4 Reasons Why Home Theater Will Rise

I think something important is happening to movies right now. Not in their content or marketing, but in their distribution. Of course, what we're talking about is a shift, arguably a permanent shift, away from theatrical distribution, and toward home distribution.

No, I'm not anticipating the demise of movie theaters — but rather the relative rise of home theaters. This is because I think that in the future, first-run, big-budget movies will be simultaneously released in theaters and homes.

In the near term, the shift to homes is manifest. Under lockdown conditions, with movie theaters closed, everyone is watching from home. Comcast is uniquely qualified to keep track of this kind of data, and the data is clear: there has been a 35% increase in streaming and web video consumption; that's huge. This new viewing behavior isn't surprising. The question is whether it's temporary or long-lasting.

I argue for the latter. In the short term, movie theaters will suffer devastating losses. Then audiences will slowly return, but attendance will never reach pre-virus levels. Smart movie moguls will increasingly send their content to where the eyeballs are: home theaters.

That's my opinion, and I have my reasons...

1. Health concerns. No one knows when or if the danger will subside, and to what extent the danger will be mitigated. For example, even if a vaccine is developed, widely distributed, and is 80% effective, going to a crowded place would still be an exercise in risk management. You might accept the risk for something important, but would you risk it for a movie that you could also see at home? What if the movie only got middling reviews; would you risk it then? Somewhat safer than cruise ships, but not nearly as safe as your sofa, movie theaters may be permanently stigmatized.

2. Cost. Tickets and snacks, and maybe parking and a babysitter — taking a family out to the movies has never been cheap, compared to staying at home. Going to a movie is a small luxury, but it is still a luxury. And it is a stark reality that for a while, and maybe for a long time, many families simply will not have the disposable income available to spend at movie theaters. And even if they do have disposable income, they might elect to squirrel it into a savings account instead. VOD will always be cheaper than theatrical.

3. Acclimation. After a year or two of not going out to the movies, many people will simply fall out of the habit. Just because it's something you've always done doesn't mean you'll always do it. You've always gone to work, but you might now start working from home. Actually, if more people are working from home, would they put on pants after work to go out to a movie? They might stay in and watch the movie there. Pajama movies instead of theatrical movies.

4. Timeliness of content. The distribution of first-run movies is changing. The Wall Street Journal reports that studios already plan to offer over a dozen first-run movies for home rental for $20. For now, studios are honoring pleas from theaters to exclude big-budget films from the rental menu and instead defer their release. But if skittish audiences stay away from theaters this summer, will that loyalty last through the fall? If ticket sales signal a paradigm shift, Hollywood would cut the theaters loose as collateral damage.

Of course, all of this is predicated on the virus itself. If it's cured or otherwise goes away within a year, then we'll probably revert to our old habits. But if the virus is the real deal, and it persists, then our viewing habits will have to change. Non-theatrical movie distribution will rise. And I'm not talking about phones (sorry, Quibi), I'm taking about distribution to homes where people with adequately good home theater equipment can adequately duplicate the movie-theater viewing experience. Minus the virus.

COMMENTS
CG's picture

Interesting perspective. You may well be right.

The next question might be: How will this affect movie production? Not only in terms of the release schedule, but in how movies will be made. More video, less film? Effects gauged for home viewing? Obviously, there's more. Will this in turn affect how directors, ahh, direct?

jeffhenning's picture

I doubt that anyone involved in the movie theater industry could have foreseen a pandemic being the huge nail in the coffin for their industry. Regardless, this has been happening for real with TV sets moving towards wall size. Everyone in the industry could see that.

To be honest, though, my best experiences in a theater have paled in comparison to the best in my home theater. The only thing the theater has is that you can see it sooner and the screen is bigger. That's it.

My TV offers a tremendously better picture than I've ever seen at a theater. My audio system is an order of magnitude better than anything you'll get in the world's best theaters. The acoustics in my joint are better as is the seating.

So why do I want to go to a theater?

Forget me. Anyone with a decent quality flat screen and a $400 TV bar/sub/surround system will be thinking the same thing.

Movie theaters have had a great run. How many entertainment businesses can say they've been around for a century?

I hope the industry can tough it out, but that seems doubtful. It would not surprise me if half the movie theaters in the world go dark in the next year.

Again, it was going to happen eventually.

DCHT's picture

What jeffhenning said. In July of last year, I finished building my home theater. I haven't been out to a theater since. Truly, it's the best decision I ever made to finally do it. My sound system is better, my screen is clearer, my seats are more comfy, my concession stand is never crowded and it's showing any movie I want, anytime I want. And my kids can go to the movies 3 or 4 times a week if they want and the popcorn and snacks are dirt cheap. There are experiences that I'm glad I had in a crowded theater but the current prices coupled with the annoying patrons are enough to make me want to watch everything at home in the future. And I'm sure I'm not the only one.

CG's picture

My own observation is that theaters vary all over the place. By sheer dumb luck, we actually have a very good theater within about 15 minutes of where I live. The pictures are great, the sound is very good and the new seats they installed recently are very comfortable. And, if you go at the right times, you can work around the crowds to a degree and the ticket prices are single digit dollars.

But, you just can't compare the home experience to the movie house, any more than you can compare a musical performance in a large hall to one in a practice room or even to my wife playing in the living room. They are not the same. The scale is different, both in the picture size and the way the sound pressurizes the rooms. Maybe it's like comparing a watermelon to a strawberry. Both are fruit. One is not better than the other - they are just different. Yeah, some strawberries are better than other strawberries and the same for the watermelons. Same for movie houses and home theaters.

The cost of tickets is a rationalization - be honest. My wife and I could go to the movie house every day for the rest of our lives for less than what we have invested in home A/V gear and the ongoing ticket equivalent of renting streaming videos or purchasing Blu-Ray discs. That also assumes that we never upgrade or replace our home electronics.

The real advantage of a home entertainment system is that everything runs at your convenience. Snowing out? A pandemic? Stay home! Can't sleep one night? Go watch a movie at home. Want to watch a serious athletic competition that may be a hundred miles away, with the best seats half that distance to the court/rink/field? Watch at home. Concerts? I'd better not even get started on those.

In addition, you have a lot of control over the picture quality, the sound, and the overall environment. Not so at the movie house. That includes the annoying patrons and concession stand. Unless the home patrons are annoying.

DCHT's picture

I'm not exactly sure why but each and every time I post a comment online about how much I enjoy my home theater and how much more I enjoy it now than going out to a theater, someone replies to tell me that I'm wrong, that I actually don't enjoy my home theater more because it's not exactly the same experience.

Of course it's not exactly the same, I've been to enough movies in my lifetime to know that. Even my kids are aware that it's not the same. But the truth is, we DO enjoy my home theater more and we like the experience of watching a movie with our family or a large group of friends in the home theater that I built MORE than going to an actual movie theater. I take it that you don't feel that way. That's fine. Not everyone does. But I do. I'm not sure why this is such a difficult concept for people to grasp.

Of the 8 theaters within reasonable driving distance of my house, only one of them has a sound system that I would call even remotely acceptable and that's an AMC Dolby Atmos theater. It's loud, dialogue is clear, and the picture is usually good. It's also 50 minutes away so I don't go there often. The others keep their sound so low that it's almost criminal to charge people for it. I got so sick of it that I started researching how to build my own theater and I researched for months how to replicate that theater sound. I believe that I did it because I am consistently blown away by how great it sounds. Why would I want to pay for crappy sound and a halfway decent picture? Maybe you got lucky and the theaters in your area are stellar. That is certainly not the case here.

There's no rationalization on the cost of tickets, by the way. I've paid for countless movies that I wish I hadn't paid for and I finally got sick of that also. Plus, and I just calculated this after you mentioned going to the movies every day and how it would compare financially, I would absolutely spend more going to the movies than what my theater cost. If my family and I went to the movies every day for the next ten years, it would cost over $237,000. I didn't spend anywhere NEAR that on my theater. Yes, I'll have to switch out or upgrade components over the life of the theater but I would never come close to spending $237,000. That's not anywhere close to being a rationalization, that's just math lol.

Not trying to be snarky at all, honest. I'm just a little weary of people telling me that my opinion, and the opinion of my friends and family, is wrong.

CG's picture

Huh?

Just where did I say that your opinion was wrong? In any way?

My experience at movie houses locally has obviously been different than yours. As I said, movie houses seem to be all over the map. That was my point. If you find that antagonizing, I don't know what to say to you.

FWIW, tickets here for the early show on a late Sunday morning are $4. I think that's also true on other days as well.

Olaf the Snowman's picture

Home theater will also help surround sound music and hi-res audio :-) ........

PunchyRedcrown's picture

I think he's right about a quick effective vaccine potentially carrying the day for theaters. I don't know that I personally see a vaccine being quick or 100% safe/effective. To what he's saying, something that is 80% still gets people back in the theaters, just in drastically reduced numbers. Theaters are going to have some tough decisions to make- either raise prices for greater margin or lower prices to attract that lost customer on the margin. Either way it won't be pretty.

I see this as another knockout punch for theaters. Unemployment is still spiraling to unprecedented levels, leaving the end consumer strapped. Many families will never fully recover, forcing an even greater number of tough financial choices. Couple this with the rising popularity of Netflix, CBS, etc. and you get the stars aligning for home theater. I can see first runs going straight to the home by way of these carriers, which is the main advantage of a theater. They've also proven they can create unique content that people like, which wasn't really at the forefront as much prepandemic. I also think the theaters are over indexing on the experience as well. I remember seeing the latest Star Wars a few months ago and how I walked out of the theater with a headache.

We can now get a very good 85" for $3000 and a great sound bar for a little over $1000, so it's increasingly becoming about truly creating the experience at home. I see us going back to the 40's and 50's to an extent whereby we invite friends and neighbors over for movie night or something like that.

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