Film exhibitors: Hard to move forward

Business strong, but recession stalls equipment rollouts

The industry's conundrum: Boxoffice is booming, but the credit crunch is keeping exhibitors from rolling out new theater systems as quickly as they'd like.

"It seems like we have one foot in the present and one in the future due to the financial markets," said Lee Roy Mitchell, chairman of the large Cinemark theater chain and a decades-long fixture on ShoWest panels like the one that kicked off the annual confab Monday.

The weekend's monster opening for DreamWorks Animation's "Monsters vs. Aliens" was ample validation that the industry's costly rollout of digital and 3-D projection systems will pay off quickly, Mitchell said. But he noted that financing for such equipment rollouts remains stuck in low gear.

Still, much of the well-attended panel, moderated by The Hollywood Reporter editor Elizabeth Guider, swung on a much more quality problem: how to manage the boxoffice boom in a manner befitting the economic climate.

"We're not being complacent in any way, even with the good boxoffice," Sony worldwide distribution president Rory Bruer said.

"We're looking at this as an opportunity," said Tim Richards, CEO of the U.K.-based Vue Entertainment circuit. "So that means getting to know your customer better than ever before."

He noted that Vue recently introduced value pricing on its concessions menu for weekdays, acknowledging some flattening in demand for food and beverages by recession-wracked consumers.

"We're managing today's prosperity as a reinvestment in our future," Harkins Theatres chief Dan Harks said. "We're keeping our concession prices where they have been for two years."

The panel plied a theme of "staying ahead of the curve" in tough economic times. But international execs participating in the discussion said even more severely challenged foreign markets have seen relatively robust boxoffice of late.

"On balance, the first quarter has been very strong, and it all comes down to the (film) product," said Andrew Cripps, president of Paramount Pictures International.

Even piracy-prone Russia has been going great guns, with Rising Star Media aiming for two digital screens per venue in the territory if financing can be lined up.

"Fortunately, in Russia we're used to crises," Rising Star president Paul Heth quipped.

DreamWorks Animation chief Jeffrey Katzenberg lauded the job exhibs have done in getting 3-D systems up and running for the global launch of "Monsters."

"Given the current financial market, exhibition has done a pretty terrific job," Katzenberg said.

That didn't keep the studio chief from sparring a bit with exhibs on the panel over the issue of film terms for 3-D releases, especially for small-market exhibs.

"Small towns can't afford the economics of bigger markets," Harkins said.

Katzenberg's effective rejoinder: Anybody looking for a return on their film rentals need only mark up their 3-D admissions accordingly.

"I spend $165 million making a movie at DreamWorks Animation and some else spends $6 million, and the ticket is the same price?" he asked rhetorically.

On "Monsters," theaters have been charging an average of roughly $3.50 more than for tickets to 3-D film than for 2-D.

Meanwhile, the panelists agreed that 3-D represents another big success story in a rosy year-to-date marketplace that has exhibitors and distributors pinching themselves. Vue's Richards said it's important to be aware that the good times might not roll indefinitely.

"What's happened in the last few recessions was that right afterward there was a downturn in the business," he said. "So the question really is, how do we keep this going?"

ShoWest continues through Thursday at the Bally's and Paris hotels here.
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