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ShoWest Opens In Vegas

4 Mar, 2002 By: Nicole S., Marla R.

LAS VEGAS -- As ShoWest 2002 raises its curtain today in Las Vegas on the annual gathering of exhibitors and distributors, the financial doldrums that have plagued the film exhibition industry for the past 18 months are becoming a faint memory. The one cloud that remains seems to be confusion surrounding progress on the digital cinema front.

The financial crisis that forced a dozen chains into bankruptcy since 1999 has almost run its course, marked by Loews Cineplex receiving court approval for its $900 million reorganization plan on Wednesday.

According to John Fithian, president of NATO, 2001 marked one of the best years for the exhibition industry. "Admissions are up, screen count is down," said Fithian. "That has not happened to our industry in a decade. In previous years, box office rose but screen count rose at a faster pace. This year, both trends went in the right direction."

Fithian and MPAA president Jack Valenti are expected to reveal specific box office statistics at their welcoming remarks on Tuesday.

"We essentially had our recession before the country did," said Fithian. " The theater chains emerging from the bankruptcy process are leaner and meaner."Not only are the chains no longer carrying the weight of low-performing theaters, the buying spree a few well-funded investors engaged in has also resulted in a marketplace with fewer owners. Denver billionaire Philip Anschutz has scooped up 6,000 theater screens, or 20 percent of the U.S. market, with the bankruptcy court purchases of Edwards Theaters, United Artists Theater Circuits, and Regal Cinemas. Toronto-based Onex Corporation now owns Loews Cineplex and Galaxy Theaters in Canada and, according to sources, the company may not yet be done buying.

That would suggest that consolidation and what it means for the industry should be the main topic of conversation at ShoWest. But according to one exhibition executive, "There's not much left to talk about. There has been some consolidation and it's not yet clear if there will be more. But either way there's not much left to say."

What the consolidation may reveal is the importance digital cinema plays as an emerging issue for the industry.

A new management structure announced last month for Anschutz's properties anointed Regal's Mike Campbell as the new CEO of the largest theater chain, while United Artists CEO Kurt Hall become lord of a new company formed under Anschutz to focus on ancillary revenues and new technologies.

One of those new technologies is, of course, digital cinema.

While questions — such as what standards will be used, is the technology ready and how are the business plans going to work — abound, answers remain few and far between.

"Clearly I think there is going to be a lot of talk, but not much action," said one exhibition executive. "There will be a lot of demos and a lot of business plans presented but I don't think there will be many transactions. The technology is getting better but the price point is too high and there are too many questions to be answered."

One of the technology companies demonstrating their new wares will be Kodak, which will unveil today an advanced prototype of its full digital cinema system.

Boeing Digital Cinema, Technicolor and Qualcomm will also be demonstrating their systems. Texas Instruments' DLP Cinema division is scheduled to host the convention's opening-night dinner Tuesday.

However, according to Ken Suddleson, partner at law firm Morrison & Forrester Llp., "If the show stays true to all the discussions of digital cinema at recent conferences, then I think it will be fairly low profile. Much less presence then in the past."

Last year's show was highlighted with a bold announcement by Technicolor Digital Cinema and Qualcomm Technologies to "seed" the market with 1,000 digital systems in a year's time. Since then only 10 have been installed and a lot of hard lessons were learned along the way.

"Had we seen Technicolor hooking up with distribution and exhibition this past year, it might be different," said one distribution executive.

But digital will be present, at least from the filmmaker side. A lot of fanfare is expected from a special presentation by Rick McCallum, producer of Star Wars: Episode II — Attack of the Clones, scheduled for Tuesday night, along with exclusive footage from the upcoming May release. McCallum will discuss Lucasfilm's evolution from film to digital filmmaking.

The exhibitor's voice in the digital discussion, which has been noticably absent from the debate, could move to center stage.

And while industry veterans expect some rumblings from the new digital coalition established by the studios, others closely involved with the coalition don't expect any announcements.

In keeping with the trend of recent years, two studios are hosting big events at ShoWest while the rest either sit it out or host smaller and less costly screenings or parties. This year's all-delegates bashes are being hosted by Sony and MGM, both of which are also unspooling summer releases for attending exhibitors.

On Tuesday, MGM will host lunch, preceeded by a screening of its World War II drama Windtalkers. The studio is also planning an appearance by Steve "The Croc Hunter" Irwin, star of its upcoming The Crocodile Hunter Collision Course.

" Windtalkers is our big, big summer movie. It's finished, and we're excited about it," said Robert Levin, who took charge of MGM's marketing and distribution last year. "We'd been planning to do a screening of Windtalkers anyway. Then we went to Australia and met with Steve Irwin, and he got excited about doing an appearance." Irwin will bring along "surprise animal guests" to the event, which is sure to draw media attention.

"ShoWest is definitely becoming as much of a publicity event as a trade event," said Levin, acknowledging that coverage of Irwin's appearance would be just as welcome as exhibitor interest.

Like other studios, though, MGM isn't reliant on ShoWest for attention, but whips up interest in big upcoming pictures year-round by inviting exhibitors to special promotional events. Speaking by cell phone at the end of last week, Levin was returning home from London from an event touting the next James Bond film to which MGM had flown exhibitors.

Disney — which last year stated an event promoting "Atlantis" in Las Vegas, concurrent with ShoWest — won't be returning to the desert gambling resort this year. The studio is likely to bring exhibitors to Los Angeles to talk about its upcoming films closer to summer, as it has in years past.

DreamWorks isn't hosting a screening this year as it did last year for Shrek, but the studio is throwing a small, invitation-only party close to the convention for its upcoming animated film Spirit: Stallion of the Cimarron. The event won't be a screening, but will feature a performance by Bryan Adams and Hans Zimmer of music from the movie's soundtrack.

Universal is screening the Hugh Grant comedy-drama About a Boy from Working Title Films, for conventioneers on Wednesday evening. The following morning, the studio is hosting a small, invitation-only breakfast featuring Boydirectors Chris and Paul Weitz, producers Jane Rosenthal and Eric Fellner and several studio executives.

Sony is tight-lipped about its exact plans for ShoWest, but it is expected to be bringing the most star power to this year's convention to pave the way for such anticipated summer releases as Spider-Man, Men in Black 2 and Stuart Little 2.

The studio will be screening the Adam Sandler-Winona Ryder romantic comedy Mr. Deeds
"We're breaking it into fun pieces. We're not going to do the traditional huge ShoWest luncheon with a huge dais and a huge reel," said Sony marketing and distribution chief Jeff Blake.

"It's not unusual for Sony to plan some surprises," he added.

Though the studio is not announcing its own plans, Blake said it would have executives at Thursday night's Awards Banquet in support of award winners Will Smith, Jennifer Lopez and Doug Wick. All three have big upcoming projects with Sony this summer.

"We feel it's important to go and show our support," said Blake. "We're giving them what they want, which is a look at a big summer movie."

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