Steven Spielberg: Film Industry Implosion Lies Ahead

Steven Spielberg speaks to CNBC's Julia Boorstin on the future of film and technology.
Emily Sims | CNBC
Steven Spielberg speaks to CNBC's Julia Boorstin on the future of film and technology.

Steven Spielberg and George Lucas, two of the biggest filmmakers of all time, expect some massive upheaval in Hollywood as the division between TV and film content disappears. Spielberg even forecast that the film industry would "implode."

Both see changes in the way movies are made, the way content is distributed and to the business itself, they said during a panel discussion at University of Southern California's School for Cinematic Arts, where they are board members.

But Spielberg also said that it's like 2008 in the business again, with the market bottomed and on the way up. There has never been more exciting potential, he added.

Spielberg and Lucas expect consumers to watch more content, including movies and TV shows, on giant screens at home, as the separation between TV and film content disappears and theatrical releases are limited to fewer, big-budget films.

"There's going to be an implosion where three or four or maybe even a half-dozen mega-budgeted movies go crashing into the ground, and that's going to change the paradigm again," Spielberg said.

Lucas predicted that the movie-going experience would become more of a luxury.

"You're going to end up with fewer theaters, bigger theaters with a lot of nice things," he said. "Going to the movies will cost 50 bucks or 100 or 150 bucks—like what Broadway costs today, or a football game."

He forecast that the movies that do make it to theaters will stay for a year, similar to the run of a Broadway show.

The two joked that they barely got their films "Lincoln" or "Red Tails" into theaters. Spielberg ribbed his friend that more people saw "Lincoln" than saw Lucas' "Red Tails" but admitted that it was a close call, adding that the presidential biopic almost ended up on Time Warner's HBO.

In the future environment, neither of those films would have made it into theaters but would have been available instead on the big screen in people's living rooms, in a new video-on-demand paradigm, they said.

In a building full of high-tech tools to help the next generation of filmmakers tell stories, Spielberg and Lucas had warnings for students.

First, technology should never be in the driver's seat, because the narrative is always the most important thing, they said.

"There is going to be a day when the experience is going to be the price of admission," Spielberg said. "What I fear about that day coming is that the experience will trump the story or the ability to compel people through a narrative. And it's going to be more of a ride, a theme park, than it is going to be a story, and that's what I hope doesn't happen."

He doesn't want movies and TV to become too interactive. The best movie experiences are ones "where we lose control, and the movie and the images and the excitement is washing over us," Spielberg said.

But he seemed optimistic about entertainment's potential to be immersive. "We will be literally inside the experience, so the imagery will envelop us," he said. "You won't even sense you are in a chair. ... You'll totally be ... enrapt and drowning in images, and that is going to happen someday."

Both passed the buck on another Indiana Jones movie. Spielberg said Lucas is the boss and that Indy's future lies with him.

"I'm happy to direct for George," he said. "If George decides to make another one, I'll be happy to shoot it."

Lucas countered that he didn't hold the power, saying that Lucasfilm President Kathleen Kennedy will make the call.

"I'm just a lowly writer. I mean, I won't even be a writer—I'm just the guy that comes up with the story," he said. "And I've been working on a story. You know the issue is that now it's owned by Disney and Paramount, and I don't know how they're going to work that out."

—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin