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
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