“This year has been a terrific year for exhibitors and we’re very happy to be up year over year both in box office and admissions.”

Those are the encouraging words of Patrick Corcoran, director of media and research at the National Association of Theatre Owners (NATO). Fresh on the heels of the annual membership meeting of the world’s largest exhibition trade organization (www.natoonline.org), he shares with the readers of Film Journal International some of the key items that were discussed there.

The main organizational point for the meeting in Newport Beach, Calif. was the election of officers, the first to be chosen by the new 18-member executive board of directors under a recently enacted board restructuring.

What prompted the scaling down in the NATO leadership? The basic issue was that “NATO’s governing structure was somewhat archaic and over-large,” Corcoran admits. “Our board of directors had 97 members. Because that’s so unwieldy and a very difficult forum to get quick decisions, they had created an executive and finance committee.” Along with the financial and fiduciary decisions required, “that group was de facto acting as the board of directors in such matters. The actual board, however, was still legally responsible for all those decisions.”

In order to make the structure “more modern and more representative of what our membership is like,” he explains, “and to give them more direct responsibility over governing issues, the executive board was established. What was the board of directors before, now takes on an advisory position with a broader overview of the industry and gives direction to where we would want to go as an association and as an industry.”

There are now eight “automatic seats for the eight largest circuits in America” while the candidates for the rest are being elected. Four each go to circuits with 75 screens or more (not included in the top eight) and those with 75 or less, as well as one seat elected from state and regional exhibitor associations (they are all automatic members of the advisory board, however). Says Corcoran, “The effect was to broaden the representation given to regional and independent members from what it had been in the previous structure.” These 17 members who form the executive board subsequently select the officers of the National Association of Theatre Owners.

Elected to two-year terms were Tony Kerasotes (chairman and CEO, Kerasotes ShowPlace Theatres) as chairman; Aubrey Stone (president, Georgia Theatre Company, as vice-chairman; Amy Miles (CEO of Regal Entertainment Group) as treasurer; and re-elected as secretary, Mark O’Meara (president, University Mall Theatres).


Also during the mid-September meeting, Corcoran sketches “in broad terms” that “the same kind of concerns [were discussed] that we’ve had over the past several years. Those include the ongoing digital rollout, the effect of 3D and financing for both. Movie theft and home-entertainment windows are always a priority for our members along with the movie release calendar, how product is distributed throughout the year.”

Now that JPMorgan has apparently sent out detailed financial briefing books for d-cinema deployment in theatres associated with Digital Cinema Implementation Partners (DCIP), where do the NATO-supported activities of the CBG (Cinema Buying Group) stand? “It remains to be seen what the investor reactions will be to the DCIP options,” Corcoran cautions. “It has always been sort of considered that the rollout of DCIP was the necessary precursor to the CBG going en masse. So everybody has their fingers crossed for the signal from the financial markets that things will be opening up in terms of credit and financing for the digital transition. As far as we are concerned, there are ongoing negotiations between CBG and distributors, trying to nail down the best VPF [virtual print fee] deals and financing arrangements.”

Arrangements for alternative content and pre-show advertainment had originally been a financial motivator for exhibitors to go digital. Just as that incentive was surpassed by non-DLP Cinema projection options, could the emerging new 35mm 3D technologies take away that business model for d-cinema too? “There are very mixed reactions from both the studio and exhibition side,” Corcoran reports. “I have heard both positive and negative reactions. One argument for 3D on film is that for those to whom financing of digital cinema is not immediately available, it is a low-cost alternative. The counter argument to that is, the industry has spent quite a lot of time and energy creating the perception that digital 3D is something different and superior. There is worry among exhibitors, and I believe among distributors as well, that it is going to create some confusion in the marketplace about and possibly even some harm to the 3D brand at this point. A lot of exhibitors are taking a hard look at it and—just as distributors—will make their decisions based on what they think would serve them best.”



Whether using digital or celluloid, movie theatres were up 12% during the first half of the year. “And the first quarter was up 9.4% over the prior year on its own.” Corcoran calls those numbers “real proof of what the non-blockbuster movie seasons can do. It is crucially important to have viable commercial films throughout the year. What we are encouraging distributors to do is to look at every weekend of the year and make it a moviegoing weekend. I think it is a mistake for customers to get the impression that there are weekends where you really don’t want to go to the movie theatre. There should be a range of films—blockbusters, mid-range, comedies, dramas, science fiction, horror, prestige and family films—mixed-up within the weekends and throughout the year.” After all, “a blockbuster can happen any time. It requires some imagination and some courage on the part of the distributors. Rather than going head-to-head all the time over the summer and beating each other up…there are going to be places throughout the year that, carefully targeted and marketed, will pay off handsomely for both exhibitors and distributors. There is an audience for every kind of movie.”

On a similarly upbeat note, Corcoran doesn’t believe that “anything in particular has gone wrong” this year. “There has been some smart scheduling and the early winter has just been spectacular in terms of films that just outperformed their expectations… One of the things we do face—and it is simply a function of the speed in which 3D screens become available—is that some 3D films have suffered and will continue to suffer because they are scheduled too close together. They may still have some life to them, but they have to get off the screens because of the next 3D title.”

Beyond the product, the theatres themselves have done the right thing too. “Moviegoing remains the least expensive form of out-of-home entertainment and we’ve maintained that position for four decades now,” Corcoran states. “When the economic downturn came around, our value proposition became very clear to moviegoers. Whereas almost every other segment of the entertainment industry is down, movie theatres are up. Part of that is that, adjusted for inflation, the average movie ticket is less expensive this year than it was in 1969 [$7.45 versus $8.33]. People get that.”

Now that the attention of moviegoers has been re-engaged, as Corcoran puts it, exhibitors are responding. “We really have to deliver on the quality of the presentation. And in terms of offering our customers lots of choices when they go, with matinees, children’s discounts and so on. Some of our members have reached out to their communities with free movie nights midweek or special concession deals to really make it easier for people to enjoy that outing to the movie theatre with their families.”

Since “a terrific way to see the latest films in a way that can’t be seen anywhere else” is “the primary experience that we offer,” Corcoran certainly wants all aspects of the industry to remain vibrant. “We also need a strong performance of home entertainment and of all the ancillary markets. We feed upon each other, both financially and in terms of interest. If people see more movies in the theatre, they’re more interested in buying or renting later. And people who are watching something at home are reminded about what they like about going to a movie theatre… We need a valuable flow of films coming into the theatre, and we need the rest of the business to be healthy as well.”

How long will the recession resilience of the theatrical experience go on? “It’s hard to say,” Corcoran responds. “In good times and in bad, it’s always been about what you have to show on your screens.”