Would you pay $50 to watch a newly released movie at home?
A new company wants to offer just-released movies to stream in U.S. households.
The startup -- led by Sean Parker, who founded Napster and served as the first president at Facebook (FB), along with music executive Prem Akkaraju -- wants to let people watch new releases at home on the same day they hit theaters. The cost to watch a film would be $50 apiece, according to Variety. Known as Screening Room, the company also would charge $150 for a secure anti-piracy set-top box that grants access to new films for 48 hours.
Less clear is why theater owners would go for the plan, seeing as it would seemingly reduce foot traffic to local cineplexes. To get exhibitors on board, Screening Room proposes offering them a significant percentage of the revenue, as much as 20 percent of the fee.
What's more, the concept calls for giving customers two free tickets to see the movie at a theater of their choice in the hope they'll buy popcorn, soda and candy to offset any drop in concession sales.
Participating distributors would also get a cut of the $50-per-view fee, reported also to be 20 percent, while Screening Room would take 10 percent, or $5.
Several major studios, including Universal, Fox (FOXA) and Sony (SNE), reportedly have expressed interest in the concept.
The idea isn't new. In 2011, cable provider Comcast (CMCSA) offered subscribers the option to watch the Ben Stiller comedy "Tower Heist" for a $60 rental fee. But theater owners complained, and most of the 500,000 Comcast customers voted thumbs down. The "test," as the movie's studio, Universal, called it, proved a flop.
While $50 may seem a pricey sum, it's only about $15 more than the $34.80 a family of four would pay to see a newly released film, based on the current average ticket price of $8.70, according to the National Association of Theatre Owners. And the film could be watched as many times as desired within the 48-hour viewing window.
Screening Room isn't the only startup looking to shake up how Americans watch and pay for movies. A new app called Atom Tickets launching this year wants to let moviegoers get discounts by buying tickets in bulk.