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This topic comprises 10 pages: 1 2 3 4 5 6 7 8 9 10
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Author
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Topic: LOOK vs AMC
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 10-22-2014 06:42 PM
quote: Mike Blakesley
This is all about one chain, AMC, trying to corner the market. If both cinemas get the same movies, then everyone else (moviegoers, LOOK Cinema, the studios) benefit but AMC loses out on some ticket sales. The studios will not lose one red cent UNLESS AMC decides to not play their movie in some other locations as "punishment." Thus the only thing AMC has going for it is sheer size.
How many movie-going markets of any significant size does AMC have all to itself? I can't think of any. If AMC wanted to boycott a certain movie in its Dallas-Fort Worth area theaters moviegoers would have plenty of other theaters to visit (SMG, Cinemark, Harkins, UA, etc.).
When I lived in New York I remember movies playing in multiple theaters with some of them not being very far apart. And these weren't big google-plexes either -mostly single screen, twin and 3-plex and 4-plex theaters. That made it even more amazing for the same movie to play at more than one theater location in close proximity.
When all movies were distributed on film I could understand an allocation arrangement or even an exclusive deal with one theater chain over another competing theater. It cost more to put the movie on a lot more screens. With digital it doesn't make any sense for the movie distributor and not for customers either.
Honestly, with digital-based movies the situation over how many theaters are playing the same movie shouldn't be any different than a pay per view company booking the next UFC fight event at sports bars. The more places playing the show is better. In the case of movies the movie will play itself out faster on more screens and get it to home video discs and digital downloads faster. Faster cash flow situation. Big financing loans paid off faster.
If I was running a movie studio the only way I would give a theater chain like AMC an exclusive deal on movies is if they paid quite a bit more for the rental. I'd laugh at any threats from them to block my shows out of their theaters.
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Andrew Thomas
Master Film Handler
Posts: 273
From: Pearland, TX, USA
Registered: Jun 2012
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posted 10-23-2014 12:06 PM
quote:
Can you imagine AMC saying they wouldn't play "Avengers: Age of Ultron"? Neither can I, especially with all those IMAX digital screens. Disney has all the power. If AMC doesn't like how Disney is allocating playdates for "Avengers," AMC isn't going to say "Well, then, we're not going to play 'Tomorrowland' or 'Inside Out' or 'Ant-Man' or 'The Jungle Book.'" AMC isn't going to watch as 100% of the area gross goes to LOOK for every one of these movies in this one area. If push came to shove, and Disney said "Fine, if you don't like that your new theatre is going to day and date with this already established theatre in this area, then you don't get the product," AMC will go "Oh, okay. We'll day and date with LOOK." Because 40-60% of the area gross is better than 0%.
You are missing what AMC is actually doing. They are saying "If you don't give us exclusive product against LOOK in Dallas, we won't play your film in any of our theaters."
They don't actually say that, because it is suuuuper illegal, but that is what they mean and the studios know that they need to keep happy the chains that represent damn near 50% of their revenue. Particularly as urbanization drives more of the population into the cities where even less independents can afford to operate.
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 10-23-2014 01:40 PM
quote: Andrew Thomas
You are missing what AMC is actually doing. They are saying "If you don't give us exclusive product against LOOK in Dallas, we won't play your film in any of our theaters."
Actually I don't think that's what happening.
I think most big movie studios would call AMC's bluff on any threats to block movies from their screens if not given exclusive bookings to certain movies in certain markets.
North America is seriously over-screened. I doubt AMC has very many markets at all where they have control over most or all of the first run theaters in that market. Most big cities have plenty of alternatives where movies can be booked.
AMC, in public, might be trying to posture itself as if it is some heroic "little guy" standing up against the "big evil movie company corporations" to help out the even little-er consumer folksy folks people. That's even though AMC is a big, international company itself.
Behind the scenes, AMC is likely giving up a significant share of its box office percentage back to the movie studios in return for that exclusive deal. Simply put, they gotta be paying extra for it.
A major movie studio would be nuts to give a chain like AMC any exclusive booking deal based on threats alone. It's always going to be better for a movie distributor to have their new movie playing at more theater locations. That equals much greater convenience and choice as well as shorter drive times to theaters for customers. If they limit a movie to fewer screens some customers will have to drive farther to see the show. That's going to increase the chance of some customers saying "screw it, I'll wait for it on Netflix."
The only way theaters could really get tough with major movie studios is if two or more big theater chains colluded with each other to lock out smaller competitors and force a studio's hand on where to book movies.
Hypothetical example: what if AMC, Regal and Cinemark all made a back room deal to force Paramount & Warner Brothers to book Interstellar only at their theaters and eliminate those 70mm shows booked at smaller rivals like SMG and LOOK? Now that would be a real strong arm tactic and probably very illegal as well.
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Terry Lynn-Stevens
Phenomenal Film Handler
Posts: 1081
From: Toronto, Ontario, Canada
Registered: Dec 2012
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posted 10-23-2014 04:32 PM
quote: Mike Blakesley
It's just a big game of chicken is all. Considering the studios are now supposedly all about letting people watch their products "when and where they want" no matter what, I'm surprised this clearance issue is still an issue.
I agree that it usually is a big game of chicken, but there are many instances where the exhibitor has a lot leverage in negotiating with the studios. If there is a competing exhibitor in the area then the negotiating leverage can diminish, but it still depends of what theater can make the most money for the studio.
Cineplex Queensway in Canada is a 20 plex with 12 auditoriums that are premium priced. The complex grosses north of 15 million per year on average, the chain rigorously defends their 2.5 mile exclusive booking requirement, it shuts everyone out. If a smaller theater across the street with less earning potential (a 1250 seat 7 plex, LOOK) were to open up all of a sudden, would the Queensway lose their negotiating power?
Or how about this? Respectively (we have had our differences), if a 10 seat/one auditorium luxury theater were to open up two doors away from your Roxy cinema, who would still have the negotiating power when a new release (such as Avenger 2) were to open, the small 10 seat luxury theater or your 250+ seat Roxy cinema?
In the case of AMC vs LOOK, the LOOK cinema based on seat counts alone cannot come anywhere near what the grossing potential of the AMC is.
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Marcel Birgelen
Film God
Posts: 3357
From: Maastricht, Limburg, Netherlands
Registered: Feb 2012
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posted 10-23-2014 06:20 PM
quote: Terry Lynn-Stevens
Or how about this? Respectively (we have had our differences), if a 10 seat/one auditorium luxury theater were to open up two doors away from your Roxy cinema, who would still have the negotiating power when a new release (such as Avenger 2) were to open, the small 10 seat luxury theater or your 250+ seat Roxy cinema?
The point is, it shouldn't matter. The fact that there would be some negotiating power would already confirm illegal market manipulation.
AT&T, Microsoft, Intel... they all got their collective asses handed to them (mostly outside the U.S. though), for engaging in anti-competitive agreements while operating a quasi-monopoly. Unfortunately, it all came along rather too late for many of the victims...
The Hollywood studios collectively also operate a quasi-monopoly. Being in the first run business, you're entirely dependent on their output. Before digital, they could still play the print-cost card: You're not getting this release, because you'll never gross more than the print will cost us. That argument is now moot, print costs are practically irrelevant, especially if your theater isn't in some kind of VPF program.
A studio should be legally required to provide copies to ALL theaters in the same market under the same conditions, everything else is clearly anti-competitive and will only hurt small (notably American) businesses and consumer choice. Maybe somebody at your congress will wake up after they noted that this AMC beast is actually a Chinese beast nowadays?
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Mike Spaeth
Phenomenal Film Handler
Posts: 1129
From: Marietta, GA
Registered: Jul 2000
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posted 10-24-2014 01:31 AM
I agree that in a post-VPF world clearances should not exist. Nowhere else in the world outside of North America does this concept exist. The studios play day and date next door in Europe, India, etc. A comparable situation would be, say, Pepsi. Does Pepsi say only one store in a certain area sell Pepsi, the other guy gets exclusive Diet Pepsi, etc? No. It doesn't make business sense to PepsiCo. Would they have the right to exclusively sell a specific product in a certain store? Sure. See Mountain Dew Baja Blast, which was, until recently, only available at Taco Bell.
Terry, you are incorrect about AMC "having more seats". This is one of the AMC "fat-seat" locations with electric recliners and a seat count about a third of a traditional auditorium. In that respect, LOOK and AMC are in the same ball-park.
An argument can be made that no clearance in this situation would limit the amount of product available to the movie-going public in this area (i.e. the 11-screen LOOK and 9-screen AMC will both play the same mainstream product), but this is in a highly-populated area of the Dallas-Fort Worth Metroplex, and there are plenty of options available to the consumer for alternative titles. Plus, either LOOK or AMC can choose to go after the niche titles and make that part of their business model. That's essentially the beauty of a capitalist society; the entrepreneur can define his product as he chooses. Legally, however, the product is the studios to do with as they choose, and for now, they have maintained that power in court (see Reading International, Inc. et al v. Oaktree Capital Management, LLC et al from 2003). Just because they have the power to do so, however, does not mean, in my opinion, that it makes business sense to do so.
Joe: You were close on PLF. It's "Premium Large Format"
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Bobby Henderson
"Ask me about Trajan."
Posts: 10973
From: Lawton, OK, USA
Registered: Apr 2001
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posted 10-24-2014 08:24 AM
quote: Andrew Thomas
The studios disagree. I have a 3 screen, all digital, no competition within 40 miles, with no VPF that averages $7k per movie and gets turned down to open stuff on the break at least once a month
I don't think anyone has ever accused movie studio executives of being smart and logical 100% of the time. Even though they continue to play unfair games with small/independent theater operators the studios are hurting themselves with those games. They're just pushing more potential customers in those markets to watching the movies at home on increasingly cheap platforms, like Netflix.
quote: Joe Redifer
What does "PLF" stand for? Pretend Large Format? Patrons Losing Funds? Place of Laughable Features?
Pretend Large Format would be accurate.
I would prefer the acronym "FLF" instead. Fake Large Format. Pronounced Fluff.
quote: Mike Spaeth
I agree that in a post-VPF world clearances should not exist. Nowhere else in the world outside of North America does this concept exist. The studios play day and date next door in Europe, India, etc.
That's another thing I don't understand about small town and independent theaters in the United States not being able to open a lot of movies on the break. These movie studios are releasing at least some of their movies internationally, simultaneously in as many as 2 dozen or more countries. The studios used to platform it out on a staggered schedule in the days of film print distribution. They're increasingly putting it all out there at once. Maybe the studios are doing that to make the most of the initial marketing campaign, especially with how it plays out internationally on the Internet and social media. Maybe there's also an angle of thwarting piracy. More people will see the movie in theaters rather than on the Internet illegally if the movie is playing in theaters as early as possible. Nevertheless, it doesn't make any sense to have a theater in some small town in the US get a new movie weeks after it opened in many other parts of the world.
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Marcel Birgelen
Film God
Posts: 3357
From: Maastricht, Limburg, Netherlands
Registered: Feb 2012
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posted 10-24-2014 04:45 PM
quote: Mike Spaeth
Nowhere else in the world outside of North America does this concept exist. The studios play day and date next door in Europe, India, etc.
And keep in mind: even in the heydays of 35mm, print availability never really was that big of a problem, even for most of the small town cinemas in Europe.
Somehow, I think the considerable distance between the studio execs back in Hollywood and the international market somehow is advantageous for everybody involved. Also, something like "territorial exclusivity" for certain big players would surely raise some eyebrows at a few authorities.
quote: Bobby Henderson
That's another thing I don't understand about small town and independent theaters in the United States not being able to open a lot of movies on the break. These movie studios are releasing at least some of their movies internationally, simultaneously in as many as 2 dozen or more countries. The studios used to platform it out on a staggered schedule in the days of film print distribution. They're increasingly putting it all out there at once. Maybe the studios are doing that to make the most of the initial marketing campaign, especially with how it plays out internationally on the Internet and social media. Maybe there's also an angle of thwarting piracy. More people will see the movie in theaters rather than on the Internet illegally if the movie is playing in theaters as early as possible. Nevertheless, it doesn't make any sense to have a theater in some small town in the US get a new movie weeks after it opened in many other parts of the world.
Like you already put it: for big features, it would be a total waste of marketing efforts to open those features in major markets across the globe with weeks in between.
And, indeed, piracy is also an issue, especially if you're so smart and put a few months between release dates...
quote: Jack Ondracek
Wait a second... Are these the same people who insist that sending everything "direct to video" is just around the corner?
Yeah, the same people. But they would probably also do it via exclusive deals via iTunes, Netflix, the works... Probably as long as the money that doesn't explicitly show up as "motivational fees and services" in any balance sheet keeps flowing in sufficient quantities.
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Edward Havens
Jedi Master Film Handler
Posts: 614
From: Los Angeles, CA
Registered: Mar 2008
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posted 10-25-2014 10:01 AM
quote: Andrew Thomas
You are missing what AMC is actually doing. They are saying "If you don't give us exclusive product against LOOK in Dallas, we won't play your film in any of our theaters."
You either completely misread what I wrote, or chose to ignore it to make a point I was already making.
You also forget, or didn't know, that I worked for AMC until May of this year, so I'm kind of aware of what AMC does. I know how much an AMC location can make with certain kinds of films. And I know that AMC cannot afford to go through on a nationwide threat of boycotting Disney or any other studio if they couldn't get their way at one location in one medium-sized market. I also know, thanks to Rentrak access, just how much the LOOK Theatre makes each week, and while respectable, is not worth AMC losing millions of dollars of revenue (from ticket and concession sales) each week.
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