Theater Association Breaks Silence on Proposed "Screening Room" Product

Over the last week the film industry has been buzzing about a potential new program called "The Screening Room" and on Thursday a big player in the game made its presence felt. "The Screening Room" would allow consumers to stream new movies day-and-date into their homes for a $50 fee, plus the cost of a specialized box (for $150). The service, co-created by Napster's Sean Parker, has divided Hollywood.Movie chain AMC (NYSE: AMC) has signed a letter of intent to partner with the service and a number of studios have expressed interest. However despite those potential alliances (as well as a dozen top directors), on Wednesday, the National Association of Theater Owners (NATO) made it clear the organization was not on board. The reason why Screening Room even got support in the first place was because of the pricing model. Under the breakdown the studios and the theaters would be cut into the profits to make up for any decline in brick-and-mortar revenue. The problem is that it is still take consumers away from theaters and the theaters experience, which even if some of the financial elements were covered, the traditional model would take a hit. NATO contends that if a venture like this was to come into existence then it should be owned and operated by the theaters and studio, not a third party. Paired with the current "windowing" issue that is being challenged by Netflix (NASDAQ: NFLX), the theaters are seeing their way of life severely impacted. With CinemaCon slated for next month investors in any theater chains and large-screen formats need to keep an eye out for more news as this is a battle that's not going away.