If Napster co-founder Sean Parker's plans come to fruition, the latest movies will be available for viewing from day one in the home via a set-top box. But despite support from big name directors, not everyone is happy. According to a 600 theater chain, Screening Room will only provide quick, quality content for torrent sites.

Last week news broke that having dumped the recording industry on its head a decade-and-a-half ago, Napster founder Sean Parker is now turning his attentions to the world of cinema.

Unlike his now infamous file-sharing service, this time Parker intends to do things by the book, licensing content from its creators and delivering it to the public. However, disruption is still a mainstay of the entrepreneur’s business model, with Screening Room planning to offer day-and-date movies to the masses in the comfort of their own homes.

For a not unreasonable $150, Parker and his associates want to supply a set-top box with the ability to show brand new films for $50 per shot to be viewed once during a 48 hour period. It’s a proposal that has almost everyone excited but in a variety of different ways.

With the studios considering their options and yet to officially weigh in with their verdict, big name names in the industry are being less cautious. Steven Spielberg, Ron Howard, Peter Jackson and J.J. Abrams have come out in support of the plan, verbally and in some cases financially too.

But while momentum builds on the director level, opposition is mounting from the businesses that are most likely to be affected by the project. The Art House Convergence (AHC), a cinema group representing 600 theaters, has just published an open letter concerning Screening Room. AHC are clearly rattled by the proposition and the negative impact it could have on the cinema market.

“The Art House Convergence, a specialty cinema organization representing 600 theaters and allied cinema exhibition businesses, strongly opposes Screening Room, the start-up backed by Napster co-founder Sean Parker and Prem Akkaraju,” the letter begins.

“The proposed model is incongruous with the movie exhibition sector by devaluing the in-theater experience and enabling increased piracy. Furthermore, we seriously question the economics of the proposed revenue-sharing model.”

It’s clear from AHC’s announcement that they see content shown in cinemas as more effectively guarded from potential pirates. Introduce that content into the privacy of the home environment and it will necessarily herald in a whole new world of piracy.

“We strongly believe if the studios, distributors, and major chains adopt this model, we will see a wildfire spread of pirated content, and consequently, a decline in overall film profitability through the cannibalization of theatrical revenue,” AHC says.

“The theatrical experience is unique and beneficial to maximizing profit for films. A theatrical release contributes to healthy ancillary revenue generation and thus cinema grosses must be protected from the potential erosion effect of piracy.”

AHC’s argument develops with what it sees as an undermining of exhibitors’ investment in digital technology, technology that was somewhat forced upon them in the name of piracy prevention.

“The exhibition community was required to subscribe to DCI-compliance in a very material way,” AHC writes.

“Those exhibitors who were unable to make the transition were punished by a loss of product. The digital conversion had a substantial cost per theater, upwards of $100,000 per screen, all in the name of piracy eradication and lowering print, storage and delivery costs to benefit the distributors. How will Screening Room prevent piracy?”

DCI Digital Cinema Specification – Piracy

That question is yet to be answered by Screening Room but if the service is to ever get off the ground, notoriously hard-to-please studios will demand a very clear say in how content is protected throughout the entire process. While digital compliance is certainly not only for theaters, AHC believes that some adopters of Screening Room could simply go back to exploiting the analog hole.

“If studios are concerned enough with projectionists and patrons videotaping a film in theaters that they provide security with night-vision goggles for premieres and opening weekends, how do they reason that an at-home viewer won’t set up a $40 HD camera and capture a near-pristine version of the film for immediate upload to torrent sites?” the chain asks.

Of course, there’s very little Screening Room can do to stop a determined pirate from finding ways to copy their content, but it is entirely feasible for each movie screening to be embedded with watermarks similar to the ones already in place in theaters around the world. Tracing content back to an individual set-top box would then be somewhat straightforward but of course by then the damage would already be done.

But while piracy is one of AHC’s biggest complaints, it all comes boils down to what they see as a huge undermining of their business model through the wiping out of the theatrical windowing system.

“Our exhibition sector has always welcomed innovation, disruption and forward-thinking ideas, most especially onscreen through independent film; however, we do not see Screening Room as innovative or forward-thinking in our favor, rather we see it as inviting piracy and significantly decreasing the overall profitability of film releases,” the chain concludes.

Thanks, David