The major motion picture studios are being sued in Europe by EU anti-trust investigators. Before you start dancing the quick step and yelling well it’s about time, dig into what it means.
The studios — Walt Disney Co., NBCUniversal, Paramount Pictures, Sony Pictures Entertainment, 20th Century Fox and Warner Bros. — each face fines of as much as 10% of annual revenues for allegedly entering into improper licensing agreements with Sky UK. Regulators contend the licensing agreements, which require Sky UK to block access to movies and other studio content outside its licensing territory, violate competition rules. The European Commission, the region’s executive arm, sent a so-called statement of objections Thursday to the seven companies. The statement formally launches an antitrust case and comes after an investigation that began in January 2014 following a lawsuit over the availability of soccer broadcasts.
This part of a continued European end game which will most likely see the end of territorial markets in Europe but instead will result in further media centralization and a demand for higher levels of European content.. The bad news is that the movie studios will have to juggle both open access and rules such as France, where television cannot play American theatrically released feature films. The market will become more centralized, probably with players like German Media Giants like Constanin.
Smaller satellite systems will fail or will be consumed. Media monoliths will emerge which will not be terribly friendly to American studios.
The studios will react by looking at both China and India to take up the business slack created by the European powershift. Losing Europe could mean a reduction of up to 40% of the market revenue. Films will be made that no longer have an American skew but appeal to wider base. The domestic business will begin to slip further. Hollywood will make a move that the theatres have long feared.
They will attempt to move on a full bore deployment of day and date. The majors will try to fight it but both AMC and Regal have their own anti-trust dilemma. With the quick departure of AMC Theatres President and CEO Gerry Lopez , the writing is appearing on the wall, that an anti-trust ruling will come down against the majors. It is an odd time to be a theatrical exhibitor.
The MPAA has already canvassed most major IP (internet) network operators. Often making an appearance to familiarize themselves with the operation. Day and date is coming , and coming fast.
The brutal result of all this machination is that movies are quickly becoming a commodity and less of an art. The studios will abandon the myth that they are movie producers but in fact finally admit they are just cable operators. Europe, long a fountain of riches for Hollywood shall dry up. China and India will prove unstable and rife with corruption.
The problem is, in all of this there is dog nipping at the heels of the studios. OTT or over the top content relies only on the internet to be delivered into the home. Services like Netflix and Amazon are pioneers in this form of delivery. There are hundreds of burgeoning services just coming over the horizon. We are in a total ball of confusion……and it does not look promising.
There is new model for theatrical exhibition evolving which is proving very successful in large metro markets. A new kind of exhibitor coming to the forefront, that is not impacted by day and date. Showmanship is making a return.
And you know what the savior is for the theatrical exhibition industry is……..The American Drive-in. Stay Tuned