
So, for all our theorizing, I have received questions from a lot of independent and emerging filmmakers about how this Warner Bros/HBO Max deal affects them in a more practical way, both in the short-term and the longer-term.
We’ll look at that in our next post!
Ricky Margolis has over 15 years' experience in the entertainment industry and has been involved in the finance, development, production, marketing, and/or distribution of over 30 titles.
Want to know more about film & TV financing and production? You can find our series of books by clicking here.
Comments