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TOPIC: Windows are GONE!

Re: Windows are GONE! 02 Mar 2007 12:56 #14516

  • Mike
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Just in case you guys don't know it: Narrow Gauge and I are friends, visit each others theatres, and offer and accept advice and help all the time. Just don't give him any blunt objects.


I'm still thinking about all this. Mike

Michael Hurley
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Re: Windows are GONE! 02 Mar 2007 23:53 #14517

  • theBigE
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Not just Children of Men coming out this month. You'll see Blood Diamond, The Holiday, Rocky Balboa, The Nativity Story, The Pursuit of Happyness, and The Good Shepard at video stores before the end of March. All Christmas films, coming out 3 months later on DVD.
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Re: Windows are GONE! 03 Mar 2007 10:44 #14518

  • jacker5
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Like I said very scary...this is a nightmare coming to the real world!
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Re: Windows are GONE! 03 Mar 2007 13:04 #14519

  • Avalon
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This is why I'm experimenting with my single-screen by making it venue driven rather than product driven. Beer, wine, sofas, booths, early open, late close, etc. I am organizing various mini festivals with public domain product so there is no film rent and bringing in local musicians and writers to read relevant works before the shows and during intermission. Hooking up with the local university to do benefits works well. They get sponsors to pony up the film rent and we split the box and I get the concession--tho I often throw a few bucks in their direction from the bar. They bring in dancers for the intermissions and get local merchants to come up with door prizes.
I have no idea how this is going to work out. My four-plex is enjoying a bumper crop of good product, but, as we all know, that will change. I do feel that the days of doing pure cinema are going fast. Film rent is too high and expenses just keep climbing. So, I'm poking around to see what others have done to stem the tide of money rushing toward TiVo and Netflix. I'm trying to give my patrons a cheap option to get out of the house. The next few years are going to be interesting...
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Re: Windows are GONE! 03 Mar 2007 14:24 #14520

  • Mike
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I can see if you are sub run or much later but for first run places, and I are one, the window isn't much of an issue. The opposite is true for my 2 and 3 screen: there are so many pics coming out that you have to clear stuff out to make way for new pics or pics that will perform. I never have the situation, except in the case of older art pics, where I run into the window problem.

Is the major issue that people will "just wait" and not go to a theatre? I do not buy that one, personally.

Is it just a sub run / 2nd run issue? What is the problem for first run theatres?

Michael Hurley
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Re: Windows are GONE! 03 Mar 2007 16:34 #14521

  • Avalon
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<BLOCKQUOTE><font size="1" face="Verdana, Arial, helvetica">quote:</font><HR>Originally posted by Mike:
<B>
Is the major issue that people will "just wait" and not go to a theatre?
</B><HR></BLOCKQUOTE>

This is a good and valid question, Mike. This is why I think it is time to start making your business as attractive as a venue as well as for the product it shows. I think the public does not want to wait and they are listing in that direction. What needs to push them toward the theater is more than jsut the product ont he screen.
Paul Turner
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Re: Windows are GONE! 04 Mar 2007 15:04 #14522

  • jacker5
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What Mikes say is true. If you play first run there going to come. There is so much to pick from that even if yopu play the movie two weeks there is going to be another to replace it then and bring them back.
I was at the local multiplex last night and Wild hogs was sold out and the other movies were at capacity.
Doesn't seem like a problem! I was nosing aroudn and asking peopel questions and the audience was mostly seniors and kids plus a larhe percanteg of young adults on dates. They said no matter what peopel say it is the cheapest place you can go to hang out!
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Re: Windows are GONE! 04 Mar 2007 18:35 #14523

  • Mike
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I asked my wife this question about will window shortening mean people are just waiting to see it on dvd and she said... "duh." As in: it is quite clear that would be the case and I are stupid for even wondering about that.

But I ask....Are windows the sole culprit? Internet-vid gaming-wide screen-home theatres-netflix- and so many new films piling into the market. etc. etc. ? Seems they have all taken a chunk and the windows are not in a vacuum.

If they went to a 120 day window it would be interesting to see a study of the effect on new films not getting made or shown, the pressure to hold films coming down on all of us, the impact on film makers, rentals, vid manufacturing, pay per view, etc. In other words: we are not alone.


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[This message has been edited by Mike (edited March 04, 2007).]

[This message has been edited by Mike (edited March 04, 2007).]
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Re: Windows are GONE! 05 Mar 2007 09:55 #14524

  • leeler
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I can't help but wonder about the digital effect. Once the availability problem is gone I'll be able to book things sooner then I do now unless the terms change radically from the way they are now. Will that then shorten the window more? I'd really like to see the theaters get a good shot at a movie and then have a short grace period between the theatrical release and the other forms of release (DVD, pay per view, etc). How long that is is subject to debate.
"What a crazy business"
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Re: Windows are GONE! 05 Mar 2007 23:24 #14525

  • sevstar
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Digital will make the print availability issue go away. But I don't see it changing terms. Right now terms pretty much are. 1. Can you gross enough film rental to cover first run print cost actual and "virtual". Not sure what virtual print costs are yet. 2. Do you charge the minimum per cap for first run which seems to be adults $5 now for evening shows in our zone.

It does look more and more like first run is going to be the only market left for theatre's eventually. As the windows close even tighter and tighter. Between theatrical release and all the other markets. These mega corporations that now own the studios. Will want to see faster returns on their investments. And I honestly don't see NATO doing squat about it. Never seen much out of NATO with distributors. NATO's only positive intermediary action has been when they join with other trade organizations. To add theatre owner voices to government issues of concern.

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Re: Windows are GONE! 06 Mar 2007 11:56 #14526

  • Mike
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I could always stay home and cook, but I go out to eat often. I like it. I don't have to cook, the atmosphere and service are important to me, I see people, and I have fun. And it costs me a hell of a lot more than if I stayed home and cooked.

Going to the movies is not just about could I have seen it at home for less. A nice theatre, with a good atmosphere, good service, good programming, and good goodies will always have a place.

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Re: Windows are GONE! 07 Mar 2007 14:23 #14527

  • BECKWITH1
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Mike,
I completely agree with your argument that people still go to restaurants even though they could eat at home. Although I also believe that the extra labor of cooking versus the ease of letting some one else do it adds an additional incentive to going to the restaurant which doesn't apply to the theater equation. If anything it is easier to stay at home and control your environment than it is to go to the theater and take your chances.

In any case, I believe that theaters will continue to exist. Unfortunately, I am afraid that the theaters that we all know and love may be an endangered species because the economics or the business are changing in enough ways so that the scales are being tipped in the direction of the large theater complexes. I hate saying this and have not wanted to say too much here because I don't want to be seen as a doom and gloomster. But I also have a bit different window on the cinema world than many of you guys and I have wondered if our experiences would help inform you as you made choices that would affect your future. In the first place I do understand that there will be survivors no matter how bad things get. The problems seem to be in deciding how best to apply your capital to be on the winning side rather than the losing side. Obviously, I don't have the answers or I wouldn't be getting out of the business. In some ways, the bad things that are happening to us may just effect the timing of our leaving the business rather than the fact that we would be eventually forced out anyway. We are currently the smallest first run theater in Cuyahoga County - aka Cleveland. Our closest competitor is either a 14 screen Regal within Cuyahoga County or an 8 screen in the next county. Both are about 5 miles away but that county line makes a world of difference. While there are many distributors and they make their decisions independently there is a certain consistent pattern to the way that decisions are being made regardless of individual film deals. Distributors decide how many prints they are willing to make and apportion them across markets. Cleveland is one of those markets. If they are opening ultra wide then we will certainly have no difficulty getting a print of a desired film if we want it. However, fewer and fewer films are being released either ultra wide or wide. All those test audiences and tracking numbers are helping the distributors carefully calculate how much money to put into advertising and print costs. If there are only 10-15 prints allotted to the Cleveland market we are not likely to get one. That means that our competitors will get them and anyone who would usually come to us has to go somewhere else to see them. They do go elsewhere, believe me they are not going to wait and see if we are going to get it. Sometimes we do, but they audience is 90% gone for that movie unless we open it. We all know that the shelf life of a movie is not at long as it used to be. Many movies have only a 2 week shelf life and the distributor doesn't care because he got what was to be made on the movie in the first weeks percentages. I used to hear comments when we were second run - "Why should I pay to see this movie when I can see it on DVD next week?. I hate that comment it is the reason why we bought a first run theater. Now I am hearing the same related comment from first run customers. Parents of kids are now saying - "Its been out a while we'll just rent it" on a movie which we are running first run AND IT IS ONLY A COUPLE WEEKS OLD. So the perception of the shortening window is causing people to shorten the window even more than the distributors are already doing. So how can I depend upon people to wait for me to get a film when their perception is that you don't wait to see a film because you can already get it on DVD/rental etc. So, I am getting squeezed on the allotment of films and the customers are correctly perceiving that the window is shortening and making it even shorter by their actions. Now remember my two closest competitors - the Regal in Cuyahoga has no difficulty booking the print I want - first because they have the leverage of a big chain and 2nd because they have so many more screens that the distributors will "service them" and 3rdly because they gross more than I do. Whoaa!!! how did that last one happen. It doesn't make sense that people would flock in droves to spend more money and have a worse experience than they can get here. But they do. For one thing, people get used to finding the film that they want to see at the big house and get used to going there. High school and college kids go there because it is cooler than my place to hang out. When the new theater opens in any town - everyone will automatically go there just to see what it is like. Unfortunately, that one visit costs them the opportunity to keep going to the older theater because they just helped to pump up the grosses at the new theater which in turn causes the new theater to get all of the new films. Old theater is inevitably forced down the economic ladder. So,we have been lucky up until now that no one opened in the same town - we can compete on an even footing but a direct hit will remove all the film from us not just the slow attrition of people getting used to going to the big places because that is where the film is. Remember, my other competitor in the next county? They have been operating much as you all - as a big theater in a small town. They can get prints that I cannot get even though we would gross higher than they would. They are not part of the Cleveland market and that makes all the difference. Unfortunately, the distributors are now applying some of their major market decisions to the small towns. You guys are seeing this as they apply formulas such as the one for Wild Hogs. You must have grossed so much on Santa Clause 3 in order to have been worthy of receving a copy of Wild Hogs. So you didn't get Wild Hogs and your customers can't understand why not. If they have choices they will not wait for you to get it. They will go and see it where it is playing. This weakens your theater. There are also a couple of films streams that routinely book picking up only the top 1500 theaters in the U.S so that you don't have a chance - many christian/religious films are booking this way and art/specialty films to the extent that they don't just go to the established art theater. (This is also helping to weaken art theaters at the expense of big multiplexes but that has already been covered in other threads.

Now there is something else which we have experienced and I am not sure it has come to the notice of most. NCM (forgive me if I get this wrong - National Cinema Media). There is a disturbing trend to release first run films only to theaters who have an NCM account number. Burney ran across this with Broken Bridges. You can't play it because you are not a member of the exclusive gang of big chains. They are doing other things also - We received a DVD copy of Casablanca by special DHL courier from them because apparently they had us booked to run a big theater rental with Humana Health Care whereby seniors could go see the movie and then get sold on healthcare at the same time. Casablanca was apparently being shown on the pre show
equipment. (I love messages on my answering machine which tell us that we are getting a special courier package and if we have any questions we could call our NCM representative or our corporate office - I am the corporate office and I don't have an NCM representative so now what do I do?).
So do you feel left out that those big guys are picking up income streams that you could only dream about?

Now on to Digital. While neither you nor I knows how this is all going to shake out, I have serious doubts that is it going to shake out in any way that is not going to make it more difficult for independents to survive the change. I don't know whether it is all going to be in the timing - get in early while there is still an allotment of equipment available for us independents that the distributors will gladly pay virtual print fees. Or wait, buy your own equipment at the then current asking price and tell the distributors that they don't need to pay any fees to get you a print. If they have to make a virtual print payment I think that we are on the same footing as we are now of getting a print. Probably, worse for a second run because in the current world once they make a print for someone they might as well use it 2 - 3 times more if possible. In the virtual print fee world they might easily balk at paying fees for the 2nd & 3rd tier theaters. From my perspective, this scares the hell out of me. Combine the corporate expense cutting trend - make fewer prints and put them in the top 1500 screens- with the cost of paying virtual print fees everywhere. I would want to be a single screen with lots of capital to buy my own digital equipment. Then maybe I can book any title I want. I might just be the sole survivor of the digital revolution in the ranks of small town theaters.

Sorry that this is so long. I hope that this was worth the time and effort to put into words for somebody. Please don't get me wrong I love this business and will probably hate being out of it for the rest of my life. But I can't figure out a way to stay in it at a new location that has any better chance of success than we had here. We can't afford to invest the capital necessary to start all over. Those of you who are already in the business have the best chance. Conserve your capital as you may need a pot of money to make the jump into the future. Good luck and best wishes!
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Re: Windows are GONE! 07 Mar 2007 15:40 #14528

  • Mike
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number of films relased sky rockets!

I just got a theatrical market study.

mpaa and indie films
total released for the year

2002 449
2003 459
2004 474
so far so good....
2005 535
2006 599

This goes to my point that with all these movies in the que it pushes them out of the theatre and onto DVD shortening the window.

It also makes my point: there is more movies made than ever! And a lot of them are good.

Michael Hurley
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Re: Windows are GONE! 07 Mar 2007 22:57 #14529

  • rufusjack
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Roxy,

I am in Mid-missouri. I just booked a pretty strong movie for its 4th week and a underperformer for the third week and my film rental on both is 35%. I have been pleasantly suprised on how quick the splits have dropped. I am seeing 35% being the case for most movies the 3rd week and older.

Mike,

Recall that I have been in the video business for over 16 years. Yes there are many more titles than before, but they lack consumer awareness.

The number of titles released ytd since 2003 with over 2500 locations are: 2003 -14, 2004-14, 2005-14, 2006-13, and 2007-12.

Not sure that a large number of films helps the theatrical side of business except for maybe the megaplexes.

As a Video Store owner, this trend has been wonderful for my bottom line. A title like "World's Fastest Indian" with 250 locations at it widest will perform wonderfully for me. The lower awareness titles are performing better as the high-profile titles are performing worse due to people purchasing on DVD.

But, trying to survive the time in between the wide-wide releases as a theatre owner is tough right now.

Mike
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