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Steven Spielberg on Wednesday predicted an "implosion" in the film industry is inevitable, whereby a half dozen or so $250 million movies flop at the box office and alter the industry forever. What comes next -- or even before then -- will be price variances at movie theaters, where "you're gonna have to pay $25 for the next Iron Man, you're probably only going to have to pay $7 to see Lincoln." He also said that Lincoln came "this close" to being an HBO movie instead of a theatrical release.

George Lucas agreed that massive changes are afoot, including film exhibition morphing somewhat into a Broadway play model, whereby fewer movies are released, they stay in theaters for a year and ticket prices are much higher. His prediction prompted Spielberg to recall that his 1982 film E.T. the Extra-Terrestrial stayed in theaters for a year and four months.

The two legendary filmmakers, along with CNBC anchor Julia Boorstin and Microsoft president of interactive entertainment business Don Mattrick, were speaking at the University of Southern California as part of the festivities surrounding the official opening of the Interactive Media Building, three stories high and part of the USC School of Cinematic Arts.

Lucas and Spielberg told USC students that they are learning about the industry at an extraordinary time of upheaval, where even proven talents find it difficult to get movies into theaters. Some ideas from young filmmakers "are too fringe-y for the movies," Spielberg said. "That's the big danger, and there's eventually going to be an implosion — or a big meltdown. There's going to be an implosion where three or four or maybe even a half-dozen megabudget movies are going to go crashing into the ground, and that's going to change the paradigm."

Lucas lamented the high cost of marketing movies and the urge to make them for the masses while ignoring niche audiences. He called cable television "much more adventurous" than film nowadays.

"I think eventually the Lincolns will go away and they're going to be on television," Lucas said. "As mine almost was," Spielberg interjected. "This close -- ask HBO -- this close."

"We're talking Lincoln and Red Tails -- we barely got them into theaters. You're talking about Steven Spielberg and George Lucas can't get their movie into a theater," Lucas said. "I got more people into Lincoln than you got into Red Tails," Spielberg joked.

Spielberg added that he had to co-own his own studio in order to get Lincoln into theaters.

"The pathway to get into theaters is really getting smaller and smaller," Lucas said.

Mattrick and Spielberg also praised Netflix, prompting Boorstin to ask Spielberg if he planned to make original content for the Internet streamer. "I have nothing to announce," said the director.

Lucas and Spielberg also spoke of vast differences between filmmaking and video games because the latter hasn't been able to tell stories and make consumers care about the characters. Which isn't to say the two worlds aren't connected. Spielberg, in fact, has teamed with Microsoft to make a "TV" show for Xbox 360 based on the game Halo and he is making a movie based on the Electronic Arts game Need for Speed.

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Interesting stuff. Price variance for different movies... would that really work, I wonder? Even a mega budget movie can flop, if the tickets cost twice as much as everything else wouldn't that just make the flops flop even harder? Plus, what price the studio or theatre set for admission would be a tacit admission of their expectations for the film's popularity.

Long runs at the cinema for movies is something I'd actually welcome. Ian and I have often missed seeing a film because it is in one week and out the next.

Even at prices at $10.50 a ticket here makes people wait for the movie to come out on DVD. Only the big budget, SFX heavy movies are worth watching.

Hardly anyone I know goes to a theater to go see a comedy or a love story. Those movies you don't need to see on a big screen.

Staying in the theaters longer won't hurt DVD sales though. So I do not see a problem here. I mean look at Star Trek Into the Darkness, the movie came out in May and then its be released in August on DVD. Very short timeframe.

I agree, the implosion is likely to happen, but thats because of continual crap and paying high prices for said crap.

Also, movies are in theaters for ridiculously short times (my guess is because of the oversaturation of the market, so many movies keep coming out). This is why first weekends are so important. If you look at the older movies that are box office hits, their first weekends are nowhere near what we get now.

Cinema prices here have doubled or tripled in just a few years. I used to go to the cinema every week, and now I go rarely due to the cost.

I can definitely see it happening. Those big-budget blockbusters need insane numbers to even break even, let alone justify a profit.

Seems to me that a breaking point of some kind is coming.

Big budget megafilms are just getting more and more expensive. Approaching a $200 million budget is now quite common. And these films are largely sold on special effects and spectacle. But the audiences are less and less impressed with spectacle. We're in an age when literally anything can be put on screen... but the consequence of that is that it's virtually impossible to "wow" people by putting something on screen that they didn't think could be done.

So they're plumbing every old property they can find, because they come with a built in fan base. But are there are only so many movies you can make of old TV series and old board games and old amusement park rides before people will get fed up with it? And can you really keep rebooting the same franchises every ten years or so? Another Spider Man? Another Batman? Is that the future of hollywood?

100% agreed, Graham. It's gonna collapse under its own weight. Almost not a question of if, but of when.

I was thinking about that the other day about Pacific Rim bombing because of a $190 million budget. These movies are getting too expensive and people do not want to go see movies if it means they spend $100 just for their family to go. I'd rather fill my car up.

I know certain movie theaters are being gimmicky now. Like popcorn and soda vending machines and then pay at the counter. Same theater also has leather reclining seats. Halves the amount of people who can see it but everyone would love to sit in that over those horrible old school theater seats.

A lot of films arw made with the idea that merchandising will cover costs as well, LOTR has made more monez post cinema than in it, and it made over a billion in the cinema.

Oh yeah, McAvoy. i always go to matinee because of the simple cost of the damned thing.

A. Stop putting out crap. just because someone wrote a script it does not mean that you have to make it into a movie.

B. Hire actors that don't suck. George, there is a reason that Jake Lloyd has not been in anything since E1. You guys tried your best to shove Hayden Christensen down our throats before you finally gave up. The industry tried to make people think that Megan Fox was a leading star. The industry tried to make people think that Kristen Stewart could act... at all.

Scripts worth making and actors that can actually act = product that people will want to pay to see.

The movies are going to crash and burn. They're in the same spiral the video game industry is. Budgets are going completely out of control. In no rational universe did The Lone Ranger have a prayer of breaking even. It was just not going to happen, even if it wasn't complete shit. Pacific Rim is having to rely on international sales to break even on its budget. Movies costing a quarter billion dollars to make are becoming common and with the highest grossing movies ever usually making around the half billion mark you have to wonder what people are thinking. The same thing's going on in the gaming industry. Games like Tomb Raider, Resident Evil 6 and others that are selling millions of copies are considered flops because of the ludicrous budgets spent on them. Dead Space 3 needed to move five million copies just to break even. 5 million copies of a $60 game.

Those ludicrous budgets are also hampering creativity. When you need a run away smash just to break even you can't take a risk, you can't think outside the box. You have to go for the guaranteed sure thing. Part of the problem of course is that neither the movie industry nor the gaming industry seem to be able to comprehend what's a sure thing. EA managed to kill Sim City through it's mass market tone down. Same thing with Dead Space, horror game? Haha, fuck that, cover shooter. The Lone Ranger? Johnny Depp as Tonto... wait... what?

With the movies they have another problem, big screen TV's, surround sound, and their own ridiculous prices. For me, just me, to go to Pacific Rim cost over $20 and all I got was a coke. In a couple months I'll be able to buy the Blu-ray for that or a bit more. Most movies don't need to be seen in the theaters. Lincoln, specifically called out in the article? What's there to see in it that really requires a theater? Your average Drama, comedy, romance? Does a big screen make the actors better, the jokes funnier, or the love cornier? Nope. The only reason to go to the theaters is for the big spectacle laden action movies and if you've got a 50"+ TV at home with surround sound even that's kinda reduced. Personally the wife and I just don't got to the movies hardly at all anymore, and if we do it's for action movies. The reason is simple, the two of us, once you factor in a sitter, will have to drop $60 to $70 on a trip to the movies. That's two or three Blu-rays easy. 15 or 20 rentals on Amazon Prime. It's just hard to justify a trip to the movies anymore.

On it's current trajectory the movie industry is simply not sustainable. Neither is the gaming industry. They are to the point where budgets are starting to exceed any realistic return expectations and the studios in both industries are not pulling back, they're just doubling down, assuming that Avengers or Call of Duty level sales numbers should be the norm. They're not, and they're not learning the lesson. The only possible outcome is to crash and burn, hard. I think a Japanese style system where the theater releases are little more than extended commercials for Blu-Ray sales that start only a few weeks after release could be how things wind up shortly.

The good news? Not a big deal. The movie industry long ago gave up it's crown on new and original programming. Places like HBO, FX, Netflix, etc. are picking up the slack and making more and better movies and series than most of what the movie industry is. Same thing in gaming, the indie scene is going nuts. Some of the best money I've spent on games in a long line time was the $20 I spent on Minecraft and the $20 I spent on Kerbal Space Program. If triple A game development died off I doubt I'd notice.

TL;DR, the movie and game industries are rushing hand in hand towards their own doom and we're all going to be better off for it.

I am the same way. I got a really nice 46" LED LCD TV and while the PS3 isn't up to spec anymore with the more top of the line BLU ray players it still gives an excellent picture. My surround sound consists of converted Fender Amps as speakers. So yeah I can blast a movie pretty loud.

I go for only the big SFX movies and not the comedy or drama. The area where my TV does not compare is size and overall feel of seeing a movie in a theater.

Oh and it costs me $5 in gas alone to go see a movie.

I'll go see a movie on the big screen if its something I don't want to wait for, but I always try and go when the theatre is close to empty. I prefer watching a movie at home these days. My own food, 24 inch screen and good pair of headphones and I'm lost in the movie.

It seems inevitable that this will happen the people making the Movies these days have little to no idea of what makes a good film. That and budgets are going through the roof as if any old junk can make it if its budget is large enough.

One interesting idea here in the UK is subscription cinema. Graham and I have had this for about 10 years now. It works much the same way as Netflix. You pay a fixed fee per month and you can see as many films as you want in that cinema chain. When we joined, soon after it was launched, it cost £10/month. Currently, it's only £15/month. That's only a 50% increase over the last 10 years. The only consequence of this is that I've pretty much no idea what cinema prices are like these days. Back in the day it was about £6/movie. I just looked it up and an evening ticket is currently £9/movie. So a similar 50% increase. The cool thing is that we only need to see 2 films a month to break even. That's not a bad deal at all.

Interestingly I'm not sure if that is helping the movie makers or not. At the start they notionally 'charged' £3 for each film we saw. I know this because that is what they put as the price on the till (computer operated). That made me wonder if that was what they paid the film distributers for a film. I'm not sure. I've heard tell that the actual cinema doesn't make any money on the ticket price at all, and that they keep in business by selling food and drink. I've always been doubtful of that concept but I've no way to know.

I think schemes like this would encourage more people to go to the cinema in the first place, however, the quality of the films needs to improve before people will commit to such a scheme. We used to see 5 or 6 films a weekend, and we used to go most weekends. Now we go about once, perhaps twice a month and only typically see two films each time. Still enough to make the subscription worth while, but far less than we used to. The quality just isn't there. The other problem is that the films now come and go so quickly that you will not get enough of them together to make the trip worth while.

Anyway, enough rambling. One funny thing from the article is that Red Tails had difficulty getting into cinemas. From that I can only assume that who ever chooses what films go into cinema have more skill than those who make the films. Red Tails was a truely appalling film.