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In my opinion : absolutely. They wrote us off like garbage stuck to the bottom of their shoe. I am a long time member and supporter of NATO and they should be ashamed for failing the small theatres of the United States. I wish I could say they failed us but rather it's more like they participated in planning the destruction of hundreds of theatres.

No, NATO did not fail small theatre owners. Many small theatre owners failed themselves, others have markets that have just gotten too small to be viable. Sad but true.
It isn't hard to find small single screen theatres that have converted due to aggressive owners or community boards.
AllenD

Anyone who expected NATO to take a stand against the studios is a fool.

As I have said repeatedly on this board over the years the main purpose of NATO is to keep the theatre owners from attempting any type of revolt against the current system of distribution.

I have always been involved in second run exhibition. The studios have always treated second run as something they wished would go away. Recognizing this history, I took the position early on among those who asked me that small theatres were on their own and that small theatres operators had better start financial planning for the equipment purchase if they intended to continue in the exhibition business.

I sense many of the NATO loyalists are afraid to disagree with Mike. I remember reading how many on this site were lauding the insight, wisdom and leadership of Fithian. How no theater would be left behind in the digital transition. Well this is an election year afterall and promises were made to broken....
NATO is and always has been an instrument of the large chain theaters at the expense of the independents-the digital issue just brings this reality into sharper focus.

How do you want to define the question?

Since 95% of the box office gross comes from approx. half of the locations, yes it has been a success.

Did NATO/CBG fail the smallest for profit theaters. Yes.

The biggest thing they failed to do was to participate in online forums. I can never recall anyone official (elected or appointed) participate on this of FT forums. Why?? It seems obvious as well that they did not read them either.

Yes, many small communities with non-profit locations will do fine. But many theaters that have been profitable will have to go. Mine will be one of them unless I can persuade a developer to build a new facility for me. Needless to say I am not holding my breath. We are profitable right now but in no way can absorb what may be $1000 per mo. per screen. VPFs you say? Well like Mike & I have mentioned; be a theater in the 3100+ group and you may stuck playing half of your movies 7 weeks old. Can that be a way to go? Sure if you have no competition within a 30 min. drive.

Rufusjack:
Did these small theatres that may "fail" join NATO or the CGB? Did they attend the CGB meetings? If not they tossed the dice and may have lost. NATO is a trade organization not a genie in a lamp or a not for profit bank.
They have no obligation to save theatres that aren't financially viable. Some of these theatres aren't viable because many small towns have shrunk over the years and simply can't support businesses that may have thrived in these towns before.
However, new theatres are still being built so areas with populations that can support theatres are getting new ones.
Video stores are largely gone throughout the United States; book stores and record stores are disappearing. All of these stores have or had trade organizations. Why didn’t they save their members stores? Why doesn’t every small town have a Rexall drugstore? Where are the small town IGA stores? Many good sized towns and all cities once had stores each devoted to luggage, stationary, TV’s or magazines. They were wonderful stores full of experts; now these categories are serviced by department and big box stores. Life changes. Populations are in flux. Sometimes it’s sad but it is life.
I watched the folks are Box Office Magazine get beaten to death over at www.filmtech.com. I'm not surprised that NATO reps aren't participating on these sites.
If, as you say, NATO has worked for "95%" of theatres than NATO has worked.
AllenD

Side note: speaking of video stores, how does Family Video keep building new stores in the Netflix environment? What do they do right that Blockbuster didn’t? Where are the mom and pop video stores? Should we look at Family Video’s business plan?

Here is where NATO/CBG failed. I have told this before. I started in this business Nov. 2006. Used a booker for a while. My booker sent out info. on digital and cbg in Sept. of 2007. The information that I received included a deadline of October 2007 to join. I looked into and hated the lack of transparency.

You see I had been involved with the Video Software Dealers Association (Video stores) and their independent arm , the IDEA. I spent 2 years on the board of trustees of IDEA. We were very active on the forums trying to get store owners involved. The forums are a great way to share information. You can't lie or blow smoke or the FT people will shred you as they should. But they are fair IMHO.

For example, Roxy (Richard) posted about his recent publicity. He placed on both forums. The meanies at FT responded 11 times all in a very positive way. vs a couple here which is supposed to be the nice forum.

I did not join then for the following reasons: 1) I hated the level of secrecy, 2) Felt a bit frustration from dealing with other trade association like I did with the VSDA/IDEA. 3) Phone messages (only 2) were not returned, 4) I also hated that they would not sell you a membership while you were researching the industry, you had to be an operating member. So by the time the October 2007 deadline occurred I had very little positive to feel about the CBG.

Where they failed the most: I found out about a year ago or so that they extended their deadline to join. That was extensions for 2+ years. I did not know about it and I feel I am pretty well informed about what is going on in this business. No correspondence from the studios. No posting the info on these forums. Hell the CBG members who do participate on these forums did not even mention it. I had been to at least 1 trade show during the deadline extensions and no promotion of that either.

I totally understand the reasons why the current VPF model will be implemented for the 3100+ theaters. What is surprising is how those that do belong are being felt that they were being left under the bus. Two possible fixes: 1) Only give us the VPF on movies with x,xxxx loactaions. maybe 3500+. That alone would probably pay for 50% of the conversion costs. 2) on the rest, allow me to play anything with a $500 guarantee. Most of us will gross more if we are playing the newest movies while they are newer. Increased grosses by playing newer movies will help us pay for the rest of the cost. Studios make more money by collecting more film rental.

What is wrong with those two ideas? I have never said that the studios owe it to the exhibitors to keep them in business. I have a profitable theater that pays it owners a decent salary. But there is no way a you can justify staying open and converting at my level. I believe their can be ways to make a win-win situation.

As far as the CBG deal goes, their deal from what I can tell is not that great. You do not need to be a part of CBG to use Cinedign. Film-Tech may have the best deal in place as far as I can see. The cheapest is probably Sony (but cheapest is not always the best).

BTW, 90% of the grosses come from 50% of the theaters. I have never said 95% of the theaters are converted. It is 95% of gross! Just look at rentrak for your area to see. Almost all of that could have been done without any help from CBG. The biggest 3 already had a deal in place before CBGs was done.

Would have been nice of CBG would have worked with a couple of exhibitors as test cases. And then use the results to promote what they can do for exhibitors. The IDEA did just that. We had a couple in Minnesota who allowed some of our brightest independent members of our group come in and offer suggestions. From decor, pricing, and pretty much everything under the sun. It was a fantastic project. I always felt Leeler was a great candidate for this.

Family Video: They are as much a real estate development company as much as video store operators. There are many independent operators like myself still in operation. They do not do much special. Their copy depth has always been pretty bad. Why they still exist? Since they own the buildings they would have to find replacement tenants if they wanted to close down. That is pretty difficult in this economy. It would not be uncommon for a video store to be paying 20%+ of gross as rent. So they can stay around longer because they loose less by being open. They also just recently announced a partnership with Marco's Pizza that gives about a 25% footprint of their stores to the pizza company.

Movie gallery/Hollywood: Failed as much because Movie Gallery used about 90% debt to buy Hollywood. Too much debt sinks many a ship.

Blockbuster: I believe their problems were as much to do with the fact they were a publicly traded company. the darling was netflix. I say was as they are no longer. So you had BB try to match the Netflix buzz with their "no late fees" promotion. But that is hard for brick & morter store to do. Anyway long story short they were never set up to be a cheap rental store. They had large stores with large overheads.

I tried being a good guinea pig, I really did!

I have always wondered why more people from this board didn't go for the CBG deal when it was announced. I pushed the heck out of it and it has paid off, not wildly, I'll grant you, but it has paid off. We have received VPF payments for both my single screen and we just got the first check for our six screen. Did NATO fail small theater owners? Not this one. I believed the hype, went to the trade shows and spoke with NATO, CBG, and Cinedgim. I pestered the hell out of them via e-mail and phone calls, and generally didn't let up on any contact I had. The question remains, why didn't any of you?

leeler wrote:
You are an unigue situation with your single screen in that you gross pretty damn well. You emailed your sales for last weekend to me and you did fantastic on a crappy movie. Very few could do that. So the deals that were made help you. Your other theater could have been done outside of CBG without any problem. I have access right now to VPF deals outside of the CBG.

I think a major problem was again the lack of transparency. You had to speak vaguely on what was going on. Plus in the end would anything had been changed? Mike is a member and went to these.

Or was it that issue of trust? You were told yea no problem getting the same movies we have been getting on film. But wait! Sorry no digital prints if you are getting a VPF for some movies.

Again Fithian said no theater will be excluded. No other intergrator has said that.

I think the fact that leeler "did fantastic on a crappy movie" is solid evidence that he's doing a lot of things right. Obviously, I don't know how close his one-screen is to the competition, but luck and location only get you so far.

Also, It's good to know when a VPF is working for someone - and not only when it doesn't work, is problematic or isn't a good fit.

I'm looking at digital gear right now, and I don't think any VPF I've seen is going to be appropriate for me. There's nobody to blame for that; it just has to do with how I want to run my business.

Anyway, I say good on leeler for knowing how to draw a crowd to a theater and for sharing a VPF success story.

I guess maybe my single screen is a unique situation but I don't think how well I do there has any bearing on whether or not I received VPFs there. In any case, I did not disclose my sales to CBG or Cinedigm, just my turns and how many films I played on the break and things such as that. My six screener is in no ways a special situation and without a VPF program I would not have been able to get a bank to give me financing for it and the whole deal would have fallen through. The point of there being a few movies I couldn't get because of my reduced VPF it really is more smoke then anything else. I was denied a print of 'Source Code' whenever that was and 'Twilight: New Moon' whenever that was but that was the last time that has happened to me, even with Summit (now Lionsgate). I have to agree that the lack of transparency was very frustrtating (and it still is to some extent) but I see the studios point of view on this and it is a small price to pay to have the studios foot the bill for your projection equipment. Did NATO fail small theatre owners? No, not this one.....it saved us and for that I am grateful.

As for my sales last weekend they were far from "fantastic" and more along the lines of "good enough"

leeler wrote: .

Leeler is modest. He did excellent homework before he bought his theater. I have always preached that if you want to own a small town theater, please choose own with no competition close by. He did. He also owns the theater closest to his single screen and has been very wise in his programming. Leeler's single screen is the highest grossing single in Iowa (or at least was at one time). If you are grossing $1500 or more a week on a move-over, the CBG deal will work for you. The studios will not blink in giving a $200 or so VPF to you while grossing that much on a bad movie. In my area, $700 is a pretty good gross for a decent move-over. That my friend will probably not get you that move-over in week 4 with a VPF.

Leeler & his 6-screen: Too modest again. I think this was a great purchase for you. Good size market without any competition close by. But you did not need CBG for the VPFs (yes you did for your single). Any of the others will have been happy to help you. I believe all 6's in my area have gone digital with VPFs.

Stop being modest Leeler!

Leeler is correct in that you will not be asked for your grosses when you qualify for VPFs. What a theater does gross has not been much of an issue since probably 95% of the installs have been the better grossing theaters. Now we are seeing the lower grossing theaters sign up and things are not quite what they are told.

Please keep in mind that the film print you have been getting most of the time have life after you get it. And most of the life comes at very little to no cost to the studio. So if a print costs $1000 to make, that cost can be spread across multiple play dates.

That cannot happen with digital. Your $750 vpf cannot be spread across to another theater playing after you. So you better have a good track record of grossing enough to cover that cost.

So the question that you need to ask yourself if you are in that 3000+ range: 1) How often do you gross less than $2000 on a first run movie?

2)How often do you gross more than $1200 on a move-over basis?

AllenD wrote:
My small Maine town of 6800 in a county of 38,000 has a lively downtown. We have an IGA, we have a video business that beat the chain to death, we have 4 bookstores downtown. When I read quotes like the one above I know one thing: people who live in big cities know nothing, though they are not afraid to speculate from such a position, about life in small towns. So fro now on introduce yourself on this sort of subject : HI my name is Mike. I live in a town of 6800, a county of 38,000, we are not a college town, and my state of Maine has 1.3 million people. I recently read how North Dakota has been repeatedly touted as having 0 unemploymnet. It's a lot easier to do that when you start with a state population of 680,000 than in California that has a population of 36,680,000. Folks, friends one and all: this digital thing has nothing to do with you if you are not in a smaller market. Everyone else the vpfs work fine and big brother issues aside: it's a good thing. But for hundreds and hundreds of small towns that have enjoyed film for 100 years: it's a disaster. I get that many of you do not care. Thank you for your empathy on behalf of small theatres everywhere. My point about NATO is that they are essentially a tool for larger interests and did not represent their members who were not larger independents or chains. A certain portion of their members they threw under the bus. That is a scurrilous way to run an organization and a betrayal of their name.

I sure don't feel like anything but one of the smallest operators there is. I have a single screen theater which seats 140 in the county seat (population 1400) of a county with no stoplights. When I got into this business in 2003 I knew at that point that film was going to go away soon (back then it was estimated to be "about five years away"). So, I scouted out who could help and learned about NATO and quickly joined (the dues are really low for a single screen, so why not). I went to some regional meetings, heard Fithian and others speak and joined the CBG (again, why not, the dues are CHEAP). They encouraged me to sign up with Cinedigm for what they referred to as weekly VPFs, which I did, and now my single screen has been getting VPFs for about a year now. Help me understand the disconnect. Were any of you not able to join? If not, then exactly how did NATO fail you? I understand if the studios don't want to pay VPFs if you don't gross enough, but that is hardly the fault of NATO/CBG. Frankly, if they signed the contract and then went back on their word about fulfilling the terms of it, then I would get NATO to intervene on your behalf which they have said they would.