Move that could kill off cinemas

If you could watch a new release film from your home and not pay for overpriced popcorn, would you bother hauling yourself off the couch to go to the movie theatre?

There are some epic films set for release this year – think The Matrix 4, Godzilla vs. Kong and sci-fi thriller Dune – and you don’t even have to leave your house to see them, but it could be a move that kills cinemas.

The movies are all made by Warner Bros and will be available for streaming on the same day as they begin showing in cinemas. The movie studio announced the strategy will apply to all new productions in 2021.

The news saw acclaimed director Denis Villeneuve, who led the filming of Dune, slam Warners Bros’ decision, complaining it showed no love for cinema or the audience.

Lockdowns around the world also sent films straight to streaming in 2020, such as Emma, Trolls World Tour and Frozen 2.

But if Warner Bros’ move was to become more widespread among the industry, which in the last decade has been ravaged by piracy, streaming services and most recently the COVID-19 pandemic, it could doom cinemas to the history books.

“If people can enjoy major film releases from the comfort of their own homes, cinema ticket sales would likely decline significantly,” said IbisWorld senior industry analyst Will Chapman. “Revenue across the cinemas industry was expected to rise by 1.1 per cent in 2020-21, but the Warner Bros announcement could spark further disruption of traditional distribution models, potentially limiting industry revenue.”

The box office in Australia raked in $1.2 billion in 2019, with $40 million generated from Aussie films.

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Movie exclusivity in cinemas used to last 90 days, but even this has been eroded in the last year.

US-based cinema operator AMC Theatres reached an agreement with Universal Pictures to reduce the exclusivity window to 17 days due to the pandemic.

Australian independent cinema chain United Cinemas has been lobbying the Federal Government to intervene by legislating a mandatory theatre-exclusivity window for new film releases – arguing it’s the only thing keeping cinema alive. France and Turkey have passed similar legislation.

But Mr Chapman questioned whether this could have any impact of saving cinemas.

“The approach taken by Warner Bros means that high-quality streams of new films, both legal and illegal, will be available online,” he said. “Attempting to force consumers to go to the cinema or wait to view the latest films would likely drive an increase in piracy, rather than greater cinema ticket sales.”

Independents make up 31 per cent of all cinemas in Australia, including in most regional areas, Screen Australia data found, but these are the ones expected to struggle the most.

“Cinemas that can advertise their unique viewing experience, such as massive screens with the latest projection technology, advanced sound systems or luxury cinema concepts, are forecast to remain in demand over the next five years,” explained Mr Chapman.

“In contrast, smaller cinemas will increasingly be competing with streaming services, which are typically more affordable than cinema tickets.”

Streaming services were expected to make more money with the changes. The Pay Television and Internet Protocol Television Services industry, which includes heavyweights Foxtel (owned by News Corp the publisher of this site) and Netflix, is expected to grow by 3.3 per cent in 2020-21 to $5.7 billion.

Sales of premium TVs and home-theatre systems are also expected to reach $3.1 billion this year.

“The desire to replicate the cinema experience at home has driven demand for larger 4K-capable televisions and high-quality sound systems,’ said Mr Chapman.

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