The following is the first in a projected series of posts re-imagining the entertainment industry for a digital age. If it ever becomes a book, the title will be Hollywood 2.0.

The other day I asked myself what would happen if you tried to fit film distribution into the model that is emerging for music distribution. Put aside the things that aren’t comparable between the two. We already know the studios are watching what is happening with the music industry very carefully, and there have to be at least a few lessons that can be learned by drawing parallels.

So indulge this science-fiction for a moment. Let’s draw a parallel between the CD version of an album and a DVD version of a film. Both were the dominant mode of distribution in their respective industries. Recently, DVD sales have started falling — just like CD sales did a few years ago. Digital sales of music haven’t made up the difference, perhaps because a digital version of the music has less perceived value. It lacks ‘scarcity,’ that buzzword du jour.

Matching the Music Model

So where has the music industry gone? The trend seems to be toward making the music free or cheap, and making money on concert tours and merchandise (t-shirts etc.). This has actually been good for some artists, who were never making much money off CD sales (the record labels — the movie industry analogue would be the studios — were taking all that profit) and always made a living from concert tours.

If you take concert tours to be analogous to theatrical distribution, you see where film distribution differs most from music distribution. Right now, theatrical distribution is a loss leader. Most movies don’t make money until they come out on DVD and are sold to television. But that model is now broken. DVD sales are trending down; television advertising is trending down.

Abandon ship, right? What is the model that’s on the upswing? Well, online advertising/cable t.v. are doing okay, but they don’t make enough to replace the loss. One of the things I took away from reading Chris Anderson’s Free is that the film industry may never make the same profit it once did. It could just simply contract and stabilize at a smaller size. Less money = fewer distributors = less content = fewer professional content creators.

That’s a frightening proposition for everyone in the industry, even indies. But what if this model that music is settling on could be modified to work for movies?

a picture of an old television, flipped upside downMovie Distribution in Bizarro World

As I said, indulge me, because this is going to sound wild. What if you released your movie streaming online, then for download — going to the t.v. through people’s box of choice — then on DVD/Blu-ray and, finally, in theaters? Why reverse the current model and take the ultimate movie experience off the table until people have had a chance to sample other versions free or cheap? That’s crazy, right? Can’t you charge more for the theatrical experience?

Exactly. Looking at our friend the music industry, a concert ticket is $100 for a major act. To see a movie you love in 3D on a big screen with other people who love the movie, for one week only perhaps — what would you pay? If U2 fans will fill a stadium paying $110-$200 a pop, why not fans of Will Smith?

If you consider what makes theatrical distribution a loss leader is the cost of advertising, why not reverse the cycle and make the other distribution formats the advertising (much cheaper) and build to theatrical events? You could theoretically have so few screenings (such scarcity) that the filmmakers or actors could tour around the country with it, making personal appearances. You wouldn’t have to shell out for the theatrical tour until you knew, from statistics on download and home video sales, that the movie had a sizable audience (and you would also have geographical stats, so you could tell where the highest concentrations of those fans were).

The infrastructure for theatrical screenings currently exists. Most money is already made in shorter and shorter windows, theatrically. Why not exploit it? It’s a scarcity that the digital revolution has left untouched.

And, while we’re at it, let’s take another lesson from the music industry. Why are studios and distributors charging the same price for every movie? The music industry fought iTunes and won the ability to charge more for hit songs than filler tracks. Why not charge more for a hit movie than a dud? Why not charge more for a known quantity in a major venue? Indie band in a small venue = indie movie in a small venue.

Variable pricing would also have the advantage of making movies that don’t have recognizable stars more competitive theatrically. If the ticket for the Harrison Ford movie was four times more expensive than the indie darling, you might take a chance on the cheaper movie — or expect Ford not to phone in his performance.

This is all just idle speculation, of course. The studios and big theater chains would never go for it. Audiences are too conditioned to thinking of the movie theater experience as costing $8-$14 a ticket. It would take some kind of econopocalypse to allow for a change this massive. Still, it may be that the music industry, which has always had the theatrical experience as the premium, will, when the dust settles, actually have undergone less radical a change than the movie industry. Time will tell.

John Ott is a writer, filmmaker and futurist. Become a Facebook Fan here or follow him on Twitter here.

Image credits: Roman theater image adapted by J. Ott from “roman theatre, bosra, syria, easter 2004” by seier+seier+seier. Used under Creative Commons Attribution 2.0 license. Television image adapted by J. Ott from “Television” by dailyinvention. Used under Creative Commons Attribution 2.0 license.

MORE HOLLYWOOD 2.O:
The New Minimum Budget
Distribution Windows: The Force of Gravity
Why Failure is an Option

UPDATE 4 August 2015: Changed out the theatrical-as-loss-leader link since the original linked article has disappeared.