Hollywood and The Web – Making The Case for Online Movie Releases

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filmI’d like to talk about something tangentially related to online video but still near and dear to my heart:  movies.  I love movies.  I love them so much I went to work t a five-screen cinema at 19 and spent an entire decade managing movie theaters.  I then transitioned to a life of online marketing—it was smoother than you might think.

Imagine my excitement when earlier today I read the headline, “Assassin’s Creed Films To Be Released On YouTube.”

Really?  Assassin’s Creed… that’s a video game, right?  A popular one, too, I think.  Huh.  Releasing a movie on YouTube… that takes guts.  I like it.  Man, I’m going to write an entire article about how cool it is that some studio finally has the courage to skip the traditional system and release a film on YouTube.

But I had gotten way too far ahead of myself.  If you’ve already clicked the link, you know that the film in question is actually a “short film” (a series of short films, technically).  Uh-oh.

And there’s no major studio behind it—unless you count the video game developer, UbiSoft, as a studio.  Oops.

Oh, and it’s animated.


There’s no story here after all.  Just another trumped up “promotional video game extended trailer.”  Kind of like when they release a movie straight-to-DVD because it’s obviously horrendous, yet the box tries to convince you that the film is just “too hot and outrageous for theaters”?

It’s depressing.

But it made me wonder… what’s holding Hollywood back? Can anyone think of a good reason why the Hollywood studios haven’t tried to release a movie online?  I’m talking about a real movie… with movie stars and a huge budget and all that jazz.  Television studios have embraced online distribution—or at least accepted it as an inevitability.  So why not films?

Yes, I know that there are several examples of “films” being released on YouTube or another similar site, such as this one, or this one, or this one.  But the films always end up being low-budget or independent in nature… or starring people you’ve never heard of.

I’m talking about a major studio film with a major star.  When are we going to see studios step up and release a film online first… before it’s in theaters or on DVD… and maybe begin to change the conventional thinking about movie distribution?

While music and television are now widely available online (almost as soon as they’re available via traditional outlets), movies still lag behind.  Sure, you can purchase or even rent movies online, but only after the DVD release window has passed.

I thought it might be fun to run down some of the most likely reasons Hollywood might be using to drag their feet on the issue of online distribution, and debunk them when possible.

1. The “Big Screen” experience.


There are those who believe that going to the movie theater offers an experience of sight and sound the likes of which you could never hope to see in your own home.  Those people are woefully behind the times.  HD televisions, Blu-Ray players, and Surround Sound audio technology make home theaters not only possible… but abundant.  I bet every one of you reading this has at least one friend with a tricked out home theater.  It’s simply not a logical argument anymore to suggest that theaters offer something in picture or audio quality that can’t be recreated at home.

2. Righteous anger.

The studios have been burned by piracy in a major way.  Sure, piracy has been a problem for films for decades, but only with the explosion of Bit Torrent has film piracy gone mainstream.  As surely as you know someone with a killer home theater set up, you also know someone who has a bunch of illegally downloaded movies on their computer.  Anger—revenge even—over online piracy is probably a very big part of why Hollywood doesn’t try releasing films online.  There’s a feeling of distrust on the part of studios for the Internet.  And it’s poor reason to avoid trying an online release.

It’s poor because Hollywood has already embraced the web in basically every single way except for release.  You can buy movies online; VHS, DVD, or digital format.  You can rent them.  You can resell the non-digital versions on eBay.  You can watch movie trailers, outtakes, or entire films for free on sites like Hulu.  And nearly every self-respecting film release these days has an accompanying online viral marketing piece.

So don’t tell me that Hollywood isn’t online.  They are.  You can do anything with film that you want to online… except see it the day it opens.

3. There’s no money to be made in online releases.

Baloney.  I’m tempted to leave my counter argument at that.  While I believe it may be true that the studios think they can’t make money online, I believe that fear is unfounded.  Let’s start with the obvious rebuttals.  For instance, people said the same thing about music online, but iTunes is sort of proving those worriers wrong, eh?  People do pay for digital goods when the catalog is large and the delivery of said goods is efficient and easy.

But an even more interesting way to look at it is to wonder why studios need to sell a ticket in the first place.  Sure, I know they’re used to making $10 for every viewer in the theaters.  But what if they could make the same amount of money per view, with the source of that money coming from advertising instead of individuals?  I mean, the public is already used to watching 20 minutes of ads before a movie, trust me.  So what if a studio released a film online for stream or download, and sold ads to major advertisers on a per-view basis.  They could even sell ad spots on the web page surrounding the video.  I’m no big time movie studio president, but I could make an argument that there might even be an opportunity for online release to bring in more money than theater releases—assuming it’s promoted correctly.

4. People love to go out.



This is the lamest of all the arguments.  People do love to go out, but the economy has proven that most are also willing to stay in if they’re able to save some money.  What people don’t love is paying nearly $40 in ticket prices for a family of four, followed by another $40 at the concession stand for some popcorn and a few Cokes to see something they could have enjoyed just as much on their couch at home.  What people don’t love is the cell phones and loud talkers and sticky seats.  So what do they really love?  Movies.  Period.  There’s a heck of a lot wrong with the current average movie-going experience.  The public is beyond ready to try some new and inventive things when it comes to how they get their movies.

5. The studios have billions of dollars tied up in the current film release and theater system.

Bingo!  Ding, ding, ding!  What do we have for them, Johnny?

This is the reason you’re not seeing films released online.  There is far too much of the studios’ money tied up in movie theaters—heck, many of them actually own movie theater chains.  Oh, and let’s not start in on the technology.  After years of warring over the cost of digital movie projection—those projectors are more expensive than you can possibly imagine—studios and theater chains split the cost in most cases.  So Hollywood’s “all in” on digital projection and, by extension, the traditional distribution methods.  It’s going to take them years to make back their investment.  It’s like when your favorite sports team won’t trade the overpaid-but-underperforming former superstar—they’ve got too much money tied up in him to cut him.

There’s also the matter of box office records.  You know how every week there are countless news stories about which movies made the most at the box office, and which move broke the opening weekend record, and which movie broke the five-day opening record, and so on and so forth?  Why do you think that is?  I mean, when was the last time you saw a preview for a movie that looked interesting, only to have your first thought be, “Gee, I wonder if that film will recoup it’s cost in first-week domestic box office gross?”  That’s what I thought.

So who cares about those numbers?  Well, the studios.  Box office numbers are the Neilsen ratings of the movie world—it’s how they sell advertising and product placement.  The studio with the most box office bragging rights is the studio making the most off their films in ancillary income and landing the biggest stars.

And perhaps the biggest reason the current system is so precious to studios:  they con you into paying twice!  After a studio rakes in the dough on the initial release of the film to theaters, they sit on it for a few months… then, BAM… DVD release, and all kinds of increased profits.  You can see why they like it.  But as a moviegoer, you should be a bit incensed.  They charge you to watch it, then they get you again when you buy it—don’t even start with me on “special” or “collectors’ edition” DVD releases, where they attempt to achieve the trifecta of movie-related income.

If studios started releasing films online simultaneously with theater releases, they figure you’d find some way to pirate the thing, instead of paying to own it again later.  They might be right, but I doubt it.

projectorI think pirates are pirates.  People willing to break the law to avoid paying for something are that way because of their moral DNA, not circumstance.  That’s why iTunes is still in business (and booming), despite the fact that it’s relatively easy to download entire albums illegally.

While there are plenty of reasons for a forward-thinking studio to try something bold like releasing a film online, it’ll be years before you see it… if you ever do.  The technology is there for both the rapid distribution as well as the quality of picture and sound (imagine the cost savings in distribution alone).  The demand is there from the public.  And yet… nothing.  Nothing but student films, movies by unknowns, and documentaries.

I wish even one studio would take a risk and release a full-blown studio film online (heck, even simultaneously with the theatrical release).  I for one am the perfect target audience for such a service.  Despite more than a decade of watching nearly every major film on the big screen, I’m the kind of consumer the studios don’t seem to think exists:  The kind who is fed up with the prices and inconveniences of a trip to the multiplex, who would gladly fork over $10 (or more) for the privilege of seeing the latest blockbuster in the comfort of my own living room.

I wonder how many more like me are out there, and how many of us it will take before we actually see Hollywood catch up to the rest of us and embrace the new revenue streams that technology can provide.


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