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Peter Jackson Thinks Screening Room Will Inject Billions into the Film Industry

"The Hobbit: The Desolation Of Smaug" - Los Angeles Premiere"The Hobbit: The Desolation Of Smaug" - Los Angeles Premiere
Director Peter Jackson.Photo by Jason LaVeris—FilmMagic

Napster co-founder Sean Parker’s proposal to sell first-run movies to home viewers at $50 a pop has stirred up various corners of Hollywood, with big movie studios and theater chains up in arms over the Screening Room idea while multiple major filmmakers have landed on opposing sides of the argument.

The concept behind Parker’s Screening Room targets consumers who have grown accustomed to staying at home to view the growing amount of available streaming content rather than shelling out for a trip to their local movie theater. Screening Room would allow users to rent new movies immediately upon their theatrical release to stream at home through a $150 set-top box. Each movie rental would cost $50 and last for a 48-hour rental period. The startup would split the proceeds between exhibitors and studios while Screening Room would take only about a 10% cut itself.

One director in favor of Parker’s potential industry-disrupting startup is Peter Jackson, the Academy Award-winning director behind The Lord of the Rings and The Hobbit series.

Jackson is one of multiple directors who have publicly backed Parker’s Screening Room, including JJ Abrams, Steven Spielberg, and Martin Scorsese. Others, like Avatar director James Cameron and Interstellar‘s Christopher Nolan, have argued that the startup threatens the health of the movie industry, which turned in a record year in 2015 in terms of overall box office gross. However, while box office numbers increased, the number of actual ticket sales declined by roughly 300 million from the all-time high of 2002 to 2014, with theater chains regularly raising ticket prices to make up the difference.

Speaking to Deadline, Jackson said that the movie industry is currently “dying, slowly” while arguing that Screening Room could help the traditional movie industry add a new, healthy revenue stream by tapping into the demographic of consumers who are already eschewing trips to movie theaters. Jackson told the publication that Screening Room could create an additional $8.5 billion in annual revenue for studios and exhibitors, assuming that 20 million households join Screening Room and then rent 12 movies per year on average. He added that the extra revenue would wind up as a boon to filmmakers, with studios investing more money in film budgets and making more movies overall.

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The director went on to tell Deadline that the startup’s surveys of various consumer demographics have been telling, as most people in Screening Room’s “non-target audience”—people who already regularly go to theaters—said they would not be interested in the service. That means, Jackson argued, that Screening Room would not prevent a significant chunk of moviegoers away from theaters. However, Jackson continued: “We asked the same question to our target audience; the people stuck at home, the 25-39 year olds. And 70% said ‘yes’ they would spend $50. This is what persuaded me.”

Parker and Screening Room co-founder Prem Akkaraju are working to win over some of the startup’s detractors in Hollywood. AMC, one of the country’s largest theater chains and a subsidiary of China’s Dalian Wanda Group, has reportedly signed on in support of Screening Room, though the company’s CEO has been reluctant to go on the record about the startup.