WEST HOLLYWOOD (California) • Mr Fred Rosen, the retired Ticketmaster tycoon, was eating a melted ham-and-brie sandwich at the exclusive San Vicente Bungalows and spouting forth about belts.
Yes, what people use to hold up their pants. You can buy one at a Walmart store for US$4 (S$5.40), he noted. Or you can get one at Gucci for US$1,500.
"Every product I can think of has a luxury version, which got me thinking," Mr Rosen said. "Why not movies?"
It is an idea that has captivated one entrepreneur after another over the years: For a high price, allow tech billionaires, Wall Street titans, professional athletes, Russian oligarchs and other ultrawealthy people to rent movies - as soon as they come out in theatres - for viewing at home. Think of it like Netflix for 1-percenters.
But such upstarts have always sputtered, including one backed by electronics retailer Best Buy in 2013 that charged US$500 a movie on top of US$35,000 in set-up costs. Film studios, fearful of angering theatre chains, have been reluctant to participate. Piracy has also been a concern.
Mr Rosen, 75, and a septuagenarian golfing buddy, Mr Dan Fellman, who is Hollywood's foremost film distribution expert, may have finally figured out how to make it work.
They have quietly founded Red Carpet Home Cinema, which rents first-run films for US$1,500 to US$3,000 each. Red Carpet has contracts with Warner Bros, Paramount, Lionsgate, Annapurna and Disney's 20th Century Fox and Fox Searchlight divisions - resulting in about 40 movies annually, including blockbusters such as Aquaman (2018) and A Star Is Born (2018).
Those partnerships reflect entertainment-industry relationships that Mr Rosen and Mr Fellman have cultivated over decades.
Most studios do not see them as disrupters from Silicon Valley, something that has stalled start-ups such as Screening Room, which has tried without success since 2016 to speed first-run movies to homes for a premium price.
Red Carpet also arrives at a time when the movie industry is undergoing sweeping change - not the least of which involves the manner in which Netflix is challenging the traditional way films are released.
For the most part, theatre owners insist on a three-month period of exclusivity to play new films. Netflix has started to chip away at that practice, offering theatres an exclusive window of three weeks or less for films such as Roma (2018) and Bird Box (2018).
Most studios see broader distribution change as inevitable, noted Harold L. Vogel, author of the textbook Entertainment Industry Economics. "Consumers want to have more control," he said.
Even so, studios are treading carefully. None of the film companies that have signed on as Red Carpet partners would discuss the venture publicly. Several major movie operations, including Universal, Sony Pictures and Disney's other labels, are Red Carpet holdouts. They also declined to comment.
"I feel pretty comfortable that we can gain more studio partners," Mr Rosen said. "We are a niche offering - I'm too old for disruption - but even if a studio makes US$25 million to US$50 million annually from us, that's found money."
Theatre owners, in the meantime, seem to be taking a wait-and-see approach to Red Carpet.
"I have no take on that," said Mr Adam Aron, chief executive of AMC Entertainment, the dominant theatre chain in the United States. In contrast, he has readily criticised start-ups such as MoviePass, the subscription ticketing service.
The folksy Mr Rosen, who took over ticket sales and distribution company Ticketmaster in 1982 and helped turn it into a goliath, and Mr Fellman, who started his studio career in 1964, worked out details for Red Carpet over rounds of golf.
The luxury service operates a bit like a private club. There is a rigorous application process and participants must have a credit card with a limit of at least US$50,000. Those who become customers must buy a US$15,000 box that connects to a home theatre system (installed by a technician) and comes loaded with piracy protections.
Prices for rentals are set by the participating studios, with higher fees for blockbuster-style movies such as Shazam! (2019) and lower costs for dramas like The Shape Of Water (2017). Each rental allows for two viewings in a 36-hour period.
How big could Red Carpet get? There are more people who can afford it than one might think. Nearly 46,000 Americans have annual income of more than US$2 million, according to the US Social Security Administration data from 2017.
Mr Rosen and Mr Fellman, however, insisted over lunch last month that they were not interested in size. "We're not even looking for 10,000 people," Mr Rosen said. With fewer than 4,000 customers, Red Carpet could have US$300 million in annual revenue, according to Mr Fellman's projections.
Red Carpet, which counts Ms Sherry Lansing, former chief executive of Paramount, as an investor, has been operating in about 25 homes as part of a beta test since December.
"I'm recommending the service to my friends," the Red Carpet website quotes Ms Lansing as saying.
Mr Fellman added: "I'm not interested in starting a business that is disruptive to the theatrical experience. Maybe we get 400 homes in New York and Los Angeles. Maybe 100 in each of the 30 biggest cities in the US.
"We told studios, 'You set the terms.' They appreciated that. What doesn't work in Hollywood is going in and wagging a finger and saying, 'This is how it's going to be.'"