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Cinema Trade Group Tumbles on Netflix Movie Theatre Deal

October 6
6:00 AM 2016

The tensions between Netflix Inc. and the traditional movie theatre industry has long been known and has always the possible chance to rise on the coming business days.

iPic was founded in 2006 and remains a small but vocal player in the exhibition industry. It offers a luxury experience, complete with fine food, alcohol and special seating, in order to court people who might otherwise stay home. Tickets are somehow expensive, reaching nearly $30 each.

In a recent report and interview on Wednesday, the National Association of Theatre Owners expressed concerns about the streaming giant's plan to release movies online and in theatres at the same time through a deal with luxury exhibitor iPic Entertainment. The agreement would allow iPic to screen Netflix's upcoming original movies in its 15 high-end locations, including New York and Los Angeles.

Such move by Netflix to get theatrical distribution for its growing film business, has been viewed as a threat to the traditional theatrical window. This gives cinemas the exclusive rights to show new movies before they become available for home viewing. Netflix contends the traditional release window is out of step with changing consumer habits. Theatre owners view the windowing model as essential to their business and have long resisted changes to the practice. 

"We all should tread lightly and be mindful that over the years, the film industry's success is a direct result of a highly successful collaboration between film makers, distributors and exhibitors. Simultaneous release, in practice, has reduced both theatrical and home revenues when it has been tried." warned John Fithian, president and chief executive of the association.

Relatively, according to a report, iPic deal is Netflix's first long-term agreement with a theater chain. Nonetheless, under the leadership of Chief Content Officer Ted Sarandos, Netflix has experimented with simultaneous releases in movie theaters before, angering major theater chains in the process.

Cinema operators earlier this year flinched at Netflix's plan to release "Crouching Tiger, Hidden Dragon: Sword of Destiny" in IMAX theaters. Another dispute exploded last year when Netflix announced simultaneous release plans for the critically acclaimed "Beasts of No Nation," which opened in October and was deemed a box office disappointment. Furthermore, the involved association firmly adheres to its stand about the movie industry.

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