[squiggleslash (Unverified) Posted Jul 25th 2008 7:33AM]

Worth pointing out that when TV was introduced and started to become popular in the 1950s, Theaters did start feeling the pinch. There was a massive decline from then on until the mid 1970s, despite enormous amounts of innovation in the industry coupled with reductions in price. By the early seventies, most theaters that were still open were eking out a living showing cheap, often imported, movies of the kind that would never get onto TV to niche audiences.

What saved the cinemas was Jaws and Star Wars. "High concept" films aimed at general audiences, coupled with Lucas's decision to force cinemas to upgrade their sound systems, got the audiences back.

But that's strictly limited as an approach to keeping theaters open. If those same movies that have been keeping cinemas open for the last three decades are suddenly available outside of the cinema without delay, and if the high quality sound and picture are available in people's homes, then yeah, people are going to forget about the cinemas.

It's easy to complain about high popcorn prices, but there are two issues there. First of all, cinemas aren't making that much money right now. They make very little from the ticket prices - prices for the tickets for the first week or two of admissions actually, for the most part, go to the movie makers. Pretty much all the serious revenue - the revenue used to pay the rent, to pay for the upkeep, to pay the projectionists, et al, comes from the concession stands. Sure, the theaters could reduce the concession prices, but they'd have to make up for it somewhere else, like higher ticket prices. Given you can easily opt out of buying pop-corn, it's questionable whether anyone would be better off under this regime.

The second is that it doesn't matter. If you can get just as good a movie watching experience without leaving your home, why would you bother going to the theater, even if tickets for you and your friends end up costing the same as the PPV charge you'd pay your satellite, cable, or Internet-download, operator? What can the theaters offer you that your (lower cost, same experience) equipment doesn't?

Right now, the only advantage the theaters have is the fact they can show you the movie six months ahead of everyone else. Whether this is good or bad for consumers is open to question - it's probably good, ultimately, because those that can afford it end up paying more (by going to see the movies first) than those who can't, who get to pay less by waiting until it comes out on a cheaper medium.

I'm surprised, for that reason, Hollywood really wants to do this. I think the current model maximizes both their revenues and their audiences fairly well.

But yeah, cinema quality video coupled with cinema quality audio in people's own homes is likely to kill cinema if the exact same content comes out at the exact same time. The only thing that sells cinema in any serious way is that they get the content first. Their audiences will shrink to a tiny fraction of what they are today if they don't have that advantage.