Before the coronavirus shut down the movie industry in mid-March, the biggest threat to art-house cinemas was people watching movies through streaming services and video on-demand sites instead of going to their local theater.
However, with revenue and concession sales reduced to zero for the foreseeable future, some small theaters have resorted to a surprisingly tech-savvy tactic: showing movies online.
Logan Crow, founder of the Frida Cinema in Santa Ana, is one of dozens of indie cinema owners who have partnered with studios and distributors to create “virtual cinemas” that allow patrons to pay to watch certain movies on the web while audiences are stuck at home. Best of all, the nonprofit Frida gets a cut of the revenue.
“Streaming is certainly not new,” Crow said. “But distributors partnering with art houses to stream movies in a way that supports theaters with revenue certainly is new.”
A growing number of distributors, such as Kino Lorber, Film Movement and Magnolia Pictures, have worked with small cinemas to make their theatrical movies available through the theaters’ websites.
Major specialty chains, including Alamo Drafthouse and Laemmle Theatres, have signed onto the distributors’ plans. New York-based Bleecker Street on Monday joined the trend, saying it will stream its Javier Bardem feature “The Roads Not Taken” by working with theaters, including Bow Tie Cinemas and Cinepolis Luxury Cinemas.
In the innovative arrangement, viewers go to their favorite cinema’s website and pay a $12 fee to watch a film, which is then available for them to view on their computer, phone or smart TV for three to five days, depending on the distributor. That money is split between the studio and the theater operator.
The so-called virtual screenings have become increasingly common amid the coronavirus closures, which have hammered the biggest chains such as AMC and Regal, as well as the mom-and-pop-run bastions of art-house dramas and international fare. Theaters have been forced to furlough or lay off almost all their employees, most of whom are part-time and hourly. Owners hope relief is coming in the form of loan guarantees and small business benefits promised by the recently passed $2-trillion federal stimulus package.
This is putting the power back in the hands of the theater owners
Amid the shutdowns, Kino Marquee, the on-demand system set up by New York-based distribution firm Kino Lorber, has grown to nearly 200 theater locations. The distributor, which specializes in foreign film and indie rarities, has used the program to sell the Brazilian thriller “Bacurau,” Ken Loach’s “Sorry We Missed You” and the horror-comedy “Extra Ordinary.” For the viewer, it’s similar to renting a movie from iTunes or Amazon, but only through a local theater’s website.
“This is putting the power back in the hands of the theater owners,” Kino Lorber Chief Executive Richard Lorber said. “Kino Marquee has basically given them a chance to capture revenues that they otherwise would’ve lost.”
The program provided a much-needed outlet for the makers of “Extra Ordinary,” a paranormal rom-com that features Will Forte as a has-been rock star with a satanic plot to rekindle his fame. The low-budget movie was released in 32 theaters March 6 and had expanded to dozens more before the coronavirus outbreak forced its distributor, Good Deed Entertainment, to pull the plug.
“The film had some nice momentum,” said Kristin Harris, Good Deed’s head of acquisitions and distribution. “We basically just had the rug pulled out from under us.”
The studio, based in Ohio and Los Angeles, teamed with Kino Lorber to put the film out for on-demand viewing last week through theater websites. To promote it, Good Deed also released a video Q&A session with Forte and others in the cast and crew.
Good Deed CEO Scott Donley acknowledged that the virtual cinema is no substitute for the real thing, but the strategy can help studios cut their losses on films that were counting on box office sales. It also allows locals to support their area cinema through a desperate time.
“If we can all help each other survive through this, we’ll all be better for it,” Donley said.
Distributors including Kino Lorber and Film Movement declined to disclose revenue figures, as did theater companies.
Film Movement President Michael Rosenberg, whose virtual cinema program has let theaters screen movies including Polish Oscar nominee “Corpus Christi,” said the sales pale in comparison to actual box office receipts. Cinemas, meanwhile, aren’t just missing out on box office but also on popcorn and soda sales. Yet the costs are generally lower to distribute online, and every little bit helps theaters, he said.
“It’s not enough revenue to offset what the theaters lost by being closed,” Rosenberg said. “But it’s something.”
We’re working with distributors who are also hard hit by this... Let’s face it, they want to see us survive, and vice versa.
Theater operators including Greg Laemmle, president of Los Angeles-based family-owned Laemmle Theatres, said he’s still waiting to see the figures from some distributors, which are themselves small operations with reduced workforces.
He’s optimistic about the system, which he sees as a way to keep Laemmle engaged with its customers while his buildings are closed. Distributors are eager to help indie theaters outlast the pandemic, he said. Art houses not only provide a big-screen platform for smaller movies, but also help promote films.
“We’re working with distributors who are also hard hit by this, and they’re incredibly reliant on the art-house cinemas,” Laemmle said. “Let’s face it, they want to see us survive, and vice versa.”
Austin, Texas-based indie chain Alamo Drafthouse, known for its special events for cinephiles, has taken the concept a step further by adapting its Terror Tuesday and Weird Wednesday repertory series to the new digital realty. Last week the company offered rentals of the 1982 Hong Kong film “Centipede Horror” from its site for $7.75.
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“It’s not just about giving people films to watch at home,” said Alamo Drafthouse programming director Sarah Pitre. “It’s how do we give them the Alamo experience at home.”
The surge in digital viewing comes as some industry insiders worry that the COVID-19-related closures will accelerate the audience’s move to streaming video.
This weekend, Universal Pictures releases DreamWorks Animation’s “Trolls World Tour” on iTunes and other sites for a $20 rental. (None of that money is going to theaters.) Paramount Pictures sold its comedy “The Lovebirds” to Netflix. Last week, Disney said its big-budget fantasy “Artemis Fowl” would skip theaters and debut on streaming service Disney+. SXSW recently announced it would move its canceled film festival online by screening films on Amazon Prime Video.
So is indie cinema’s virtual push a wolf in sheep’s clothing for bricks-and-mortar theaters? Participating operators say they doubt it. Laemmle, for example, is hopeful that the business will eventually return to normal once patrons feel comfortable returning to public spaces.
“Obviously we have an audience that may gain a familiarity with video on-demand,” Laemmle said. “But I think they’ll still consider the theater to be the main source. My hope and belief is that we will return to the basic business model.”
However, the streaming idea may be here to stay for some indie cinemas, even after they reopen.
Crow, the Frida Cinema founder, said his two-screen theater could benefit from the additional revenue stream because he can only show a limited number of movies in the physical building. That means he sometimes has to turn down films for which he wishes he had space. Being able to show movies online could let the theater generate more sales.
“I don’t know that the streaming is going to stop after we reopen,” Crow said. “We might be able to say, ‘Well, we can’t put your movie in our theater, but I can put it on our streaming site.’”