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Theater Owners Defend Windows

25 Aug, 2005 By: Holly J. Wagner

Movie theater owners are railing against the idea that films should be released day-and-date theatrically and on DVD, with the head of the National Association of Theater Owners (NATO) saying “there would be no viable movie theater industry in that new world — at least not a theater industry devoted to the entertainment products of Hollywood.”

He also pushed the promotional kickoff aspect of the theatrical release.

“DVDs that sell well benefit enormously from the advertising platform and national conversation generated by theatrical release,” NATO president John Fithian said. “Does it really make good business sense to plunder that $25 billion-plus worldwide theatrical window without a very solid assurance that even more DVD sales will make up for the lost theatrical revenue?”

“And if you answer that question based on number-crunching in your home entertainment division, are you really willing to bet the farm on the proposition that consumers will rush to watch even more movies at home after you've whacked the advertising platform of theatrical release? And have your number-crunchers accounted for the possibility that consumers have basically bought their DVD libraries and will hereafter be increasingly conservative about their purchases?”

Fithian made his remarks in response to comments from Walt Disney Co. president, COO and CEO-elect Robert Iger to industry analysts during a financial call: “Windows in general need to change. I don't think it's out of the question that DVDs could be released in the same window as the theatrical release. All the old rules should be called into question, because the rules of consumption have changed so dramatically.”

In a year of sagging box office receipts and slowing DVD sales, studios and theater owners are pointing fingers at each other. Studios fault the theatrical experience and exhibitors fault the quality of movies.

“It's a product-driven industry,” Fithian said. “When the movies are really good, the industry does really well. And vice versa.”

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