Boxoffice-March.1988

PROGRAM: THE FATE OF INDEPENDENT
THEATRES
Wednesday, February 24, 9:30 a.m.
By Tim C. Warner
President, Theatre Operators, Inc.
OUR
INDUSTRY AND its leaders have
demonstrated these past several
years that the only constant in life
is change. We have gone through sweeping
changes, challenges and opportunities
in exhibition: consolidation of theatres,
ownership by distribution, unbridled expansion
by both exhibition and distribution,
and entry of the video market, just to
name a few. Whether these changes bid
well for our industry only history will tell,
but one factor that has remained a constant
for us is the ongoing struggle for the
survival of independent theatres. It is to
this struggle, "The Fate of Independent
Theatres," that I would like to address my
remarks.
I have been involved with this stRiggle
as an independent theatre owner, an
independent film buyer and through various
exhibition groups for the past 18
years. During this time I have become
convinced that the well-meaning leaders
of our industry, from both exhibition and
distribution, want independent exhibition
to survive, but that the realities of the
marketplace countinue to threaten their
existence. This is not a new struggle for
our industry but it does have new participants.
In the past when you referred to
independent threatre owners you basically
were referring to limited-market
theatres. Now, you are referring to
theatres that are now owned by huge conglomerates
or film distribution companies.
These independent theatres, just a
few years ago, would have been considered
some of the larger circuits in the
country. Now, you have two groups of
independents: the limited markets and
independently owned small and large regional
circuits.
A few years ago, I was working with
NATO as head of the Regional Presidents
and as chairman of the Limited Market
Committee. Under the direction and with
the assistance of Dick Orear and Joel Resnick,
we held meetings with the heads of
every distribution company and to a person
they gave what I felt was a sincere
commitment to the survival of the limited
markets at that time. In fact, Barry Reardon
of Warner Bros, developed a plan
which, at that time, was not widely
adopted, to sell small markets on a flat
basis. His plan now is being adopted more
and more by distributors. I felt then and
feel today that selling these markets flat
is the preferred solution of the film companies'
top executives but the policy
needs to be instituted at the sales level.
However, with the consolidation of
branches this policy of selling limited
markets flat is going to become a necessity
for the industry to function.
The other complaint of smaller market
theatres is the problem of getting prints
on a more timely basis. The truth of the
matter, of course, is that what the smaller
(continued p SW-H)
By Merv Viner
President, Cinema Service, Inc.
RECENTLY,
AT A luncheon with the
Branch Manager of a major film distribution
company, I asked him if he
was aware of the amount of film rentals
our clients had paid his company over the
last year He regrettably could not answer
the question.
The next day, he called and said, "I
never realized how much business your
clients do with our company. Last year, of
$12,000,000 in total billings, your share
was over $700,000 (approximately 6 percent)."
This astonishing figure represents film
rentals paid primarily from subsequent
run, small town, and split week situations,
which comprise the bulk of our clients.
However, last year, the president of
another major film distribution company
commented in one of the trade journals
that there is no sub-run in distribution any
more. With narrow-minded attitudes like
these what is the future for independent
theatres?
The importance of the sub-run theatre
should be obvious to the entire film distribution
arena. When a film opens at 1,000
screens, what happens to those 1,000
prints when they come off? If I am not
mistaken, they continue to play at subrun
theatres. It also seems to me that if a
film is on the screen, film rental is being
earned. This earned film rental helps pay
for print costs, advertising, and the salaries
of executives that maintain there is
no subsequent run for films.
In regard to theatre operations, the
independent exhibitor does not live by
corporate dogma. An "indie" can change
any part of the operation, pricing, scheduling,
advertising or anything else that he
or she desires.
In my opinion, what most "indies" la