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Senior Shackster
792 Posts

There used to be a theater alliance known as NATO (not the UN organization but the National
Association of Theater Owners). They had some clout in the post 1948 era when the Supreme
Court degreed that distributors had to sell off their theater chains because it represented a monopoly.
It did although one has to admit it was a monopoly of high quality. The studios that owned theaters
really put on a great show in those days although it made independent filmmaking difficult to impossible
which was the trade offs (absolutely nothing in business or industry is clear cut/everything involves
trade offs).
Anyway, through 1966 NATO did have some influence over distribution policies since MPAA president,
Eric Johnson, was a fair minded executive willing to listen to and mediated the industry factions. However, he died in 66' and was replaced by the late Jack Valenti who was originally part of the discredited Lyndon Johnson administration. Valenti made no bones about it from day one. He was not going to represent or mediate all industry factions. He would be a lobbyist for distributors...period! Indie filmmakers, directors with controversial subjects (i.e. Pekinpah and De Palma had run ins with him), theater owners and others would be on their own since Valenti took the studio/distributor's side in virtually every dispute.
However, as long there existed 20,000 or so independent screens (prior to the late seventies),
NATO had enough support among it's members to ban 'blind bidding' on a state by state basis since
Valenti refused to ban it via distributors (blind bidding forced theaters to book movies at high rental
rates and percentages without actually screening the movie) and 'block booking' (forcing exhibitors to show a studio's entire output for the year rather than picking and choosing the titles). This gave indies
(like me) some leverage to book independent cinemas and drive ins with their product.
However, the demise of the Production Code in 1968 and replacement with the classification system
(ratings) changed the demographics of the moviegoing public from mainstream to targeted viewer which
had long term ramifications for theater owners. The large screen indoor theaters and drive ins (along
with the smaller art cinemas, repertory theaters and grind houses) began folding like dominoes in the
late seventies and eighties. They were replaced by multi and megaplexes, often controlled/owned
outright by distributors (the 1948 consent degree effectively defunct) and block booked by the major distributors cutting out indie productions, foreign and art films in general. Rather than being 20,000 or so independent cinemas organized cinemas under NATO, they became about seven or eight theater chains that controlled the distribution of studio product and were in ruthless competition to
put each other out of business. Naturally, the studio/distributors saw thier opportunity to change the
distribution terms to the 90/10 split. Prior to these years distribution terms were 60/40
with accomodations made for co-op advertising (i.e. if the theater helped pay for the ads, their percentage went up) Multi and megaplexes had no choice but to submit to these tough terms or not get any studio product. Of course, they could've turned to indie, foreign or art house product with better booking deals instead but that would further incur the wrath of studios who might now allow them to exhibit any further product.
There is the option for indie filmmakers to market directly to DVD, bypassing the studios and exhibitors although they won't get the same level of exposure. Still, there's money to be made there on direct video sales. Some like Steven Segal market directly to DVD. I'm still hanging in there and making movies but most indies I know have gotten out of the business. Very Darwinian now.

162 Posts
Thanks for all of your great insight. I always knew that theaters relied on concessions and what not to make their money, but why has it just been in the last 7 or 8 years that the commercials have begun to show up? And mostly, how do these distributors harness this power? At some point you'd think the studios and filmmakers and theater chains would say enough is enough and find a way to cut this middleman.

In the uk, im sure we have had adverts, including tv style, for a long time. The generic one is the add for the local Indian just round the corner. I used to have a dvd with 10 or so classic cinema adverts, including a 60/70s ad for clarks shoes, with twiggy no less.


7 Posts
I don't have a home theatre and have never had one and it's one of the reasons I like to go to movie theaters, but, unfortunately, I do it quite rare. To my mind, some movies are made to be watched on a big screen, with a good surround sound. What I also like about visiting cinemas is the fact, that it is a great way to meet people who share a common interest. I was really excited when the Bohemian Rhapsody movie came out. I watched it in the cinema and was very pleased with the fact, that the people, who gathered there all liked or were interested in this music band (Queen) and it gives you a feeling that you're not alone.
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