Could Movie Theaters Be Revived?
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Netflix, the big disruptor of the media industry in the 21st century. What once started as a DVD in the mail service turned into a streaming service that made Netflix the media giant that it is today. The pioneer of streaming, Netflix has not only allowed people to watch content without ads but has given people a new way of viewing content. No longer do you need a DVD or cable to view content because you can view movies and tv shows from its digital library on any device.
All of these benefits have led to trends like cord-cutting and the decline of the movie theater industry. With technology making content easily accessible, many would expect media companies to not venture into "old industries" like movie theaters.
But for Netflix, they seem to be interested in a dying industry
The Phenomenon
Photo by Jake Hills on Unsplash
In December of 2019, Netflix was making news when it had taken over the lease of the historic arthouse Paris Theatre cinema in New York City. With this movie theater, Netflix plans to use it for theatrical release, special events and screenings, and as a home for the Netflix Originals on the big screen. The movie theater experience is still something many people enjoy. By having their newly produced movies on the big screen, Netflix can start reaping the benefits a movie theater would enjoy when a new movie gets released.
And also, Netflix was also rumored to buy out The Egyptian theater in LA.
Netflix seems to have an appetite for acquiring iconic movie theaters. Some will say that this appetite was made when the company wanted to create a new experience for its fans. As they say, iconic movie theaters did give moviegoers an experience like no other.
Photo by Joel Muniz on Unsplash
The big question on everyone's mind is: why is Netflix buying out movie theaters? Well, the main reason is that they wanted to qualify for the Oscars. According to the rules of the Oscars, to qualify, a media company needs
- to have that film that they want to qualify for the contest on one big screen in New York and Los Angeles
- Be open theatrically for a week
Those are the two requirements needed to qualify for the Oscars. For Netflix, they have been releasing their movies in theaters but couldn't get control of the experience because they allowed other movie theater chains like Regal Cinemas to show them in their theaters.
By acquiring their own movie theaters, Netflix can control the experience and even reap more profits from ticket sales. Plus, the acquisition of the movie theaters gives Netflix the comfort of not having to worry about distributing its films to cinema chains in order to qualify for the Oscars.
A week before Netflix announced that it had bought the Paris Theatre, the US Department of Justice decided to begin the process of dismantling the 1948 Paramount Decree. The Paramount Decree stopped movie studios from monopolizing the distribution of their films and screening them only in cinemas that they owned. The removal of the Paramount Decree allows Netflix to start its own movie theater chain and have its movie theaters be exclusively-branded, allowing them to only show their content in their cinemas without having it be shown in other cinemas.
The removal of the Paramount Decree does hurt the movie theater industry but it does provide more benefits to media companies like Netflix and Disney.
Conclusion
Overall, Netflix's acquisition of the Paris Theatre cinema in NYC does show that Netflix notices and cherishes the movie theater experience. By seeing the value in the movie theater experience, Netflix has another medium of displaying its content and another avenue of profits.
Does this mean that the movie theater industry has a chance of being revived? In my opinion, it depends on how you look at it. I do see movie theaters staying in the future. Besides the reopening of movie theaters, we'll also see a potential revival of the drive-in movie theater experience because of fears of another pandemic.
Photo by Krists Luhaers on Unsplash
When looking at the future of the movie theater industry, because of the removal of the Paramount Decree, I see movie theater chains being bought up by media companies looking to control the movie theater experience their customers have. I don't see the big, independent movie theater chains surviving.
But who knows, things can change at any moment and the independent movie theater chains will be thriving in the Age of Netflix.
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