“전통적 영화관람 모델은 구시대적(outdated)이다.우리는 할리우드를 구원(saving Hollywood)하고 있다.”Ted Sarandos, Netflix co-CEO, said, "The traditional movie-watching model is outdated. We are saving Hollywood."
This was a statement made by Ted Sarandos, Netflix co-CEO, at the TIME 100 Summit held in New York, USA, on 25th (local time).
When TIME editor Sam Jacobs asked, 'Has Netflix destroyed Hollywood?', Sarandos replied, "No. We are saving Hollywood," adding, "The decline in box office attendance indicates that consumers want to watch movies at home."
Sarandos further stated that he loves theaters but does not "care" about the decline of cinema.
Instead, he added, "If the industry forces viewing in a way that it wants rather than how audiences want to watch movies, the film industry will no longer exist."
The head of a global media giant sparked the theory of the 'end of theaters' in a public setting.
The British Guardian assessed this statement as "clear evidence that the global film market has completely tilted towards streaming."
As the speed at which at-home (OTT) services encroach on the silver screen (theater) accelerates, analyses suggest that the traditional theater industry is at a crossroads of existence.
The confidence shown by Sarandos is backed by numbers. Online video services (OTT) like Netflix are organizing annual production schedules around self-produced content following the pandemic (DAEYU).
If they do not fall into so-called 'original' content, even large production company films see a decline in audience exposure. According to Reuters, last year's North American box office revenue is expected to be $8 billion (about 11.3 trillion won). This figure represents a 10% drop compared to 2023 and a 30% drop compared to pre-pandemic 2019.
The studio-style film production environment, which led the traditional film industry, has also frozen. According to the American entertainment industry expert publication Deadline Hollywood, in the first quarter of this year, the number of filming days permitted in Los Angeles (LA), the 'global film production mecca,' totaled 5,295 days, a decrease of 22.4% compared to last year. In particular, the number of days for filming feature films decreased by more than 29%.
Traditional theater chains have long been trimming their size. Cineworld, which operated over 100 chains in the UK and Ireland, is undergoing a restructuring process after filing for bankruptcy protection due to a liquidity crisis.
PVR INNOX, a key player in the Indian film market symbolized by 'Bollywood', also saw its net loss double in the first quarter of this year. In Japan, while Netflix subscribers exceed 10 million, traditional theater audience numbers showed a double-digit decline. America’s largest theater chain AMC announced in its financial results this year that "first-quarter audience numbers dropped 12% compared to last year."
Despite the OTT assault being anticipated for years, the reason traditional film industry leaders crumbled helplessly is complex.
The Wall Street Journal (WSJ) pointed out that these entities failed to break away from the traditional blockbuster-dependent model. Major theaters relied on a few Hollywood blockbusters as they entered the multiplex era. If these productions were delayed or failed to perform well, it immediately impacted their revenues.
As OTT services armed themselves with personalized viewing experiences and convenience, theaters were criticized for alienating audiences with outdated facilities and limited content.
Entertainment media outlet Variety analyzed that "even strong consumer bases like India (Bollywood) and France with a solid foundation of art films could not escape the OTT onslaught," noting that in India, theaters could not withstand the cheap data fees and the proliferation of smartphones.
France has established a strong domestic film protection policy and a support system for art films, such as the screen quota system. However, as viewing behaviors began to change, especially among younger generations, it became difficult to sustain the film industry solely with government subsidies.
According to the French National Film Center, the production cost for a French film is about €5 million (approximately 8 billion won). This is modest compared to the high-budget OTT content, which invests $30 million (approximately 42 billion won) in a drama.
Theaters cornered at the brink are aiming for a turnaround through an 'experience revolution.'
Consulting firm PWC emphasized that traditional theaters should expand high-end screening rooms (PLF), such as IMAX or Dolby Cinema, to provide differentiated experiences that cannot be enjoyed at home.
Introducing high-quality food and beverage (F&B) services, live broadcasts of concerts and sports events, and special programming such as game events have also emerged as survival strategies.
France is pushing forward with the 'Cinema 2030' project led by the government. This project aims to increase subsidies for local theaters and introduce virtual reality (VR) screenings and interactive experiences to target young audiences. In India, PVR plans to strengthen fan meeting events with Bollywood stars.
John Harrison, a media expert from global consulting firm Deloitte, advised in a report that "to survive, cinemas must evolve beyond mere screening spaces into complex cultural spaces."