An
Open Letter On The State of Exhibition
Bob
Arnold
Editor-in-Chief
BUSINESSWEEK ONLINE
Dear
Bob:
I write
to call your attention to very serious errors in a recent
column in the online edition of your publication. It is
unfortunate when reporters get their facts completely wrong,
but it’s particularly damaging when it happens in a
business publication as important as yours. I take little
consolation in the fact that the column only appeared online
and not in the print version of your magazine. Many financial
analysts and other important observers conduct their research
the same way I do – online.
In their
recent (Oct. 11) column entitled
“French Cinemas: Slow Saga, Happy
Ending,” Benjamin Barnier and Christina
W. Passariello compare the movie theatre industry in France
with that here in the United States. Their description of
the U.S. industry has no basis in current reality, and damages
our business in the eyes of your readers.
Barnier
and Passariello describe the U.S. multiplex chains as being
“in dire straights.” “Theatres are going
belly up at the rate of one a day.” “Screens are
going dark.” “Four major theatre operators –
including Loews Cineplex and AMC – have declared bankruptcy.”
Though
the U.S. theatre industry did go through some very challenging
times, including some bankruptcy reorganizations, that period
began and ended some time ago. No U.S. movie theatre company
remains in bankruptcy. (And by the way, AMC has never declared
bankruptcy.) Our business is very strong.
In 2001, the U.S. exhibition industry experienced its best
year at the box office ever – grossing a record $8.4
billion. People bought more movie tickets last year –
1.49 billion – than during any other year since the
1950s. And amazingly, 2002 is on track to eclipse even record-shattering
2001. Year-to-date box office receipts are up 13 percent
compared to the same period last year, and admissions are
up 10 percent (the difference is accounted for by slightly
higher ticket prices).
In other
words, people are going to the movies in numbers not seen
since the advent of television.
Movie
attendance is strong for several reasons. U.S. exhibitors
built the finest complexes possible – including stadium
seating, digital sound systems and many other amenities.
Moreoever, the commercial strength of the particular movies
in release has never been stronger.
But
there is something more going on in America. Americans feel
economic pressure. Americans are uncertain about international
peace and domestic tranquility. The movies provide a much-needed
break from the pressures of the day – and a record
number of Americans are taking advantage of that opportunity.
These
numbers are reflected in the bottom line of our companies.
While most of corporate America announces weak financial
returns, our exhibition companies have produced strong profits.
We have
closed some theatres, as we should, but I don’t know
how or why your publication surmises that “theatres
are going belly up at the rate of one a day.” In September
2001 there were 35,952 movie screens in this country. In
September 2002, there were 35,911. But even if closures
were somehow proceeding at the rate you describe, it’s
fundamentally misleading to ignore the fact that only three
years ago U.S. cinemas were opening at the rate of 10 screens
per day. Informed analysts therefore see closures of older
properties as natural and necessary to the continued excellent
health of the industry.
The
U.S. theatrical motion picture exhibition business has never
been stronger, but if one were to believe your reporting,
one would conclude quite the opposite. Please do your research
in the future.
Thank you.
Sincerely,
John
Fithian
