Film-Tech Forum ARCHIVE: LA Times: Small town cinemas want new films sooner

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Posted by Mike Blakesley (Member # 26) on 10-14-2014, 07:21 PM:

Small-town cinemas want new films sooner
By RICHARD VERRIER

When the critically acclaimed David Fincher thriller "Gone Girl" debuted at the multiplex this month, Byron Berkley wanted to play the movie in all four of the small-town theaters he runs in east Texas.

But 20th Century Fox made the film available to only one of his venues in Kilgore, an oil-rich town with a population of less than 15,000. The others would have to wait another week after the Ben Affleck film screened in major markets across the country.

By then it was too late.

"In a world of instant gratification, it's old news after two or three weeks," Berkley said. "Some people say, 'To heck with it, we're not going to movies anymore.'"

Delays in showing new movies is a growing source of frustration for small-town cinema owners like Berkley, who complains that studios are relying on an outmoded distribution model that favors big-city multiplexes.

A group of independent theaters owners and members of the National Assn. of Theatre Owners recently aired their concerns in a series of discussions with studio executives in Hollywood, according to people who attended the meetings.

The sessions with studio distribution executives were said to be cordial, but executives who attended the meetings disputed claims they are squeezing out small-town theaters. The executives note that several variables determine when and where a film gets played, including the type of film, time of year and profitability of the auditorium.

"We've had a very good relationship with small exhibitors because we believe in their business," said Chris Aronson, president of domestic distribution for 20th Century Fox, who met with some theater owners this month. "The bottom line is we're running a business, and we license our films on a picture by picture basis.... We don't want to be in a situation where our costs exceed our revenue."

As for "Gone Girl," Aronson said the studio had good reason to be cautious about releasing the movie in too many theaters given its mature content.

"R-rated movies in small towns don't always go together," Aronson said.

Friction over the issue of when theaters get to play movies has been magnified by a decline in ticket sales in the U.S. After a crop of weak movies, the industry is coming off its worst summer in ticket sales since 1997, when adjusted for inflation.

The slowdown comes after a period of heavy investment by cinema owners to convert their theaters to digital technology. With financial backing from studios, theaters are still paying off debts to buy digital projectors that cost $50,000 to $75,000 each.

Additionally, theaters are grappling with growing competition from entertainment options in the home and changing habits among consumers, who expect to see movies when they are released. That makes delays getting films on the big screen all the more costly to theaters forced to wait their turn to show the latest Hollywood fare.

"What has happened is that when a picture is released and has the potential to do some business and we would like to play it, the studio has decided they don't want to let us play it and we have to scramble to find something to put on our screen," Berkley said. "We're trying to convince them you're not doing yourselves any good. You're hurting us and you're hurting yourselves."

Berkley said his theaters couldn't book the Nicolas Cage movie "Left Behind" in its opening week Oct. 3, even though many of his customers wanted to see it.

"We had a lot of inquiries from our customers who just wanted to know when we were going to have it," he said.

Dan Fellman, president of domestic distribution for Warner Bros. Pictures, said each movie has its own marketing strategy and often benefits from being phased into theaters.

"Word of mouth can be a very powerful thing," he said. "When you have a movie that turns out to be No. 1 and you've got more people talking about it, it's a good idea to come out in a second wave."

Fellman added that some theaters simply don't generate enough ticket sales to justify getting movies as soon as they are released.

In fact, studios and theaters have followed a similar distribution pattern for decades. Wide-release movies are first shown in major cities, then in mid-level markets, and finally in smaller towns and so-called second-run theaters several weeks after the initial release date.

One of the rationales for the model was the high cost of delivering film prints. Until the advent of digital, it cost $1,000 to $3,000 to make and deliver a film print to theaters. Currently, it costs less than $100 to deliver a digital hard drive and even less for a movie delivered via satellite.

Studios, however, are still paying $700 to $800 in so-called virtual print fees to help theaters finance the new digital equipment. The fees are part of an agreement with theaters to ease the digital transition. Virtually all 40,000 movie screens in the U.S. have replaced film projectors with digital equipment.

With lower distribution costs, independent theater operators argue that there is less economic justification for spacing out the release of new movies.

"We know our towns, we know our small markets, and because the cost is so low now, give us a show to make some money," said Joe Paletta, chief executive of Atlanta-based Spotlight Theatres, which operates four theaters in Georgia, Pennsylvania and Connecticut.

"Our clients are pretty astute," he added. "They are very aware of what movies are released and when, and they have short attention spans when it comes to seeing new releases."

L.A. Times link

Posted by Justin Hamaker (Member # 2165) on 10-14-2014, 07:50 PM:

Although I deal with the issue to an extent, it's the specialty films we have trouble getting. Normally the majors give us anything we can put on screen, although Sony likes to play games at times. But it's almost impossible to get a date for anything from Fox Searchlight, Focus, Sony Pictures Classics, and the other specialty companies. It's gotten so bad that we hardly play any of those titles because we can't get them until 4-6 weeks out. By that time many of the people who would be interested have already gone out of town to see them. And when we are able to get a date, I usually don't know about it any earlier than Monday before it opens.

I don't buy the argument of watching costs at all. The studios never spend money advertising in local media. And now that everything is digital, their only costs are the hard drive and keys.

Posted by Mike Blakesley (Member # 26) on 10-14-2014, 08:11 PM:

The article implies that the studios are paying VPFs on all of the screens that converted to digital. That's not true, though.... lots of theaters, including my own, either did not qualify for VPF or decided not to do it on principle.

And it also implies that small town people aren't as "hip" to what's new and popular as their big city counterparts -- which is not true at all. People here in Forsyth want to see "Gone Girl" just as bad as they do in L.A. or wherever. And they are just as impatient here as they are in the big cities.

The single best thing that studios could do to help out smaller venues is to get rid of that two-week minimum. It's fine for "big hit" type movies, but there are dozens of "smaller" films every year that we have to skip on the break because we know they wouldn't have two weeks worth of legs for us. "Gone Girl" is a perfect example...right now they still won't take a one-week booking, so here we sit waiting. Meanwhile our potential gross for that movie is dropping day by day, because people are gradually going to decide to wait for the video and/or move on to the next thing of interest.

This was proven several years ago when Mission Impossible II came out -- it was the first movie we played on the break, and it grossed over twice what we grossed on the first M:I movie, which we had played in week 5.

I don't particularly worry about the film rental. If a movie grosses well, then the rental is no big deal even if it's high. But we can gross at least 2x as much on a movie in week 1 as we would in week 5. If I had my way, every movie we open would be on the break and I would gladly pay the higher rental for those movies. We would make more money and the studios would make more. I don't understand why this is lost on them.

Posted by Steve Matz (Member # 1890) on 10-14-2014, 10:47 PM:

quote: Mike Blakesley
As for "Gone Girl," Aronson said the studio had good reason to be cautious about releasing the movie in too many theaters given its mature content.
"R-rated movies in small towns don't always go together," Aronson said.

That is a ridiculous statement.Teenagers in small towns have probably seen as many "R" rated Movies as any Metropolitan City Teenager. It shows you how misinformed or just plain Stupid these people are concerning Small Town/City Living. They seem to think anybody that lives in a small town is some Country Hick that only wear Bib Overalls and never heard a swear word in their life. Granted some of the Older Generation maybe offended by some "R" rated movies but I've seen "R" Movies that could probably be "PG" except for a word or two...

This is a different Generation than my time and there isn't any word said or sex content in a Movie that they haven't seen/ heard a 100 times or said/done themselves. Hell I remember in 1969 when "MIDNIGHT COWBOY" hit the Theaters and was rated "X"... Disney could almost show you that film uncut by today's standards... [beer]

Posted by Martin McCaffery (Member # 37) on 10-14-2014, 10:52 PM:

Re: The Specialty distribs, they are just stuck with their old model and don't see a reason to change. They still do limited releases and slow rollouts. Works for them apparently.
I recently tried to book Whiplash. Besides getting good reviews, the art director is from Montgomery and his family has been bugging me about it for months. Although it was release Oct 10, it won't be available to us until the middle of January. It may show up at one of the multiplexes first, so then I'll have to re-evaluate if I want to show it. Or they may decide they are ready to give it to us next week, but since we are a single screen calendar house, we are booked through the beginning of January now anyway. This is not at all unusual for us.
It's really all about what they want to do. We just get to play along.

Posted by Mike Blakesley (Member # 26) on 10-14-2014, 11:26 PM:

quote: LA Times article
Wide-release movies are first shown in major cities, then in mid-level markets, and finally in smaller towns and so-called second-run theaters several weeks after the initial release date.

This actually went out of style in the 1980s. Wide release movies went to major and mid-level markets starting then. Only the smaller towns were left behind at that point -- even if we were willing to play 2 or 3 weeks and pay 70/60, they didn't have a print for us. That changed in the late 90s; now, a small mainstream cinema like mine can play just about any wide release movie, as long as we agree to the play time and the rental.

If you forget about shrinking windows and all that related stuff, the long minimum play time for minor movies is really the biggest problem we have, along with the age-old problem of "not enough prints" (which we were told wouldn't be a problem once Digital took hold).

Posted by Terry Lynn-Stevens (Member # 7349) on 10-15-2014, 01:29 AM:

If booking in week two, what would your splits be for each week? (Assuming you had to keep it for the two weeks)

@ Mike, has your cinema ever been denied a first week booking since you went to digital like in this particular situation?

Posted by Steve Guttag (Member # 268) on 10-15-2014, 06:50 AM:

The excuses given by the studios on this is either deception or ignorance. That is, they really "think" they are somehow building buzz by delaying the release in backwoods towns (ignorance) or they simply don't want to spend the effort to change their booking policy. I guess the other possibility is to deny those bumpkin theatres that did attain a VPF contract from receiving full VPF payments by not letting them have the movie on the break. And to keep the deception up, they have to treat ALL boondocks theatres the same, VPF or no.

Given that actual costs of making another DCP...there simply is no valid financial reason to deny the movie on the break. Heck, I doubt they will put a restriction on Netflix if they do get a day-and-date release from letting the small-minded/small-town "Subscribers" from getting their movie.

If you don't want to send you sophisticated DCP via horse and buggy to these "customers" then just offer your products via satellite and those with electricity can just download the titles to avoid the HIGH COSTS of distribution.

Lordy-lord you might make more money on the break by having these small-timers stealing customers from the big big-faluten towns.

Posted by Allan Barnes (Member # 5178) on 10-15-2014, 06:59 AM:

I'm not sure if this is a current Canadian thing... but since going digital it appears to be harder for us to get ON RELEASE features.

1) Film companies says there are reducing the number of prints. Ok, sure its been a bad year at the boxoffice. AND I could understand the rational when a print costs were $1000-$1300.
But a digital print costs under $100... less than $50.

2) The goal of any business is to get your product in every store. And the film business is TIME SENSITIVE - you got a limited shelf life of less than 30 days.

ARE THESE PEOPLE NOT BUSINESS MEN OUT TO MAKE THE MOST MONEY POSSIBLE?

Posted by Ken Lackner (Member # 1002) on 10-15-2014, 07:58 AM:

Although they don't pertain to me, I like to read threads like this from time to time. And in such threads, I have often encountered a term that I have tried and tried to figure out from context its meaning, but I just can't. Can someone please explain what "on the break" means?

Posted by Steve Guttag (Member # 268) on 10-15-2014, 08:21 AM:

Typically it means when the movie opens or when the movie "breaks" into wide release (if it had a limited engagement before).

Posted by Timothy Eiler (Member # 383) on 10-15-2014, 01:18 PM:

quote: Steve Guttag
I guess the other possibility is to deny those bumpkin theatres that did attain a VPF contract from receiving full VPF payments by not letting them have the movie on the break. And to keep the deception up, they have to treat ALL boondocks theatres the same, VPF or no.

I think we have hit the nail on the head here

Posted by Martin McCaffery (Member # 37) on 10-15-2014, 04:04 PM:

quote: Mike Blakesley
"R-rated movies in small towns don't always go together," Aronson said.

Oh yeah. Bite Me.

Hit movies will be hits wherever you can show them. They may not gross $10k a week in a town of 15,000, but they will do as well as any other big ticket Hollywood product.

Posted by Leo Enticknap (Member # 534) on 10-15-2014, 05:22 PM:

And furthermore, the overheads of distributing them to smaller markets are so much smaller (for the distributor, at least), now we have the DCP. Say, $50 to ship the hard drive to and from a small town theater, a few posters, and that's about it. In the days of film, the cost of prints and shipping was often cited as a reason for only giving smaller town theaters movies many weeks off release. Now they're claiming that R-rated movies would not do well in small, rural towns.

The studio execs probably believe their own movies a little too much (Psycho, Straw Dogs, The Texas Chainsaw Massacre...), and think that the only small town dwellers who are old enough to see R-rated movies are too busy taxidermy-izing their mothers (or raping their daughters) in the cellars of their houses to come out to the theater.

Posted by Frank Cox (Member # 6258) on 10-15-2014, 05:57 PM:

In Canada, nothing exists outside of Toronto. Some years ago, I had a film booker suggest that I could "just go and pick up" a movie from a theatre in Alberta since their last night was Thursday and I was playing it on Friday night. She was really surprised when I pointed out that the location is 650 miles and a twelve hour drive from here. Those folks honestly have no idea where anything is if it's not in Toronto.

I'm sure it's the same in the USA -- if it's not New York or Los Angeles, it probably doesn't exist either.

Posted by Mike Blakesley (Member # 26) on 10-15-2014, 06:12 PM:

quote: Frank Cox
Some years ago, I had a film booker suggest that I could "just go and pick up" a movie from a theatre in Alberta since their last night was Thursday and I was playing it on Friday night. She was really surprised when I pointed out that the location is 650 miles and a twelve hour drive from here.

I had a lady from Disney years ago ask me to "just go pick up" a movie from a theater in Kalispell, which is indeed in Montana, but you have to drive about 600 miles and cross two mountain ranges to get there. In winter you're lucky if you don't have bad roads somewhere along the way.

quote: Leo Enticknap
Say, $50 to ship the hard drive to and from a small town theater, a few posters, and that's about it.

And they don't pay for the shipping, we do.

We also run trailers for free too, which apparently some city theaters don't.

At least we don't have to pay for posters or trailers anymore, so some things are favorable (so far, anyway).

quote: Terry Lynn-Stevens
Mike, has your cinema ever been denied a first week booking since you went to digital like in this particular situation?

As a rule we can usually get anything that's a "wide" release as long as we're willing to pay the terms and play for the required minimum length of time.

Posted by Frank Angel (Member # 248) on 10-17-2014, 11:10 AM:

Such a pile of hippopotamus dung as ever I've heard. "Print" availability and print costs as an excuse to black out a theatre from getting a picture on the break from studios whose execs have wet dreams at the thought of "opening" all over the world on every device known to man AT THE SAME TIME, THEY want to BLOCK IT from playing it at a theatre that is willing to meet terms? So let me get this straight...if they got their wish, and they could play it day-and-date everywhere, they would STILL deny it to the small town exhibitor? These people are living down the Alice's rabbit hole.

Hey, and what if that small town exhibitor would PAY $100 for a hard drive -- he is already pays shipping -- so would he STILL be denied screen play, even though THAT's the reason this schmuck is giving for the refusal?

Or is it that they have simply come to the idiotic conclusion that they only need the big chain theatres in major markets as advertising tools to create public excitement in order to give the title legs for all the ancillary outlets and they don't really need any other theatrical venues except the biggest ones?

Or maybe it is simply that in entire distribution machine, there are lots of these guys who have a vested interest in maintaining control so that they can give the illusion that their skills are still needed for the "complex job" of evaluating bookings on a "picture by picture basis" and from what he says, a theatre by theatre basis as well. In other words, it's to his advantage to hold on to old distribution models that required savvy booking skills; he's just creating bogus job security. In fact, in this age of digital distribution and instant availability, the BEST distribution model is to play a title EVERYWHERE possible while the advertising has created a demand. In such a world there really isn't a lot of need for distribution "talent;" play it everywhere and your done. They themselves give that very excuse for their constant push to shorten the video release window. So why, when you want to shorten the video release would it be advantageous to LENGTHEN the time of availability to a theatre?

Such transparent BS....makes the blood run cold and somehow they think no one can see thru it.

Posted by Terry Lynn-Stevens (Member # 7349) on 10-17-2014, 11:39 AM:

Frank, did you ever think it might be possible that the studio held it back so the small theater in question would not have an R-rated Gone Girl open and compete against an R-rated Annabelle on the same weekend?

From looking up the theater, it is 3 plex in a town of about 13,000 which is 15 miles from their flagship theater which is playing Gone Girl on the first weekend. The theater in questions plays single nightly shows Mon-Thur which too me is a sign that the theater does not perform all that well, so Fox out thinks the owner by not having two R-rated pictures open and compete against the same small audience the theater is trying to attract. The studio then gets the movie into the theater on the second week, it opens with no "new" weekly competition (as Annabelle drops in the second week) and then the theater keeps the movie to week three. The studio/theater gets the goodwill from word of mouth and national media attention which hopefully drives the success of the small theater.

At the end of the day, if this theater complex was successful and had decent grosses, I highly doubt the studio would of blocked the movie.

Posted by Mike Blakesley (Member # 26) on 10-17-2014, 12:47 PM:

You're overthinking it. No studio ever blocked a theater from playing a movie as a marketing strategy. Also it's very rare for a small theater to be able to play in movie in week 2 -- if you don't open on the break you usually have to wait till week 3 or 4, because all the prints are "tied up" for the first couple of weeks.

The article just has the studio guy speculating that "R rated movies and small towns don't always go together." Which IS a true statement -- we don't do nearly as well with R movies unless they are big hits with legs. We almost never open an R movie on the break just because the audience is limited.

The theater in question just simply ran into the age old problem of "print availablity." The studio didn't "block" this theater from getting that print. More likely, they didn't refuse him the print for any reason other than they didn't have one to give him -- which is a problem that shouldn't exist in the digital age.

Of course it all comes down to pecking order. If there are 4000 prints with 5000 theaters wanting those prints, of course they're going to give the prints to the highest-grossing of the 5000. Nobody really knows how much Technicolor or Deluxe charge for digital "prints." If it's really in the $150 range as stated in the article, then the studio is crazy for not making enough prints for everyone who wants one. But I have a feeling Tech and Deluxe charge more than that.

There is also the question of VPFs. If that theater is on the VPF system, then the cost of giving them that print rises substantially. I know there have been a few situations where we have been able to get a print because we are not on a VPF program.

The dumb thing is studios not being willing (or able) to roll with the punches and make a few more prints if they're needed. They apparently decide a couple weeks before release to go with X number of prints and that's it, demand or no demand.

Posted by Allan Barnes (Member # 5178) on 10-17-2014, 02:33 PM:

The answer appears to be tied DIRECTLY to the VPF and number of "print" copies made of any feature film. You need a Hollywood accountant here because... ADDING MORE SCREENS AFTER THE FIRST WEEK CHANGES / INCREASES THE VPF.

CONCLUSION... the number of copies of any film is FIXED. NO NEW SCREENS AFTER NATIONAL ON RELEASE OPENING - "MOVE OVERS" ONLY PERMITTED AFTER WEEK TWO. VPF and NON-VPF CINEMAS GET TREATED THE SAME. Can someone else confirm this?

Sounds like a form of PRICE FIXING.

Posted by Mike Blakesley (Member # 26) on 10-17-2014, 02:49 PM:

quote: Allan Barnes
VPF and NON-VPF CINEMAS GET TREATED THE SAME. Can someone else confirm this?

I think when it comes right down to booking, it's NOT necessarily true. There have been a few (not a lot) incidents where I was told by our booker, "you got it because you're not on VPF." So I suppose, if they run out of higher grossing theaters and it comes down to picking between a couple lower grossers to give a print to, they could pick the one not on VPF.

Of course you'd probably never get a studio person to admit this, and I didn't hear it directly from a studio either, just our booker.

Posted by Justin Hamaker (Member # 2165) on 10-17-2014, 03:37 PM:

The R rated movie argument may have some validity, but it is a market by market consideration.

My company has two theatres. The first is in a largely conservative community which skews heavily senior. It's also a fairly religious community. R rated movies aimed at teens and young adults tend to under perform at this theatre. And our company's policy on enforcing the R rating causes many teens to go 20 minutes down the road to a large Cinemark theatre where enforcement is minimal.

On the other hand, the theatre I run is in a smaller community which has a younger population and tends to be much less conservative - both politically and religiously. Plus the community is more geographically isolated. Based on a percentage of national per screen average, my theatre will usually gross comparably to any other wide release. In some cases we'll actually perform better than normal.

Posted by Terry Lynn-Stevens (Member # 7349) on 10-17-2014, 04:24 PM:

Justin, how many screens is each complex?

Posted by Bobby Henderson (Member # 840) on 10-17-2014, 05:05 PM:

The VPF factor is the only logical reason I can see for denying some small town theaters access to a new movie release on the break. The other excuses coming from studio people or their mouth-pieces is baloney to cover up the fact they're too lazy to change an outdated, obsolete distribution model and adapt to something more effective.

BTW, I think the movie studios may get forced back into that VPF thing or something similar as theaters start grappling with the costs of having to continually replace digital projectors that have nothing near the life span of a film projector.

The recent Nicholas Cage version of Left Behind was a critical dog, with a final tomato meter of 2% at Rotten Tomatoes. To date, the remake has a box office gross of only $11 million.

The people behind that production might have made considerably more money if they had made the movie available on the break to ANY theaters that wanted it. Studio people love thinking in stereotypes. If the stereotype held true Left Behind would have had considerably more demand from the smaller cities and towns where a higher percentage of residents attend church regularly. Business-wise, it would have been very important for the movie to be available immediately to anyone inclined to see it on impulse before the would-be customer found out the show was a total dog.

On to the MPAA ratings excuse.

While there is no shortage of people who will take offense at all sorts of things (not just bare boobies and swear words), small towns have no monopoly on those types of people.

It should also be said the content in Hollywood movies is quite a bit more tame than the content people can access on premium cable and the Internet. The season premiere of The Walking Dead this past Sunday didn't have lots of profanity, but the graphic violence was well into R-rated territory. Some premium channels have non-porn content that goes clearly into NC-17 territory. Any notion of the movie theater being the primary delivery medium bringing immoral content into the pure little town is just stupid.

IMHO, movie studio bosses need to re-think how they book movies in small town theaters, especially ones that have long driving distances to the next town. A lot of customers in rural areas are only too happy to wait for a movie to appear in a Redbox kiosk or on Netflix if they're already forced to wait weeks or even months to see a new movie.

The studio bosses want to make as much money as possible as fast as possible. So why not put the movie into as many theaters as possible and then just pull the virtual prints when the movie has played itself out on a given individual screen? Honestly this approach shouldn't be any different than the practice of sticking some event movie onto 6 or more screens of some 24-plex. After a week or maybe not even that long the movie would lose at least a couple screens and be down to just one screen before long. What does it hurt for a small town theater to have a big movie the same time as several theaters in a big city? This really shouldn't make any difference since lots of movies are now being released internationally in dozens of countries on the break.

I think it's just plain laziness why small town theaters continue to get neglected in the digital age. There was some justification for it when studios were shipping film prints. There's no excuse for it now.

quote: Frank Cox
In Canada, nothing exists outside of Toronto.

And for location shoots Hollywood often tries to pass off Vancouver as any big city in America. Dammit I hate movie geography. They think we can't recognize any landmarks, buildings or even highway sign markers that get in the shots.

Posted by Buck Wilson (Member # 5885) on 10-17-2014, 05:06 PM:

The "lack of prints" excuse is SUCH BOLOGNA. My blood boils every time I hear it. "Prints." They aren't even prints anymore!! It's next to free to copy files onto hard drives and ship them out, not to mention extremely fast comparatively. BUUUUUUTTT- Probably at least HALF of exhibitors now get their content via satellite(No print needed at all!) meaning there's got to be a ton of hard drives just lying around!! ANDDD most of those who DO have a hard drive are forced to send them back almost immediately(At least in the first week) keeping thousands of hard drives out of theater booths. So where are the "prints"?!?!?!?!?

Posted by Frank Angel (Member # 248) on 10-17-2014, 09:45 PM:

quote: Terry Lynn-Stevens
Frank, did you ever think it might be possible that the studio held it back so the small theater in question would not have an R-rated Gone Girl open and compete against an R-rated Annabelle on the same weekend?

No, nor would I, since it's the prerogative of exhibitor to determine what will play best in his demographic, not the studios' and certainly not by them denying product to a theatre based on some hocus pocus whim of who's offended why what and what "goes together," or what they think won't play well in this location and but not another, ESPECIALLY if it winds up denying product to one theatre over another -- some would call that restraint of trade.

If studios want to get into the business of programming, they should just buy their own damn theatres. Bet they wouldn't ever deny themselves prints or ever hear the "no prints available" nonsense.

Posted by Terry Lynn-Stevens (Member # 7349) on 10-18-2014, 12:38 AM:

Frank, how would this example be restraint of trade? The studio denied the booking, the movie ended up opening in 270 more plus locations on the second week. There was no other competition in the area other than the owners own cinema 15 miles away.

It appears to me that the studio did not want week 1 to compete with Annabelle in the same small market with 13,500 pop.

Posted by Leo Enticknap (Member # 534) on 10-18-2014, 12:48 AM:

quote: Mike Blakesley
If it's really in the $150 range as stated in the article, then the studio is crazy for not making enough prints for everyone who wants one. But I have a feeling Tech and Deluxe charge more than that.

A hard drive, a CRU cartridge and a plastic shipping case, which Technicolor and Deluxe probably buy by the truckload, plus the infrastructure and staff time needed to copy the DCP onto the hard drive ... I can't imagine how the cost of doing that to a big distributor would be more than $50-75, and therefore charging the customer $150 to create a digital "print" seems about right to me. Of course the smaller labs and post houses that market themselves to independents and arthouse distributors charge a lot more than that. Ironically, one whose price list I recently saw was only charging around 20-30% less than a 35mm print would have cost "back in the day".

Posted by Justin Hamaker (Member # 2165) on 10-18-2014, 04:45 AM:

quote: Terry Lynn-Stevens
The studio denied the booking, the movie ended up opening in 270 more plus locations on the second week.

I think you're assuming a motive which has no basis in reality. For one thing, Gone Girl was not in direct competition with Annabelle - the two movies appealed to different audiences. It would be more likely if you were to use The Judge and Gone Girl as a comparison. But the logic falls apart when you consider the 270 additional screens were added the same weekend The Judge opened.

If you look at each weekend's box office charts, you will notice that it's fairly common for a movie to add additional theatres in the second weekend. When the numbers are small, its likely just the studios adding theatres that did not have a screen available in week one. In the days of film this was probably theatres with multiple prints dropping one or more and sending them to smaller theatres.

When the number of additional screens in the second weekend is relatively large, this is probably just a planned expansion by the studios. Or response to demand from theatres after a surprise hit.

Posted by Terry Lynn-Stevens (Member # 7349) on 10-18-2014, 12:21 PM:

Justin, if two new R-rated movies open up in a small town of 13,500 pop on the same day, to me at least the movies would compete with the limited amount of movie goers in the town. Movies do compete with the limited number of moviegoers available.

Now add three new movies to the mix, in fact, the theater in question by visiting their website opened Annabelle, and Left Behind on Oct 3rd, and then they also wanted Gone Girl. So the studio balked and opened Gone Girl in the second week which essentially by waiting one week would now be the new release of the week. Its a smart move on the studio end as they use word-of-mouth and the solid press to launch the movie in a much smaller market.

Funny enough, the chain dumped Gone Girl from all locations in the third week. I am assuming they were allowed to play in for one week at the smaller bottom feeder locations.

Posted by Justin Hamaker (Member # 2165) on 10-18-2014, 06:59 PM:

Terry
The reason smaller theatres dumped Gone Girl after two weeks was because the gross wasn't holding up, and Fox wanted to make room for Book of Life.

By your argument, studios would never release two PG movies close together (happened with Alexander last week and Book of Life this week). Studios would never release two PG-13 movies close together - how often do we actually get 2-3 PG-13 in one weekend.

Yes, there is some competition between studios to get screens in smaller locations. But I have never heard a hint that studios will limit their release to smaller theatres just because they might have two movies of the same rating on screen at the same time. It's an argument that just doesn't make sense.

Posted by Buck Wilson (Member # 5885) on 10-18-2014, 08:22 PM:

quote:
I think you're assuming a motive which has no basis in reality. For one thing, Gone Girl was not in direct competition with Annabelle - the two movies appealed to different audiences. It would be more likely if you were to use The Judge and Gone Girl as a comparison. But the logic falls apart when you consider the 270 additional screens were added the same weekend The Judge opened.

If you look at each weekend's box office charts, you will notice that it's fairly common for a movie to add additional theatres in the second weekend. When the numbers are small, its likely just the studios adding theatres that did not have a screen available in week one. In the days of film this was probably theatres with multiple prints dropping one or more and sending them to smaller theatres.

When the number of additional screens in the second weekend is relatively large, this is probably just a planned expansion by the studios. Or response to demand from theatres after a surprise hit.

BUT HOW CAN THAT BE with so few prints!? They CLEARLY can't supply prints that quick to an expanding exhibitor base in only one week!!!!

Oh wait.....

Posted by Mike Blakesley (Member # 26) on 10-18-2014, 10:20 PM:

quote: Terry Lynn-Stevens
I am assuming they were allowed to play in for one week at the smaller bottom feeder locations.

More likely, they were moved over to a smaller auditorium for that second week and then the movie was dropped after that. R-rated scary/thrill movies are usually front-loaded, IOW everyone who wants to see them does so in the first week so the second week goes downhill fast.

quote: Justin Hamaker
Fox wanted to make room for Book of Life.

This is what I've heard called a "track." A studio will make a deal with a small theater to play Movie A for two weeks, then Movie B for two weeks, and sometimes Movie C for two weeks. In a few cases, they will allow a shorter play time for these situations -- once, we had Movie A booked, but then Movie B was opening on a Wednesday, so we were allowed to play Movie A for only 12 days. Movie B was the far bigger of the two releases so they wanted to get it out there.

quote: Terry Lynn-Stevens
smaller bottom feeder locations

Why don't you just say "smaller locations?" It would get the same point across without being insulting.

Posted by Steve Matz (Member # 1890) on 10-19-2014, 12:43 PM:

I went to see "GONE GIRL" last Night(Sat)at (Carmike Shiloh 14) The theater they were showing it in was almost 1/2 the size of the one I watched "Walk through the Tombstones" 2 weeks ago and the Screen size was typical of Multiplex's with 12 or more Screens. Very disappointing after seeing the larger Screen before. Movie was completely different than I thought it was going to be after reading all the previous posts on it. I wish I would have made a left turn going down the aisle to "Annabelle" which was playing right across from this one.

Movie was OK but that ending almost makes me think Sequel(Gone Girl2) Maybe I wasn't paying full attention to the Movie as I was still Pissed Off at having to pay almost 14 dollars for a medium size Coke & Pop Corn even with their Reward's Card. That's BS; Next Time I'll ask my Woman to bring her Larger Purse and I'll stop at the Dollar Tree&Walmart for their Popcorn/Pop.
Theater Manager let me go up to their Projection Room(HUGE!) All CHRISTIE Equipment... Over a 1/2 HR of Previews before the Feature Started !

Posted by Martin McCaffery (Member # 37) on 10-19-2014, 02:29 PM:

quote:
Over a 1/2 HR of Previews before the Feature Started !

I hoped you complained. That's just unforgivable.

Posted by Leo Enticknap (Member # 534) on 10-19-2014, 09:58 PM:

One of the not so positive consequences of d-cinema is that making and distributing preshow crap is now cheaper and easier than it was in the days of 35mm (as a mainstream exhibition format). Anyone with a cheap camcorder and Adobe Creative Suite can make their own ads and trailers, and people are, with a vengeance. The cost of production and making prints used to act as a barrier to entry - not any more.

Posted by Dennis Benjamin (Member # 1137) on 10-20-2014, 01:18 PM:

An article along the same lines as this thread:

LINK

By
Erich Schwartzel and
Ben Fritz
Oct. 19, 2014 2:47 p.m. ET
5 COMMENTS

When Mickey Altman opened Viva Cinema in Houston in 2013, he thought the theater was a blockbuster investment. A 42,000-square-foot complex designed to appeal to the region’s growing Hispanic population, it featured eight auditoriums, a cantina serving Mexican dishes and a party room.

But it turned out he was lacking a key ingredient: Popular new releases.

AMC Entertainment Holdings Inc., the nation’s second-largest exhibitor, told major Hollywood studios that it wouldn’t play most new movies at its location about three miles away if they also played at Viva Cinema.

It was no contest: The studios agreed to AMC’s exclusivity requests on title after title, leaving Mr. Altman’s theater with scraps. Viva opened in May, when “Fast & Furious 6” was driving ticket sales. Viva’s marquee movie? Two-month old animated comedy “The Croods.” Time and again, Viva had to play out-of-date movies, such as “World War Z” in September, when it had been released in June.
Related

‘Fury’ Chases Off ‘Gone Girl’

“They controlled our destiny,” Mr. Altman said of AMC.

Viva closed last November, after Mr. Altman said he lost millions of dollars in business on the theater.

From Atlanta to the San Diego suburb of La Jolla, more cinema operators say they are being blocked from booking hot new releases.

Called “clearance” in industry parlance, the exclusivity practice allows theater chains to tell Hollywood studios they will screen a movie in a particular market only if nearby competitors can’t.

‘They controlled our destiny.’
—Mickey Altman, independent-theater owner

Once widespread, clearance practices faded in the 1990s as the industry came to be dominated by a few large multiplex operators. But in the past few years, a small but growing class of independent movie-theater companies has risen, targeting specific groups such as Latinos and affluent customers. The owners of several of these cinemas claim their growth is being hampered because too often they can’t get the best movies.

“The use of clearances had been slowing in the movie industry,” said Jack Foley, a veteran studio distribution executive. “But recently they’re making a comeback.”

The practice affects millions of Americans by limiting where they can see popular movies. According to theater operators and distribution executives, the tactic has been used particularly aggressively by the nation’s three largest theater chains—AMC, Regal Entertainment Group and Cinemark Holdings . Collectively, they control about 42% of the nation’s movie screens.

The big chains argue that the trend merely follows the rules of the road for the exhibition industry and that in competitive areas, exclusivity requests are to be expected.

A spokesman for AMC said the company requests exclusivity on certain titles for only 28 of its 341 locations. In the majority of cases, he said, it is competing with locations owned by fellow titans Regal or Cinemark—not the smaller newcomers.

In a statement, Regal said exclusivity agreements allow studios to “cost-effectively distribute their movies [and] allow exhibitors to compete for film content.”

Cinemark didn’t respond to requests for comment.

The renewed use of these arrangements has generated lawsuits and even government scrutiny: Two theater executives said they recently spoke with the Justice Department’s Antitrust Division, which has been seeking information on the issue. The practice isn’t the subject of a formal DOJ investigation, according to people familiar with the matter.

Defenders of the practice point out that it is ultimately up to the studios whether to grant a theater chain’s request for exclusivity. Distribution executives—the people at studios who book movies into theaters—say they typically would prefer to play a new release on as many screens as possible. When clearance requests force them to choose between multiple theaters in a market, executives say they go with the location they believe will generate the highest ticket sales—regardless of its owner.

But independent operators maintain they are too often on the losing end of such battles.

Cobb Theatres, which operates 20 theaters including one near two AMC locations in Atlanta, sued AMC in January in U.S. District Court in Georgia, accusing the theater chain of violating antitrust law and using its “world-wide and national circuit power” to “deny their competitors... fair competitive access to films so as to drive them out of business.”

AMC declined to comment on pending litigation.

Cinépolis, a major Mexican cinema company with luxury locations breaking into the U.S. market, estimates it has walked away from one-third of the 200 sites it has scouted for theaters because of clearance concerns, said the chief executive of its U.S. operation, Adrian Mijares Elizondo.

Exclusivity agreements have traditionally been most common during booms in building or renovating theaters. To protect their investments, theater owners sometimes seek to limit nearby competition, usually within a radius of three miles or so.

In recent years, a number of independent exhibitors such as iPic Theaters, Reading International Inc.’s Angelika Film Center, and Landmark Theatres, owned by billionaires Mark Cuban and Todd Wagner, have been building new high-end locations that compete for moviegoers willing to pay sometimes more than $20 a ticket, plus extra for gourmet food and drinks delivered to their seats.

AMC, meanwhile, isn’t sitting still. Fueled by cash after being acquired by China’s Dalian Wanda Group Corp. in 2012 and a public stock offering last year, it is in the midst of a $600 million effort to upgrade 1,800 of its 5,000 auditoriums with leather recliners and other amenities.

Exclusivity, as AMC points out, doesn’t always involve a David vs. Goliath scenario. Regal, for example, is currently trying to “clear” a theater under construction by Cinemark in a coastal Los Angeles neighborhood, according to people familiar with the situation.

Independents are trying the tactic against each other, too. Landmark is currently engaged in one such battle against a soon-to-launch ArcLight Cinemas location in Bethesda, Md., according to people familiar with the matter.
Cinetopia’s Rudyard Coltman delayed his Overland Park, Kan., theater’s opening in May, because the big movie of the weekend wouldn’t have been available. ENLARGE
Cinetopia’s Rudyard Coltman delayed his Overland Park, Kan., theater’s opening in May, because the big movie of the weekend wouldn’t have been available. Catalin Abagiu for The Wall Street Journal

Still, theater operators like Rudyard Coltman often end up being the underdogs. Mr. Coltman delayed by a week the May opening of his Cinetopia 18 multiplex in Overland Park, Kan., after hearing from Time Warner Inc. ’s Warner Bros. that AMC had already requested exclusive rights in the neighborhood to “Godzilla,” the only major new release the weekend he’d planned to open.

While the studios haven’t kept every new release out of Cinetopia, they do alternate their biggest titles between it and AMC Town Center 20—a renovated multiplex about three miles away. Mr. Coltman said he has missed out on hits like “Guardians of the Galaxy,” keeping box-office revenues 30% to 50% lower than he had projected.

Hamid Hashemi, CEO of the iPic luxury chain, said he was in negotiations this July to build a new location in Dallas when AMC sent a letter to studios saying it would request exclusivity on certain titles if the theater was built.

That same day, Mr. Hashemi was told by studio distribution executives, Regal called to say it would seek films exclusively if he went through with plans to build a separate iPic theater in Houston. Mr. Hashemi added that such notifications make it harder to convince real-estate developers that leasing to him will be worthwhile.

Gerry Lopez, chief executive at AMC, said representatives from his company often talk with landlords eyeing potential development and will make it known if they think a site would be subject to clearance.

In a statement, Regal said exclusivity agreements allow studios to “provide consumers with the variety of movies that they enjoy,” adding it expects the practice to continue “for many years to come.”

Write to Erich Schwartzel at erich.schwartzel@wsj.com and Ben Fritz at ben.fritz@wsj.com

Posted by Frank Angel (Member # 248) on 10-20-2014, 02:07 PM:

quote:
In a statement, Regal said exclusivity agreements allow studios to “cost-effectively distribute their movies [and] allow exhibitors to compete for film content.”

I guess somewhere along the line, the Sherman Anti-Trust Act has been repealed. How is this not restraint of trade? How is going so far as to block theatre from actually being build due to this practice not considered restraint of trade? Where the eff is the Justice Department?

quote:
In a statement, Regal said exclusivity agreements allow studios to “provide consumers with the variety of movies that they enjoy,” adding it expects the practice to continue “for many years to come.”

Not if the DOJ throws a major antitrust lawsuit against you, you arrogant SOB.

Posted by Martin McCaffery (Member # 37) on 10-20-2014, 03:38 PM:

DOJ got out of the monopoly business in the early 80's, for the most part. In 1983 there were 3 different chains in Montgomery, and in most of the other big Alabama cities. Then almost overnight, Carmike had everything in Montgomery, Cobb had Birmingham and I forget how the rest of it went, but single chains. There was lots of talk about a lawsuit, but it never happened.
As for AMC, since Carmike opened their new multiplex a few miles from AMC's location, Carmike has been outgrossing them pretty regularly. Maybe Carmike should demand clearances in Montgomery;>

Posted by Frank Angel (Member # 248) on 10-28-2014, 12:39 AM:

I don't see how it is ever to a studio's advantage to give "clearance" to one theatre to the detriment of another. Even if servicing the smaller screen takes patrons way from the big chain, that doesn't hurt the studio -- it's still getting revenue from those patrons no matter what theatre they spend their dollars.

Surely a chain is not going to forego playing a big picture in order to "punish" a studio for not giving them exclusive on that title. I certainly do understand the reason why the REGAL or AMC try to throw their weight around to crush the competition, but I don't see why the studios would go along with it, especially as it doesn't help them in any economic way and in fact, it more than likely can hurt them, especially when their ad campaigns tout, "Playing in a Theatre Near You" and "Opening on Such-and-such a Date;" but then they make a move that causes a certain number of the public not to be able to find it at a theatre near them nor on the date that it is supposed to open -- just one more reason to cause them to wait for it to come to Netflix. So instead of the studio getting it's $9 from a theatre ticket sale, they get $0.75 from the Netflix take.

Why would a studio, after spending millions on promotion, kowtow to a big chain's demand that prevents at least some of the public from finding that title at their local theatre? It seems illogical...moronic even, ESPECIALLY given how the distribution models have moved completely away from tiered patterns and a pecking order hierarchy SPECIFICALLY because it makes economic sense to open pictures as quickly as possible and everywhere at once. Holding it back from screens at the behest of a monster chain is a throwback to cave man times; it is baffling why studios go along with it.

Posted by Marcel Birgelen (Member # 6801) on 10-29-2014, 03:05 AM:

The answer is most probably: motivational fees, services and arrangements... Alongside with "old habits die hard" and CxOs being afraid of being held accountable for potentially backfiring decisions.

AMC also does have some international "leverage", being part of the Wanda Group, which owns a considerable number of screens in China.

In my opinion, this is clearly abuse of a near monopolistic position. The only way to get rid off this nonsense is a lawsuit.