MUMBAI: "Movies will regularly premiere in the US on cable and satellite, rather than in theatres within the next ten years."
The prediction comes from Starz Encore Group chairman, founder, and CEO John J Sie. According to her, the distribution route for films is going to undergo a sea change.
Speaking in the Harvard Business School media conference recently, she said a number of factors would contribute to this scenario. One of them is the widespread adoption of high definition television sets by Americans and the deployment of video on demand.
The economics of the movie business will drive studios to make use of this audience to debut their films."Last year, the theatrical screenings of films generated about $5 billion in revenue for the studios compared with $4 billion from cable and satellite. Clearly, we are rapidly approaching the tipping point where it will make more sense for studios to release their films first on cable and satellite, and later in the theaters", she said.
Releasing a film on satellite and cable can save millions in distribution costs, Sie pointed out. And the economics are irresistible. Sie noted that there are about five million HD capable sets in the US today. In the next decade, that figure is likely to rise to 50 million or about 50 per cent of US television households.
"If a major studio can debut a film at a price of $19.95 which is what it costs two people to go to the theater and attract 20 per cent of HD homes to watch that would generate $200 million in revenue on the opening day. This is a blockbuster number in anybody's book".
However Sie did not forecast the demise of the movie theater. "Millions of Americans still love the experience of getting out of the house and going to a theater and always will. But in the future, big films will debut in the home and create the buzz for their theatrical releases, rather than the other way around."
However one thing that could prove a hurdle in the predictions is the threat of piracy. Starz claims to be the largest provider of premium movie services in the US. It has around 151 million pay units.
