More voices weighing in on issue of theater ownership by studios

posted by CSWalczak on June 17, 2010 at 10:45 am

HOLLYWOOD, CA — It is probably too early to call it a movement, but more is appearing in print on the issue of studios once again operating their own theater circuits, as reported here on CT previously. Key points in the growing discussion include who gets to control the length of the theatrical distribution window, the effects of the explosion of technology that is seriously eroding the DVD market, and whether current market conditions warrant revisitation of the issues raised in 1948 Supreme Court decision that limited the ability of studios to operate movie theaters.

There is more in Variety.(reg rqr’d)

Comments (11)

John Fink
John Fink on June 17, 2010 at 2:04 pm

This is such an awful idea, just look at IFC Center. I paid $12.50 to see the excellent new Safdie Brothers movie in a theater with 32 seats, projected from a cheap digital projector and Blu Ray DVD player (I know because before the feature we saw the Blu Ray disk logo appear – it’s becoming a common art house format).

IFC has a monopoly in the New York area anyway on this film: you want to see it – either come to our theater, rent it from our on demand cable channel that’s on our cable system. I suppose the alternative is not seeing it at all or waiting for it on netflix. But imagine what studios owning their own theaters might do – there’s a reason there is indirect ownership now (joint ventures, holding companies owning theaters and studios, ect). IFC and Clearview have only tried it with indie films (look back at The Baxter, it was playing exclusively at the IFC Center and Clearview Cinemas – both owned along with its distributer by Cablevision, if Paramount released Iron Man 2 exclusively to National Amusements for two weeks there would have been anger.

These things can happen and would happen, another example I give is a territory where theater chains split bookings, granted bigger chains sometimes get more pull in this area each film should be booked independently so that Summit can’t say “you have to show The Ghost Writer to get the new Twilight flick”. Haven’t we proved deregulation leads to all sorts of bad things – sure film is also a business but its an important piece of our culture and serves to preserve our cultural, morals, and really the zeitgeist. Allowing the studios again to be vertically integrated controlling the chain of supply and delivery will lead to the tightening of windows, more day and day content and less options. Look at IFC – they acquire too many films, give many films by master filmmakers a token release just in NYC and as a result the theatrical experience is something only a privileged few can partake in, the rest will have to see it on demand. This allows its distributor to spend less on marketing and starves art cinemas of quality products by auture filmmakers with name recognition.

Al Alvarez
Al Alvarez on June 17, 2010 at 7:57 pm

Interesting in that article is that although Mark Cuban champions distributor ownership of theatres in order to plays his VOD releases at his key Landmark theatres, he refuses to allow such IFC releases at those same theatres. This denies IFC access to some of the best grossing specialized theatres in the country for their similarly released VOD titles.

Therein lies the rub for this hypocrite’s position. He is trying to monopolize distribution and exhibition of independent films and destroying the market for everyone (including himself) as a result.

JohnMessick on June 17, 2010 at 8:56 pm

I never thought of Mark Cuban as extremely bright.

Ron Carlson
Ron Carlson on June 18, 2010 at 7:09 pm

With reguards to the showing of DVD’s in art house theaters. I run an independent art house and while we prefer 35mm film it is becoming increasingly harder to get. I am now playing 3 releases and one of those was shipped to me as a DVD. No choice was offered a DVD arrived and that’s what I will show. The film is “Mid-August Lunch” an Italian comedy. I have found that this is becoming more and more prevelant.
I’m still up in the air about the studio’s owning their own theaters again, there are good things and bad.

John Fink
John Fink on June 19, 2010 at 8:21 am

Thanks Ron, correct me if I’m wrong but I assume in the case of Paranormal Activity 35MM prints weren’t struck until they had to be (which might explain why it took a while to go wide once it was clear it was a hit).

With that said I’ve noticed more and more festivals and art houses screening off SD and HD DVDs and other digital formats which have some advantages. In the case of the new Rush movie, it was digitally released so theaters had the flexibility of showing it at times when they weren’t typically crowded. I think in the move to go digital this could be a model for releasing documentaries and art films in a low risk way which is good, but I have no doubt this is the reason many don’t open wider or (I’ve seen this in Buffalo) there are these new digital film cafes popping up: if art films can’t play at art houses which only have pre-show projectors then perhaps this is an option.

Simon Overton
Simon Overton on June 20, 2010 at 1:39 pm

Am I a twit or wasn’t just about everyone doing just fine, many years ago, until some bright “Yankee” spark got a bee in his head to have Congress kill the studio owned cinemas across the country?

To me, it seems that the big houses went into financial difficulty and had to be sold off or closed. Will someone PLEASE set this old former “Limey” showman straight. Ta very much!

CSWalczak on June 20, 2010 at 4:54 pm

Simon, I’m not an expert on this, and a full discussion would fill books, (and has) but, based on my reading, essentially, the U.S. Supreme Court (not Congress) determined in 1948 that the major studios ownership of their large theater chains amounted to a vertical monopoly, thus creating an unfair “restraint of trade” as far as the distribution and exhibition of films was concerned. The decline of the central city movie houses can partially be attributed to this decision, as obviously studio interest in maintaining deluxe urban theaters gradually evaporated.

However, there were other factors as well – the flight of many people to the suburbs after WW II, the decline of American downtowns as central shopping centers, increasing street crime in some areas, the increasing use of cars as opposed to public transport (many movie palaces had no parking), and the maintenance costs of the huge old theaters all contributed to the decline of the big houses. Changes in exhibition practices (especially the gradual switchover from studios releasing a film in just one a or a few theaters in the downtown or uptown districts and then gradually spreading the release out to upper tier suburban houses, and then into second runs in neighborhood theaters to opening the film wide in several theaters through metropolitan areas) all took their toll. The rise of the multiplexes, which accelerated by the mid-1960s, with their wider choice of films, also has to be considered.

To learn more, use a search engine to research the term “Paramount Decision” or “Paramount Consent Decree”.

Al Alvarez
Al Alvarez on June 20, 2010 at 9:36 pm

Simon, I will just give you one example.

In 1958-1959 the biggest and best theatre in the world was the Roxy in New York. In those years the top releases were Ben-Hur, The Ten Commandments, The Shaggy Dog, Auntie Mame, No Time for Sergeants, Some Like It Hot, The Vikings, Pillow Talk, Operation Petticoat and Solomon and Sheba.

How many of these opened at the Roxy?


The Roxy was a Fox house and Fox had no big hits to provide. The Roxy was closed and demolished by 1960.

Many high-grossing independent theatres were driven out of business when the distributor owned a local flea-pit and would not provide product to the flagship house no matter how much they were willing to pay. The distributor closed the flea pit when TV came in and the town then had no theatre at all.

Lack of competition killed the market.

Al Alvarez
Al Alvarez on June 20, 2010 at 10:16 pm

I should point out that although the Consent Decrees were passed in 1948, they have always been mostly ignored by distributors in major markets.

CSWalczak on June 21, 2010 at 12:53 am

An additional factor in the case of the demise of the Roxy, (which, as AlAlvarez points out was very much due to its connection to 20th Century-Fox and that studio’s lack of high-quality, high popularity product) was the unfortunate decision in 1958 to install Cinemiracle there, the Cinerama-like process that was promoted by National Theaters which was intimately connected to 20th-Century-Fox. The only feature produced in the process, “Windjammer,” flopped badly there. I am sure that its promoters hoped that it would match the success of Cinerama, turning the Roxy into a popular, reserved-seat house, like the Rialto or Loew’s Capitol, but it did not happen.

Simon Overton
Simon Overton on June 23, 2010 at 1:25 am

Thank you CWalczak and AlAlvarez for you fascinating information. Now I can speak with ‘authority’ to others regarding the demise of the cinema system we once knew… and loved… and miss terribly!

I know the multi-black shoe box-plexes have strangled the single screen houses but I still support the few remaining movie palaces here in Salem/Portland areas of Oregon!

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