NATO On The Screening Room: Any New Model Affecting Exhibs Should Be Handled By Members, “Not By A Third Party”

By Anita Busch, Anthony D'Alessandro

After days of silence, the National Association of Theater Owners leadership came out today to address what has caused complete havoc and consternation among their membership: The Screening Room’s business proposal to stream first-run films day-and-date into people’s living rooms for a price. If a new business model is to be done, NATO says this morning, “those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.”

Deadline has been hearing over the past several days that the only big exhib that has come to the table on this was Chinese-owned AMC which apparently signed a letter of intent with The Screening Room. However, all the other major exhibitors and many of the smaller ones are have voiced concerns and some have said outright that they wished for The Screening Room’s failure. AMC has recently announced that they plan to merge with another big exhib, Carmike, but that is running up against some shareholder resistance.

While exhibitors that Deadline has spoken with have acknowledged that they understand the need, for instance, of working with distributors and filmmakers to perhaps shorten the window for some films that have exhausted their theatrical runs and may need to go to VOD more quickly, they consider themselves partners with the studios.

They acknowledge that distributors — on certain movies — need to tighten the window so they can capitalize on their marketing spends to help them profit in the VOD market, however, The Screening Room’s proposal could impact local economies and affect the entire business. There are also real concerns over piracy and the cannibalization of the theatrical exhibition business.

The statement from NATO comes only a month before the nations theater owners will convene in Las Vegas for their annual convention, Cinema-Con. NATO represents 32,000 movie screens in 50 states, and additional cinemas in 81 countries worldwide. Its membership includes the largest cinema chains in the world and hundreds of independent theater owners.

Here is their statement:

Recently there have been various reports in the media regarding a proposed movie release model called “The Screening Room”. Within a few days of the first report, several different high profile movie directors publicly stated their support for the model, some claiming that the model is good for motion picture exhibitors. Movie theater operators, however, will individually decide what business models work for movie theater operators.

The owners and operators of movie theaters genuinely appreciate the vision and creativity brought to the big screen by motion picture directors. Nothing entertains movie fans better than a great movie exhibited in a modern movie cinema.

The exclusive theatrical release window makes new movies events. Success there establishes brand value and bolsters revenue in downstream markets.

NATO has consistently called on movie distributors and exhibitors to discuss as partners release models that can grow the business for everyone. More sophisticated window modeling may be needed for the growing success of a modern movie industry. Those models should be developed by distributors and exhibitors in company-to-company discussions, not by a third party.

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