Many of the first studio bosses were showmen – theatre-chain owners for whom bringing in an audience and giving them something to love was in their blood. In the Golden Age of Hollywood, all the major studios owned their own theatre chains, until anti-trust actions forced them to sell them off. The argument about whether that was a net good or bad for film is for others to write large books about. These days the studios are all run by Wall Street assholes – don’t let the West Coast tans fool you.
But reading this news, that two of the largest theatre chains in the country are joining forces to acquire and distribute films through their own theatres really excites me. Here’s a few reasons why:
1) Theatre owners are fighting to protect the movie theatre experience.
I’ve said it before – if you want an audience these days, you’ve got to convince them to leave the house. In general, people blame things like high-definition TVs and DVDs for the decline in theatre attendance. It’s why exhibitors rushed to embrace 3-D – the margins are better and, at least for a couple more years, the average American cannot get it at home.
But one of the other problems is the gradual collapse of the release “window”. It used to be that the theatre was the ONLY place you could see a movie for a long while. Waiting for video could take 6 months, cable as much as a year. Not only did the exclusivity benefit theatres, they were incentivized to keep movies on their screens for longer periods. The “split” in box office revenue tilts drastically in favor of the distributor for the first two weeks – when the big crowds come in – and then adjust in favor of the exhibitor if the movie keeps its audience for long periods. The industry term is “legs” – exhibitors love a movie with legs.
But studios have been inexorably crushing that release window, to the point where major productions are often on DVD shelves within 3, 2 months, or even less, after their release date. They do this because they make more money from DVD these days, and in order to save on advertising. Instead of drawing attention to the movie once, going quiet, then trying to raise the volume again for the home version, they can just make one, sustained run at your attention.
Prices have changed, too. It used to be that the ticket to see the movie on the big screen was $6, and buying the VHS was $20. So there was less risk in giving the movie a try at theatres, and you reserved home video purchases for the ones you really loved. But now the ticket costs you $12, and the DVD might cost $15-20, but could drop to $5 within months at a big-box retailer on a holiday.
This is a catastrophic formula for theatre owners in the long-run, because audiences feel less urgency to get to the theatre when DVD is going to be available so soon and so cheap. Frequently now, lower-budget films are launching under a new model where they debut in theatres, on DVD, and on on-demand cable, all on the same day. It’s hard for a theatre-owner to argue that you should leave your house and give him $10 to show you a movie once, when you could order it from your couch for $6; or flat-out own it for $12.
So 3-D has been a Band-Aid, and more chains are presenting live events like rock concerts and operas and the like, which is a step in the right direction. But this is the kind of bold experiment that theatre-owners need to protect their investment in all those giant screens and bone-rattling sound systems.
2) It changes the formula for what goes on their screens, and for how long
Juggling the demands of the studios – who want to blanket the multiplexes with big-budget movies – can often force theatre-owners to not even consider smaller or more off-beat fare; the real estate at the newest theatres is limited, and smaller movies can take time to find an audience.
But when it’s their movie to put out, who’s going to tell them they have to pull it to make room for something else, or jam it onto DVD in 6 weeks? By owning the movie, they own the exclusivity, which gives them instant drawing power. And there’s nothing like having skin in the game to get them to put more support and faith into a smaller product.
3) Ultimate targeted marketing
When you make a movie, who do you want to sell it to? Moviegoers! What’s the one place in America where effectively 100-percent of the people who are there are moviegoers? A movie theatre! If Regal and AMC have any imagination whatsoever, they’ll know that they have the chance to really flip the whole promotional model with this idea. Prominently-placed posters and exclusive trailers playing only on your screens should really just be the beginning.
For a movie they own, they could do the kind of promotion in the theatres that doesn’t feel like a parade is breaking down your front door. For pennies on the dollar, people will have the chance to discover a film, and decide on their own that they’re interested. These are your word-of-mouth champions who help give a movie those mythical “legs”, and they are trusted so much more than a commercial on TV.
4) Once you build a pipe, it doesn’t like to be empty
I can tell you firsthand that there are piles and piles of small-budget films out there at marketplaces and festivals, already made and waiting for a home. Many of them are garbage, but some of them are very good films, or simply unique films that people out there would love if they only knew of their existence. In implementing a model like this, these chains will be creating “slots” for probably 1-2 dozen of these little movies a year, and offering the potential of greater support like I described above.
This is going to stimulate the market for movies of this size – which is fabulous, because you can do a lot that’s interesting in this price range. Independent investors who hate getting screwed by studio accounting but need the security of distribution may get a little looser with their money, knowing this option exists. And filmmakers who lust for the prestige of the big-screen release will be eager to offer up product.
Most importantly of all – it means the same damn group of people won’t be making all the decisions of what movies get to play in your neighborhood. This board needed to be shaken up. It’s all in the implementation, of course, and I’d love to see one of the other chains get in the game and provide some competition for this new model, but I see game-changing possibilities here, and it excites me.