The Ongoing Threat of Movie Theft

http://digitalcinemareport.com/thebigpicture_122.html

By Nick Dager
March 1, 2008 | Issue #122

The ShoWest convention held each March in Las Vegas is the biggest gathering each year of the National Association of Theatre Owners. This year promises to be the best-attended ShoWest ever and I asked NATO president John Fithian what to expect. He said one of the main topics would be movie theft, which Fithian says, “Remains a serious challenge to the industry.”

Digital Cinema Report: At ShoWest a year ago you said you considered piracy and shrinking theatrical release windows to be the two challenges facing the exhibition industry. What, if anything, has been done to improve things in those two areas?

John Fithian: Over the past year the theatrical release window has stabilized, and even grown a bit. We will discuss the numbers at ShoWest. We are pleased that our partners in distribution have recognized and respected the need for a reasonable theatrical release window.

On movie theft (“piracy”) NATO and the MPAA have expanded our programs effectively in a number of areas including education, enforcement, and legislation. We will discuss these efforts at some length at ShoWest. Though we have made progress, the problem of movie theft remains a serious challenge to the industry.

DCR: How has Hollywood responded to your call for the year-round release of more potential box office hits?

JF: So-so. In 2007 we had many significant commercial pictures during the summer. But we left April off the table, and the fall was weak. Though the studios produced many commercially viable movies that excited audiences, the release schedule was not optimal. We had too many popcorn titles in the summer, released very little in April, and crammed too many art/serious/war movies into the fall. We need diverse genre movies that appeal to diverse demographics spread throughout the 12 months. Looking at 2008 and 2009, I notice some improvements.

DCR: What else do you see as big challenges confronting exhibition?

JF: The big three remain (1) movie theft, (2) theatrical release window, and (3) a proper conversion to digital cinema. Nothing else comes close to these three issues.

DCR: The digital cinema rollout is well underway. Have you seen improvement in the number of digital releases coming out of Hollywood?

JF: I don’t think we have any problem with the number of digital releases. The remaining big issue is simply translating integration business models into actual deals.

DCR: Many of the small independent exhibitors I’ve talked to say that, while the cost of digital cinema is still a critical issue for them, they won’t even consider it until and unless the industry gets a better handle on piracy. I assume you hear the same things. How does NATO respond and what can NATO do to help them?

JF: I have not heard many independent exhibitors link digital cinema and movie theft the way you have. Digital cinema actually provides some improvements in the war on movie theft. And even though movie theft costs the American theatrical business roughly $600 million per year in lost ticket sales, we still have a $9 billion plus ticket sale business. The issue for independent exhibitors vis-à-vis digital cinema is the business model, period. That’s why NATO helped form a buying group for smaller exhibitors