Traditional media companies, like movie studios, are often criticized for their lack of innovation. But an experiment planned by Universal highlights just how tough progress can be.
Last week, it was revealed that the company planned a limited experiment in two mid-size cities in the United States. The experiment: for $59.99, consumers would be able to rent the movie Tower Heist while it was still in theatres and well before it became available as a traditional VOD rental.
Needless to say, the plan didn’t seem like a good idea to a lot of people. AllThingsDigital’s Peter Kafka, for instance, wrote:
…painting a $60 movie as a bargain is going to be awfully tough, no matter what math you use. And the fact that it represents a premium for a “collapsed” window won’t mean much for regular people. Even regular people with really nice home theaters and/or expensive babysitters.
Of course, there are situations in which $60 might not represent such a bad deal. A group or large family, for instance, might find the $60 price tag to be a bargain, and arguably there is some appeal to a movie night that doesn’t require dressing up and driving across town to sit in an uncomfortable seat, in the worst case adjacent to a yapping movie-goer.
But even if Kafka and critics were right about the general unattractiveness of a $60 movie rental, that unattractiveness didn’t matter to several movie theatre chains. Fearful about the possibility that they wouldn’t have an exclusive on a new movie, they threatened to boycott the movie nationally. So Universal pulled the plug on its experiment.
That’s a shame. Experiments, even those that look like they’re doomed to fail, are a prerequisite for innovation, and movie studios like Universal should be rethinking how movies are released and distributed to the public. The motion picture industry, obviously, has historically owed much of its financial success to the movie theatre, but in today’s multi-channel, on-demand mediascape, it’s not entirely clear that the theatre is the only viable red carpet for new films. Studios, of course, want to maximize their profit, and given the plethora of channels today, it doesn’t take a huge leap of faith to believe that exclusive releases to theatres may not be the most profitable path for certain movies.
Without the ability to experiment, however, it will be nearly impossible for studios to figure out what makes the most money, and as a result, what consumers want and are willing to pay for what they want. The Universal experiment that never was is a reminder that for traditional media companies to innovate, they’ll have to change more than themselves; they’ll need to change their partners and stakeholders.
In the case of theatres, that won’t be so easy, but it realistically must be done.