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art house article 22 Jun 2006 20:15 #12906

  • leeler
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An interesting article.....
http://www.boxofficeprophets.com/column/index.cfm?columnID=9615

Steve Mason is a Los Angeles-based talk show host for 710 ESPN Radio. He has previously hosted the nationally-syndicated "The Late, Late Radio Show with Tom Snyder & Steve Mason" for CBS Radio and worked the last five Olympic Games for NBC and Westwood One Radio Network. He is also President of Flagship Theatres which owns the University Village Theatres near downtown Los Angeles (www.FlagshipMovies.com) and Cinemas Palme d'Or in Palm Desert, California (www.ThePalme.com).

Al Gore's An Inconvenient Truth (Paramount Classics), Robert Altman's A Prairie Home Companion and the documentary about New York Times crossword guru Will Shortz Wordplay (IFC Films) are the equivalent of summer blockbusters for specialty distributors. But, a hardly-noticed dynamic involving major theatre chains may be changing the world of art film forever. In fact, specialty distributors like Paramount Classics, Picturehouse and IFC may be sowing the seeds of their own demise even as we speak.

Three of the largest theatre chains – Regal Cinemas, AMC and Century Theatres – have launched programs that they say will improve the economics for art film. Regal calls its program "Cinema Art", Century has cleverly gone with "CineArts", and AMC has created "AMC Select". The idea is the same for each company. At their big popcorn multiplexes, they will offer some arthouse titles.

On the surface, it sounds like a great deal for indie filmmakers, specialty distributors and art film enthusiasts. You can see An Inconvenient Truth at the same megaplex where you go to see Nacho Libre. How can that be a bad thing?

It is a potential disaster for all.

I own a ten-screen multiplex in Palm Desert, California called Cinemas Palme d'Or. We offer traditional arthouse fare along with some high-end commercial film product. Century Theatres owns a 15-screen popcorn multiplex a few miles away, and they hold a "clearance" over us. That means they can block us from opening any film by playing it themselves.

My company's situation is not unique. There are many areas around the country where Regal, AMC and Century multiplexes compete with independent operators who specialize in art film.

In the case of Paramount Classics, An Inconvenient Truth will be potentially be the most successful film in the company's history. After the weekend of June 16th, it has generated an impressive $6.5 million. This is a Pirates of the Caribbean-like number for a little eco-doc from the former VP.

Arthouses like mine have supported lots of small, challenging titles from Paramount Classics in the last few years. Schultze Gets the Blues is a charming, quirky German comedy from the spring of '05 (domestic box office: $595,000). Apres Vous is a fun little French farce from last summer (domestic box office: $830,000). Asylum is a dark psychological drama from last September (domestic box office: $375,000). And Ask the Dust is Robert Towne's film noir yarn from this past spring (domestic box office: $743,000). These are terrific little films, but it's difficult to make any money playing them.

Now, along comes Al Gore and his hip PowerPoint presentation. Do the little indie arthouse guys reap the benefits of playing this Paramount Classics "blockbuster"? The answer has generally been, "No." The Regals and AMCs and Centurys of the world have jumped into the arthouse pool and have snapped up An Inconvenient Truth for their so-called art programs. The independent arthouse exhibitors – who support Paramount Classics when the grosses aren't so frothy – have been, in many cases, deprived of one of the summer's major arthouse hits.

Paramount Classics says that this is a big movie, and they want to play it in the highest-grossing locations possible. But, the popcorn multiplexes don't do the sort of on-the-ground marketing that indies specialize in. And, will An Inconvenient Truth stay onscreen when Warner Bros wants additional screens for Superman Returns on June 28th and Buena Vista demands an extra screen or two of Pirates of the Caribbean: Dead Man's Chest on July 7th? Al Gore won't be able to compete with the man of steel and Johnny Depp's hamming.

So, in the end, one of the most provocative films of 2006 gets fewer weeks onscreen and a lesser gross when it plays as part of Regal's Cinema Art, Century's CineArts and AMC's Select. The picture gets two to four weeks at the big popcorn multiplex as opposed to six to eight weeks (or longer) at the local arthouse.

Long term, this strategy will effectively shut down many indie arthouses in the next few years. Large theatre chains make de facto circuit deals on the most commercial art films leaving the most challenging titles to the independent exhibitors. In any market where the arthouse shuts down, the consumer loses. Not only is the best art film on screen for fewer weeks, but filmgoers also pay the generally higher ticket prices. And, with lower-priced competitors gone, there is no price restraint on the big guys. Regal, Century and AMC can charge as much as they want. Where else are you going to see a movie?

But the greatest loss in the marketplace is that there won't be anyone to play Schultze Gets the Blues, Apres Vous, Asylum and Ask the Dust. These are unique and special movies, and should be seen, but they're not moneymakers. With the indie arthouses gone in many towns, there won't be a venue for them. The megaplexes won't play them because they only have room for hits.

So when Picturehouse sells A Prairie Home Companion to Century CineArts or IFC Films sells Wordplay to Regal Cinema Arts or ThinkFilm sells Strangers With Candy to AMC Select, they are giving in to a destructive and even predatory large chain booking practice. Ultimately, they will be forced to dramatically reduce the number of the films they release because there just won't be anyone to play them.
"What a crazy business"
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Re: art house article 23 Jun 2006 09:10 #12907

  • Mike
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and how....Pulp Fiction changed everything. In the apst mainstream theatres did not book art and did not care how it grossed. That's changed. A souless classic 8 screen down the road goes after art just as it would anything that sells tiks and people go. Plus: art distribs are very loose on doubling and splitting and skipping shows and partial shows: anything to get the film in your house! So the multiplex will grab a lot of stuff and hog it. It's a problem.

Michael Hurley
Impresario
Michael Hurley
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Re: art house article 24 Jun 2006 11:21 #12908

  • showandtell
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Thanks for that article.

This is sobering news that will have a major impact on our endeavors to open up an arthouse. We had been banking on going a for-profit route up until 2 weeks ago and now with this news, we are reexamaining our business model and looking to go it as a not-for-profit.

The biggest wildcard that is not accounted for is the fact that we are wanting to open a café with our theatre. This could considerably alter our numbers, but it still may be too close to call.

Are there other arthouse people out there that fear the trends mentioned in this article? Is there any other advice that anyone might have to help us make this decision.
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Re: art house article 26 Jun 2006 22:04 #12909

  • showandtell
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After much discussion and consideration, the article posted in this thread along with several other sources has confirmed that this is not a good time for us to go into the movie exhibition business.

I know that all of you were on the edge of your seats waiting to hear what our decision would be, so I just wanted to put your minds at ease


Thank to all who helped us out along the way. This board was the best resource we had.

The best of luck to all of you. We'll be checking back to see how things evlove over time.
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Re: art house article 28 Jun 2006 01:37 #12910

  • Rialto
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Being an arthouse exhibitor, I have to say that I don't necessarily agree with the views expressed by Mr. Mason in the referenced article. In my market, I compete directly in the same zone with a 14-plex owned by a small chain, a 12-plex one zone north owned by the same small chain and a 16 plex one zone south operated by Pacific Theatres. We are currently the only theatre in the county playing An Inconvenient Truth, and the only theatre to open Prairie Home Companion on the break. Wordplay will open with us on 7/7.

While what Mr. Mason says does happen, as an individual independent exhibitor, our long-term relationship with our major suppliers (the specialty divisions, plus many independent companies like Lions Gate and IFC) and working with a film booking firm that reps screens across the country, help us to secure these films because we have proven that we can gross and that we are a good customer (ie. we pay our always timely with our film rental payments and if we make a mistake we rectify it immediately).

Every market is different. It takes tenacity and creativity to make it in the arthouse business. You have to be pragmatic and take the long-term big picture view. Competing against an 800 lb gorilla is a tough road, but my experience has been that the specialty divisions are supportive of arthouses that perform when it comes to the breadwinners. Maybe I'm just lucky in that respect.
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Re: art house article 29 Jun 2006 10:54 #12911

  • Avalon
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I’m glad Rialto is having luck with the distributors. I, too, am an art house exhibitor. I operate within 5 miles of a regal four-plex and a Carmike 12-plex in a town of 50k. I was here long before Carmike came to town and have spent the last nine years developing the art market here. Carmike comes to town and sucks up all the first-run stuff so Regal segues into the art market. Guess how quickly the high grossing art product went to Regal? Carmike counters by sucking up some of the art product in an effort to sink Regal. Again, the movie companies forget very quickly who germinated the market in this area for their little product when presented with a larger venue. I’ve proven that my venue attracts the people who want to see the art product, and that I will play the product longer, and that I will OUTGROSS many of the multiplexes even AFTER they have played the product for weeks. This fosters no loyalty. In order to stay in “good standing” with movie companies, I play their low-grossing crap. My booker basically points out I have no choice if I want the bigger product down the road. Anyone who has been in this business knows you can only play losers so long before it affects your bottom line. This gets me behind in film rent. I had to pay a $5000 advance to play an “expected hit movie” in a 50-seat auditorium. I was informed I better pay it or not expect product from this company for a long time. That was over a year ago and I just now played enough of that company’s product to use up that advance. I am now playing A PRAIRE HOME COMPANION believe no small part of that is that Picture House does a lot of small product that I play and Carmike/Regal will not. I’m opening AN INCONVIENENT TRUTH tomorrow. I will not believe it until I have the print in my hot little hands.

So what am I doing? I’m adding beer and wine to my single screen in the hopes this will be enough to keep things going when the big guys pluck the low hanging fruit and leave me with the windfall. I liked it a lot better when I could spent my time making sure my customers had the best presentation and experience I could offer, rather than trying to find money to keep going while playing films that don’t even cover half of their nut.
Paul Turner
Avalon Cinema
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Re: art house article 29 Jun 2006 16:43 #12912

  • BECKWITH1
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I've been assured by my bookers that there is zero chance of us converting to an art house format due to the presence of the large chain houses in our area. They will do exactly what Avalon has experienced- suck up all the profitable art house prints before we ever get a sniff at them. Even the established art house for the metro area - many miles away - is having to compete with the dominant theaters for product. It don't think it is a day or night situation, just an slow erosion of product availability which eventually sends the audience to the dominant theater first rather than the art house and eventually the established art house just runs out of gas and goes under. Won't happen for a while but it is really just the same pressure that we small first runs face against the megaplexes. They get everything and oftentimes 2 - 5 copies of it. The audience gets used to going there for the film we can't get or the multiple show times and just gradually erodes our market. So the only solution is to be the biggest guy around.
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Re: art house article 05 Jul 2006 11:42 #12913

  • hdd
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What are the geographic limits on distributors applying these kinds of pressures on small venues? In other words, would being located 10 vs 5 miles from a big chain make any difference in obtaining better selections? Also, does anybody know whether there have been any lawsuits challenging this (appears monopolistic) practice of discriminating against smaller outfits? Thanks.
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