The current situation of the COVID-19 pandemic has created a serious impact on the theater business. And because of lock-down and social distancing, and all over the globe, the US $40 billion business has shut down. The Virtual Cinema Model can be a big breakthrough now and become a viable business for distributors and cinema theater companies.
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The Virtual Cinema Model (VCM) consists of a digital platform where distributors or theater companies upload their content and customers pay for each piece on video on demand (VOD) content. Users can purchase the content after signing up for an account. The purchase enables the user to view the movie any time afterward in the library section. There can be two ways through which the users get access to the content. Firstly Electronic Sell Through (EST) in which upon purchase the customers get full access to the content theoretically for an infinite period. The second pathway to access the content is through the Download to Rent (DTR) where the users get access for a limited time upon renting. Once licensed for viewing, the content can also be downloaded for offline viewing. However, Digital Rights Management (DRM) enforces restrictions and prevents users from making illegal copies and sharing content available to them.
As the lockdown continues and even afterward the social distancing would not let cinema theaters to get back on the track at least for some more time. Thus there is a need for an alternative to keep this sector working. Therefore the VCM has great potential to sustain in the market and add on an alternate source of revenue collection.
The future of the model even after the current circumstances is very bright. In the last few years, significant developments have been taking place in the field of video streaming. As per Video Advertising Bureau (VAB), the total number of connected video devices in the US has reached over 820 million. Around 26% of the streaming media player users downloaded the online rented video whereas 25% amongst them downloaded the online purchased video.