Is OTT The Death Of Movie Theaters?
From the Big Screen to your Own Screen:
Hollywood studios are considering shortening the window between a film’s theatrical release and home release to only two short weeks. A move that would have been considered heresy even 5-years ago could happen in an often static industry known to be a late adopter.
The opportunity motivating such revolutionary thinking? The promise of self-distribution on OTT channels.
With DVD sales down double digits year after year, it is clear that consumer preferences are shifting towards digital content. Digital content provides studios with the keys necessary to forgo traditional distribution gatekeepers, such as movie theaters and rental businesses, including the likes of Netflix, Amazon Prime, Hulu etc. OTT has endowed studios with the ability to make a movie available to fans, on the devices they want to watch, while keeping all the profit.
Studio execs see the opportunity and are even prepared to cannibalize ticket sales in order to capitalize on OTT.
Self-Distribution represents more than just an opportunity to circumvent the revenue share models of traditional channels. OTT for studios means taking control of their relationship with fans, allowing for retargeting and recommendations that drive further business. When a consumer goes to the theater, their only interaction is with the theater. That is whom they purchase their tickets and popcorn from and that is who has the chance to collect visitors’ emails and information in order to develop a relationship. Distributing on their own OTT platforms affords studios that privilege. Being able to gather data about users and then push additional content they may have interest in via in-app recommendations and email is extremely powerful.
The fact that the film industry is prepared to significantly impact their primary source of revenue, ticket sales, in order to maximize profits by self-distributing speaks volumes about the value of OTT.
When a film generates $100 million at the box office, a significant portion of that revenue is pocketed by the movie theater. For the first two weeks of a film’s release theaters on average take a 20% cut, with that number skyrocketing to 50% afterwards. Rather then nibbling on an unimpressive 50% of ticket sales after a film’s first two weeks in theaters, studios now have the more lucrative option of selling their movie directly to fans in the $25-$50 range, feasting on nearly all of the revenue.
Will movie theaters be thrown to the wayside à la Blockbuster, drive-ins, and silent films? Probably not – OTT isn’t a replacement for the big screen experience. Rather, it is a means to capture audiences unwilling to go to the theater in favor of the convenience of their own devices as well as a way to reap all the profits from fans desperate to shell out cash in order to own a film as soon as possible; all the while collecting data and retargeting to drive further sales.
Unreel.me provides the technology and support for the self distribution of any film, be it independent or the years biggest hit.