The
Panic
of ‘91
by John Fithian
NATO President
As our readers know, exhibition recently suffered
through another cyclical downturn with all the concomitant
ranting in the media about the imminent death of the movie
theatre, the perceived lack of value of the experience and
the evolving entertainment options in the home.
We are beginning to turn the public perception
tide as the numbers pick back up, and people realize that
what we have
been saying is true – the short-term cycles depend
on the product, while the long-term prospects for our business
are sound.
We recently came
across former NATO president Bill Kartozian’s ShoWest speech from February 1992,
as reprinted in NATO News and Views later that spring. The
more things change, the more the stay the same. Bill’s
words from that year sound strangely similar to my own of
late. (I guess I learned from the best.) He talked about
the cyclical nature of the business, he predicted (accurately)
a return to growth after two bad down-years, he welcomed
ancillary distribution outlets like pay-per-view only if
a strong theatrical window was maintained, he decried the
concept of simultaneous release to theatres and the home,
and he described the true value of the moviegoing experience.
With Bill’s permission, we reprint that speech here.
As you read it, remember that during 1990-1991 admissions
fell by 10 percent in the United States. (Indeed, admissions
in 1991 were lower than those in 1982.) In the three years
following Bill’s delivery of this speech, admissions
climbed 13 percent. Also remember that admissions averaged
985 million per year during the 1970s, 1.1 billion during
the 1980s, 1.3 billion during the 1990s, and 1.5 billion
so far this decade. We operate in a long-term growth industry,
even if the short-term cycles vary widely.
Here are Bill’s words:
The State of
the Industry
by William F. Kartozian
NATO President
February 18, 1992
Last year at this time I said to you
that while I was as bullish as ever about the long term prospects
of Exhibition,
I had concerns about the short term.
Those concerns had to do with the
cycle of product, which I felt was entering into an ebb period,
and the economy.
My concerns were well founded, for
although 1991 box office will have been the third highest
on record, theatrical attendance
fell to a 15 year low.
I do not have those same concerns
today.
In my opinion, 1991’s results
were 80 percent product driven and 20 percent economy driven.
In the latter regard, it should be
clear by now that with all of the in-the-home entertainment
options available to
people, we are not recession proof. We are recession resistant,
however, as the least expensive form of out of the home entertainment.
In fact, when we experience a fall-off in our business due
to economic hard times, it is probably a signal that the
economy has bottomed out and that in the normal course of
events a recovery soon will begin. (The recovery will begin,
that is, if the general media – which is mired in its
own depression – will ever lighten up, see beyond its
own narrow borders and allow the public psychology to rebound
a bit.)
I suppose we should be grateful that
as an industry we are so much in the public eye, but as Paul
Roth recently pointed
out to me, it seems almost bizarre that the media would concentrate
more on how much films cost, how much they gross, and how
much it costs to go to the show, than on what films are about
and how good they might be.
Incidentally, with regard to the
price of movie tickets (and I am indebted to Alan Friedberg
for this precise information):
from 1980 through 1990, the average price for two adults
and two children to go to the show increased 55 percent.
The cost of living during that period increased 56 percent.
During that period, the Boston Globe increased its daily
advertising rate 122 percent, and the New York Times increased
its daily rate 193 percent!
In light of these kinds of numbers,
we should be talking about what a great value movie tickets
are – not how
expensive it is to go to the show.
So, the economy will turn (if it
already hasn’t) and,
as we move out of hard times, we shall move away from silly
surveys that purport to show that the public would rather
pay $1 for a videocassette than $5 for a movie ticket.
I am certain that I could frame a
survey that would purport to show that the public prefers
to pay nothing to watch a
football game on TV than to pay $20 or $30 or $40 to see
the game in person. My survey, however, will not stop millions
of people from attending football games each week because
you cannot compare apples and oranges.
WATCHING TELEVISION AND GOING TO
A MOTION PICTURE THEATRE ARE NOT THE SAME THING! To compare
the price of attending
a motion picture theatre with the price of renting a videocassette
is no more appropriate than comparing the price of a dinner
at Maxim’s to the price of a can of Campbell’s
soup.
The product cycle too has turned,
as evidenced by the tremendous holiday business that we experienced
and by the rejuvenated
level of business since then.
While year to year comparisons will
be misleading during 1992 due to last year’s very erratic box office performance,
with the projected flow and quality of this year’s
product, I am confident that 1992 will easily best 1991 in
terms of gross and in terms of attendance.
About ten days ago, I saw “Fried Green Tomatoes.” It
was a weekend matinee performance and the theatre was crowded
with some 400 to 500 people.
I was taken with the fact that the
audience averaged about 60 years of age. But as I thought
about it more, I remembered
seeing similar audiences at “Driving Miss Daisy” and “Amadeus.”
This is an age group that supposedly
is not fertile territory for us to farm as potential customers.
And yet here they
were: laughing together, crying together – at the end
of the film, applauding together – thoroughly enjoying
the movie and obviously enjoying the occasion of leaving
home for an outing at the local cinema.
I learned two things from this experience.
First, if you make the film, they will come. Let’s not “write
off” any segment of the population as one which does
not like to go to the show. (And to those who create movie
magic, I would remind you of what George Kerasotes recently
reminded me: those blockbuster grosses which we all love
to see usually attach themselves to films which appeal to
and which are suitable for a broad range of audiences.) While
it may be exciting to always push the outer edge of the envelope,
the letter is the important thing, and most people like to
read within the margins.
The second thing which impressed
me at my recent day at the movies was that there is no way
that those 400 to 500 people
could have replicated their individual or collective experiences
in a place other than a movie theatre. For while we may be
only a piece of real estate, we are that piece of real estate
in which dreams are told and stories unfold as they can in
no other place.
Not only could these folks not replicate
their experiences elsewhere, the fact of the matter is that
this wonderful
story could not reach the number of people it is reaching
if it were to be shown, say, on TV in some fashion. How could
you possibly build the word of mouth awareness of this film
if it were to be shown initially in a medium other than a
movie theatre?
And this leads me to the last item
about which I wish to speak with you today.
During the last several months there
have been a number of rumblings about how much more important
pay-per-view is going
to become as an entertainment delivery medium.
If pay-per-view becomes an important
new source of revenue for film producers, all the better
for exhibition so long
as the theatrical window is maintained.
In my opinion, exhibition has benefited
from the development of ancillary markets which return more
dollars to producers
to invest in more feature films.
It is equally clear to me that every
segment of the industry has profited from an orderly pattern
of distribution which
insures a clear theatrical window of at least six months.
The after-markets themselves clearly
benefit from a successful theatrical release. To violate
the window which insures a
film’s successful theatrical release places in jeopardy
the entire cash stream which that film should realize.
But, there have been rumblings and
from more than one quarter that there may be attempts to
shatter the theatrical window
by taking a film to pay-per-view either prior to or day-and-date
with theatrical release.
Such an attempt would be both shortsighted
and selfish.
It is difficult for me to imagine
the important segments of the creative community agreeing
to this pattern of distribution
for the works of art which they create.
It is my personal belief – speaking for no one else,
and specifically not for the National Association of Theatre
Owners – that: ANY EXHIBITOR WHO AGREES TO PLAY A FILM,
EITHER WITH A PAY-PER-VIEW ENGAGEMENT OR BEHIND IT, WILL
BE COMMITTING ECONOMIC SUICIDE.
I hope that common sense will prevail
and that exhibitors will not have to make this decision.
