A Cineplex Pitch: Hey Hollywood,
Make Better Movies to Lure Crowds
'Not as Good' Films Play
A Role in Box-Office Woes,
Theater-Chain Owners Say
By MERISSA MARR
Staff Reporter of THE WALL STREET JOURNAL
August 19, 2005; Page B2
With Hollywood in the throes of rethinking its business model, movie-theater owners went on the attack, blaming the industry's problems on the choice of films being made rather than any shift in the behavior of movie-goers.
The National Association of Theater Owners blasted Walt Disney Co. in particular for comments made by incoming Chief Executive Robert Iger. Against the backdrop of declining box-office and DVD revenue, Mr. Iger last week said the industry needs to consider rejiggering the release of movies, perhaps in a way that would result in a film's DVD coming out simultaneous with its theatrical release.
Such a plan has been discussed in Hollywood for some time, but no major film has been released that way. Theater owners, however, are sensitive to anything that curtails a film's exclusive run in cinemas.
"Mr. Iger considers the slowdown in theater box office and DVD growth a 'wake-up call' for the industry," said John Fithian, president of the theater-owners group. "I'm not sure who was asleep but it wasn't the exhibition industry."
He added: "Here's what we know about 2005: the movies are not as good. They're not terrible. They're just not as good."
A spokeswoman for Disney declined to comment.
U.S. box-office revenue has declined 7.35% this year, according to box-office tracking firm Exhibitor Relations. To boot, sales in the DVD market are burning out faster, denting titles such as "Shrek 2" and "The Incredibles."
Unsure of the exact causes, the movie industry has offered up a medley of possible explanations, including increasing competition from other sources of entertainment such as videogames, the rise of media piracy and a fundamental shift in the way people consume entertainment.
Under current practices, Hollywood staggers the release of movies in different distribution channels. That has meant that a studio usually has waited six months after the release in theaters before putting a title out on DVD and VHS. Partly because of the rise of piracy, studios have shortened that window to as little as four months.
Many movie-theater chains see that shift as a looming death sentence for their business. On Disney's earnings conference call last week, Mr. Iger suggested that the release structure may need to compress still further because consumers are more demanding on when they consume entertainment.
"I don't think it's out of the question that a DVD can be released in effect in the same window as a theatrical release. Although I'm sure we will get a fair amount of push back from the industry, it's not out of the question," Mr. Iger said. "I think that all the old rules should be called into question, because the rules in terms of consumption have changed so dramatically."
The attack on Disney, Burbank, Calif., is a rare example of the movie theater chains publicly challenging the studios. While their relationship has at times been strained, the theater owners and the studios have found a way to work together because of their shared economic interest.
Write to Merissa Marr at merissa.marr@wsj.com
Make Better Movies to Lure Crowds
'Not as Good' Films Play
A Role in Box-Office Woes,
Theater-Chain Owners Say
By MERISSA MARR
Staff Reporter of THE WALL STREET JOURNAL
August 19, 2005; Page B2
With Hollywood in the throes of rethinking its business model, movie-theater owners went on the attack, blaming the industry's problems on the choice of films being made rather than any shift in the behavior of movie-goers.
The National Association of Theater Owners blasted Walt Disney Co. in particular for comments made by incoming Chief Executive Robert Iger. Against the backdrop of declining box-office and DVD revenue, Mr. Iger last week said the industry needs to consider rejiggering the release of movies, perhaps in a way that would result in a film's DVD coming out simultaneous with its theatrical release.
Such a plan has been discussed in Hollywood for some time, but no major film has been released that way. Theater owners, however, are sensitive to anything that curtails a film's exclusive run in cinemas.
"Mr. Iger considers the slowdown in theater box office and DVD growth a 'wake-up call' for the industry," said John Fithian, president of the theater-owners group. "I'm not sure who was asleep but it wasn't the exhibition industry."
He added: "Here's what we know about 2005: the movies are not as good. They're not terrible. They're just not as good."
A spokeswoman for Disney declined to comment.
U.S. box-office revenue has declined 7.35% this year, according to box-office tracking firm Exhibitor Relations. To boot, sales in the DVD market are burning out faster, denting titles such as "Shrek 2" and "The Incredibles."
Unsure of the exact causes, the movie industry has offered up a medley of possible explanations, including increasing competition from other sources of entertainment such as videogames, the rise of media piracy and a fundamental shift in the way people consume entertainment.
Under current practices, Hollywood staggers the release of movies in different distribution channels. That has meant that a studio usually has waited six months after the release in theaters before putting a title out on DVD and VHS. Partly because of the rise of piracy, studios have shortened that window to as little as four months.
Many movie-theater chains see that shift as a looming death sentence for their business. On Disney's earnings conference call last week, Mr. Iger suggested that the release structure may need to compress still further because consumers are more demanding on when they consume entertainment.
"I don't think it's out of the question that a DVD can be released in effect in the same window as a theatrical release. Although I'm sure we will get a fair amount of push back from the industry, it's not out of the question," Mr. Iger said. "I think that all the old rules should be called into question, because the rules in terms of consumption have changed so dramatically."
The attack on Disney, Burbank, Calif., is a rare example of the movie theater chains publicly challenging the studios. While their relationship has at times been strained, the theater owners and the studios have found a way to work together because of their shared economic interest.
Write to Merissa Marr at merissa.marr@wsj.com
