The success of the distribution of the movie “Trolls World Tour” has made the headlines of many newspaper, It has generated more revenues (over 100 million$) to Universal than the first movie, a hit in 2016, did during the first 5 months in movie theatres.
The harsh protest by the AMC stating that AMC theatres in the US will no longer show Universal movies in retaliation of having been cut out from the Trolls distribution also made the headlines.
What we are seeing is the replica of what happened to the music world as musics used internet as the main distribution channel (first as an additional channel but it rapidly became THE distribution channel). Notice that we have had music “pirated” via Internet (and before through physical copies) well before the iTunes age but there lies the disruption. Until the distribution was illegal the rules of the game did not changed. The Digital Transformation, that is the changing of business models, hit when the distribution over internet stores became legal. That changed the music industry, and led to more people listening to music as well as to the shrinking of the market value (plus the disappearance of CDs and the like that further decreased the ecosystem value) and the emergence of new players along the disappearance of previous ones.
People have got Trolls directly from Universal (using the AppleTV platform) for 19.99$, a tad more expensive than watching it in an AMC theatre (but not that much once you consider the petrol and time wasted to go to the theater, and definitely cheaper if there were two of you watching it, most likely the case). Universal, in turns, by going direct to consumer and skipping AMC generated more net revenues.
Now, we have been saying that the user experience does not compare. At the theatre you get a big screen and it gives you a sense of immersion that you can’t get at home. True, but the situation is changing. Television screens are getting larger and larger (I am receiving more and more advertisement from Sony, Samsung and the likes to get their latest 75″ and larger screens in these weeks. They are probably sensing that by being forced at home I might feel the need for better entertainment…).
It used to be that the larger the screen the further away you needed to be from the screen (a rule of thumb was 5 times the diagonal, if you were among the lucky guys who could afford a 27″ CRT you had to watch it from 3m -10′- away), but that was in the 90ies. With HD television the rules changed and they changed even more as we move to 4k and 8k (see the graphic).
The change is because of the resolution of the screen. The bigger the screen the further away you have to stay BUT the higher the resolution and the closer you have to be for perfect viewing. So with a 75″ HD screen you have stay between 3 and 4.5 meter (8′ to 12′) and with a 75″ UHD (4k) screen you have to watch from 1.5 to 3 meter (5′ to 10′). Whereas in the last century we had the problem that a large screen would not fit in our living room (it was “thick” and we had to stay far away from it) now the only issue is to find a wall large enough to accommodate it (and sometimes to get close enough to appreciate it).
An interesting twist is that the larger the screen gets (keeping fixed the distance you are watching it) the larger the view angle. Our eyes have a field of vision that is about 124° on the horizontal plane and 110° on the vertical plane (70° downward and 50° upward). Our brain horizontal field of vision is broader, close to 170° thanks to the eyes saccadic movement. Now, the field of view is crucially important to deliver the perception of being inside the scene. Take the IMAX theatre where you are placed close to the screen and the screen is very large: it feels like being there. The movie theatres trick our brains by keeping the whole ambient dark so that what our brain actually perceive is just the screen and that limits the saccadic movement to the illuminated part. It is not as good as an IMAX but it may get close (panoramic screens are even better because they create a larger field of vision).
You see, the critical word is “perception”: making the brain feel like it is part of the scene, By having a larger screen at home and getting closer to it we may create this immersion perception (watching in a dark room improves the feeling…).
Popcorns and candies might be missing at home but this is something one can take care of. Friends might be missing but again if you have a spacious living room (likely if you have bought a large screen) then you might have your friends joining you…
I am not saying that once the epidemic is over we want be going to theatres to watch movies, but clearly the longer the lock down the more we will get used to watch prime movies at home. It may also well happen that I may have the itch to watch the latest movie and I do not have the time to go to a theatre whilst I can surely find two hours to watch it at home…
Besides, if movie producers will make more money by going direct to the consumers they most likely will.
I discussed this news because it is just another point in case of the upside and downside of the Digital Transformation and evidence of the abrupt adoption caused by exceptional circumstance, like this epidemic. Because of it companies are forced to explore new ways to reach customers and going through the cyberspace wherever possible is a no brainer. Yet, this shift to the cyberspace kills market value and affects those players that made a living out of that lost value.