EXCLUSIVE: Oscar-winning filmmakers James Cameron and Jon Landau have raised their voices in concern and in unity with the exhibition industry over the new business proposal from The Screening Room that would close the theatrical window to allow studio films to be shown day-and-date in homes. Speaking for both, Landau told Deadline that movies should “be offered exclusively in theaters for their initial release.” They are the first filmmakers to speak out against The Screening Room in the wake of a several — many of whom are either shareholders or advisers — lining up behind Sean Parker and Prem Akkaraju’s streaming concept. The list of those in favor of The Screening Room include Peter Jackson, Martin Scorsese, Steven Spielberg, J.J. Abrams, Frank Marshall, Taylor Hackford, and Imagine’s Ron Howard and Brian Grazer.

The controversial streaming service prompted NATO to send out a statement this morning which said any change in the theatrical window should not be undertaken by a third party, but should be a collaborative process with exhibition. Yesterday, the Art House Convergence, a consortium of specialty theaters, including Alamo Drafthouse impresario Tim League, slammed The Screening Room in an open letter, one vital point being: They fear the service will kill local businesses around the nation that are propped up by weekend moviegoing.

“Both Jim and I remain committed to the sanctity of the in-theater experience. For us, from both a creative and financial standpoint, it is essential for movies to be offered exclusively in theaters for their initial release,” said Landau. “We don’t understand why the industry would want to provide audiences an incentive to skip the best form to experience the art that we work so hard to create. To us, the in-theater experience is the wellspring that drives our entire business, regardless of what other platforms we eventually play on and should eventually play on. No one is against playing in the home, but there is a sequencing of events that leads to it. The in-theater communal experience is very special.”

One of the key concerns from exhibition about The Screening Room, besides the cannibalization of their business, is the risk of piracy. Landau and Cameron agree.

“Once something is available in the home, you open yourself up to a vulnerability of piracy and what we have learned is that people who watch pirated movies, do not care about the quality of what they watch,” said Landau.

The idea is for the consumer first buy a box for $150 and then pay $50 per film after that for each film they want to see. The water fountain effect, where, a great number of people would take advantage of the $50 price point and herd in numerous friends and family members (potential moviegoers) to watch at home is also concerning to both exhibition and the filmmakers.

“I heard Today show hosts talk on air about, ‘Oh great, let’s have opening day event parties at our home to watch the movie.’ Who knows how many people would attend? As an industry, we have a responsibility to support all the theaters not only the big chains in big cities, but all theaters — in small towns and the small chains, too. We do that by creating quality content and the theater owners have a responsibility to continually upgrade their theaters to provide a state of the art presentations,” the Oscar-winning producer added. “I really view the distributors and theater owners as partners in this industry and we need to work together to continue to create an in-theater special experience for moviegoers around the world.”

To date, AMC Theatres is the only chain that has reportedly signed a letter of intent with The Screening Room. That chain participated in Paramount’s VOD-profit sharing, short-window release of Scouts Guide To The Zombie Apocalypse and Paranormal Activity: The Ghost Dimension. 

In 2011, Landau and Cameron signed NATO’s open letter against DirecTV’s proposed premium streaming plana cause that Jackson originally supported.

Below is a copy of that April 20, 2011 letter:

We are the artists and business professionals who help make the movie business great. We produce and direct movies. We work on the business deals that help get movies made. At the end of the day, we are also simply big movie fans.

Lately, there’s been a lot of talk by leaders at some major studios and cable companies about early-to-the-home “premium video-on-demand.” In this proposed distribution model, new movies can be shown in homes while these same films are still in their theatrical run.

In this scenario, those who own televisions with an HDMI input would be able to order a film through their cable system or an Internet provider as a digital rental. Terms and timing have yet to be made concrete, but there has been talk of windows of 60 days after theatrical release at a price of $30.

Currently, the average theatrical release window is over four months (132 days). The theatrical release window model has worked for years for everyone in the movie business. Current theatrical windows protect the exclusivity of new films showing in state-of-the-art theaters bolstered by the latest in digital projection, digital sound, and stadium seating.

As a crucial part of a business that last year grossed close to $32 billion in worldwide theatrical ticket sales, we in the creative community feel that now is the time for studios and cable companies to acknowledge that a release pattern for premium video-on-demand that invades the current theatrical window could irrevocably harm the financial model of our film industry.

Major studios are struggling to replace the revenue lost by the declining value of DVD transactions. Low-cost rentals and subscriptions are undermining higher priced DVD sales and rentals. But the problem of declining revenue in home video will not be solved by importing into the theatrical window a distribution model that cannibalizes theatrical ticket sales.

Make no mistake: History has shown that price points cannot be maintained in the home video window. What sells for $30-a-viewing today could be blown out for $9.99 within a few years. If wiser heads do not prevail, the cannibalization of theatrical revenue in favor of a faulty, premature home video window could lead to the loss of hundreds of millions of dollars in annual revenue. Some theaters will close. The competition for those screens that remain will become that much more intense, foreclosing all but the most commercial movies from theatrical release. Specialty films whose success depends on platform releases that slowly build in awareness would be severely threatened under this new model. Careers that are built on the risks that can be taken with lower budget films may never have the chance to blossom under this cut-throat new model.

Further, releasing a pristine, digital copy of new movies early to the home will only increase the piracy problem—not solve it.

As leaders in the creative community, we ask for a seat at the table. We want to hear the studios’ plans for how this new distribution model will affect the future of the industry that we love. And until that happens, we ask that our studio partners do not rashly undermine the current – and successful – system of releasing films in a sequential distribution window that encourages movie lovers to see films in the optimum, and most profitable, exhibition arena: the movie theaters of America.

We encourage our colleagues in the creative community to join with us by calling or emailing NATO at 202-962-0054 or nato@natodc.com.


Christopher Nolan