Monday, February 14, 2011

Movie Theater Chains to Own and Distribute Films

With the approval of Comcast's purchase of NBC and distribution owning content, the movie theater chains are going back to old behaviors. "Regal Entertainment Group and AMC Entertainment Inc. are close to launching a joint venture to acquire and release independent movies, according to people familiar with the situation, a part of the business historically dominated by the Hollywood studios." Where antitrust laws once stopped this content-distribution partnership, the rise of competitive distribution platforms now are encouraging it. Ultimately, these antitrust laws were meant to protect the consumer, ensuring that movies, regardless of their ownership, would reach into your town. Today, those laws no longer apply.

Movie houses are concerned that the content they receive is going directly into the home too quickly, reducing the amount of income a film can earn. The rise of on demand and digital download, improves in home theaters, and the rising costs of going out to the movies has lowered attendance. "And with attendance flat over the last five years and down 5% in 2010, theater owners have been experimenting with ways to draw more people into their venues, such as showing live sports events and concerts." And yet revenues are rising because ticket prices are rising. 3D and IMAX both encourage going out to the movies, but 3D TVs are already in the home and home-IMAX may not be too far away.

Owning content means controlling its distribution to other competitive platforms. Is this antitrust behavior? Does this bring government back into the entertainment world again? It seems the slippery slope of distribution owning content is only getting steeper.

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