Movietickets.com joins lawsuit against exhibitor AMC

Global online ticketing service MovieTickets.com has joined a lawsuit filed against one of its founding shareholders, AMC Entertainment Inc., the nation's second-largest theater chain.

MovieTickets.com, a Boca Raton, Fla.-based joint venture launched 12 years that serves 247 exhibitors, said Wednesday that it was adding its name to a suit recently filed in Florida by exhibitor National Amusements and Hollywood Media Corp. alleging that AMC breached its contract by not selling tickets exclusively through MovieTickets.com.

On the same day Movietickets.com announced the litigation, AMC touted an agreement to expand its partnership by 3,000 screens with rival online ticketing service Fandango. The deal will expand Fandango's network in Los Angeles County by an additional 25 theaters representing 400 screens.

National Amusements and Hollywood Media, a Florida-based firm with interests in online ticketing and other services, were among the founders of MovieTickets.com, which services 19,500 theater screens in the U.S. and abroad and nearly 20 million registered users.

"Despite exhaustive efforts by MovieTickets.com to resolve the dispute among the founding shareholders, AMC disabled its ticketing inventory from MovieTickets.com,'' the company said in a statement. "This is the first time MovieTickets has ever sued anyone. The company is fully prepared to take all necessary action to protect its rights, the value and integrity of the MovieTickets.com service."

A spokesman for AMC, which is based in Kansas, City, Mo., declined to comment.

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Photo: Moviegoers crowd at AMC theaters in Burbank. Credit: Ringo H.W. Chiu / For The Times

-Richard Verrier

 

Wall Street gives RealD some relief

The picture brightened somewhat for RealD Inc., the Beverly Hills based 3-D equipment supplier, which saw an 11% jump in its share price after it reported better-than-expected financial results.

RealD on Wednesday recorded a $2.8-million profit, or 0.05 cents per share, in its third fiscal quarter ended Dec. 31 -- a considerable improvement over the $16.6-million loss from a year ago.  Revenue in the quarter was $49 million, down 15% from the same time a year ago, reflecting slower ticket sales from such 3-D movies as "Hugo," "Happy Feet Two," and "Arthur Christmas."

Still, the company pulled in more revenue than the $42 million analysts were expecting, triggering a modest rally in the company's share price, which has plummeted in the last year amid disappointing 3-D ticket sales. RealD's stock closed Wednesday at $9.74, up 11% for the day, but still well below the company's 52-week high of $35.60.

"Prudent management of operating expenses enabled RealD to maintain profitability during the third fiscal quarter despite a relatively muted 3-D film slate," said Michael V. Lewis, chairman and chief executive of RealD.

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Photo: RealD founders Michael V. Lewis, left, and Josh Greer inside a theater at the company's Beverly Hills headquarters. Credit: Ken Hively / Los Angeles Times.

 

Movie theater stocks slide amid Wall Street rally

The stock market staged a big rally Tuesday, but it didn't include some of the nation's top theater circuits. Shares in Regal Entertainment and Carmike Cinemas took a hit in the wake of investor concerns about disappointing ticket sales at movie theaters, especially in the final months of 2011.

Shares in Regal -- the nation's largest circuit -- closed at $11.62, down 3% for the day and 16% in the last month. Shares in the fourth biggest chain, Carmike, closed at $6.59, down 4% for the day and 9% for the month.

The price drops came after Piper Jaffray analyst James Marsh lowered his earnings estimates and his ratings on the stocks of both cinema companies, citing an estimated overall 5% decline in fourth quarter box-office revenue. The fourth quarter results "are likely to represent a massive disappointment to investors, studios and exhibitors alike,'' Marsh wrote in a report Tuesday.

While some industry analysts have blamed high ticket prices and long-term factors such as competition from Netflix, Jaffray said "poor scheduling, over-reliance on sequels and underwhelming release schedules" were to blame for the anemic box office performance of such films as "Happy Feet 2," "Arthur Christmas" and "Hugo."

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Photo: A scene from the movie "Alvin and the Chipmunks: Chip-Wrecked." Credit: 20th Century Fox

Digital projectors poised to take over world's theaters by late 2015

Old-fashioned film projectors could be relics by the end of 2015. Texas Instruments Inc., which makes the DLP Cinema computer chips used in digital projectors, predicted Wednesday that the world's theater industry would be entirely digital in the next four years.

The Dallas company said that the number of its DLP digital projectors installed around the globe had reached 51,620 screens, an 84% increase over the last 12 months. Much of the growth has been in China and Europe.

Currently, more than half of the world's 125,000-plus screens and 62% of U.S. screens have been converted digitally as studios move rapidly to phase out costly film prints. The transition also has been accelerated by the popularity of 3-D blockbusters like "Avatar," which, in most cases, require digital projectors in order to be played in cinemas.

"When we started in 2005, we really thought it was going to take 10 or 15 years for digital cinema to be fully adopted, but in a matter of a few years we've gone past a tipping point," said Jack Kline, president of Christie Digital Sytems USA Inc. in Cypress, which licenses technology from Texas Instruments and has shipped and installed more than 26,000 digital cinema projectors to date. "It's astounded us at how quickly it was adopted."

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Photo: Moviegoers at the Century 8 Theater in North Hollywood.  Credit: Jay Clendenin / Los Angeles Times

Curtains to close on AMC Avco Center 4 in Westwood

Westwood is losing its second movie theater in two months.

The AMC Avco Center 4 will shut down on Sunday following a dispute between the Kansas City, Mo.-based cinema circuit and its landlord, Avco Corp., which also owns an office tower adjacent to the theater on Wilshire Boulevard. 

"AMC and the landlord were unable to reach agreeable lease renewal terms for AMC Avco Center 4,'' said AMC spokesman Ryan Noonan. "The theatre will close at the end of business on Sunday, Dec. 4."

The closing comes two months after Bigfoot Entertainment confirmed plans to shut down the landmark Majestic Crest theater on Westwood Boulevard for unspecified renovations.

Property manager Hope Hunter confirmed that the four-screen Avco was unable to sign a new lease with AMC but said the owners had plans to bring in a new theater chain sometime next year. 

"A really high-end movie theater will be taking its place,'' Hunter said. "We're going to provide Westwood with a really great movie theater and a reason to come back."

AMC, the nation's second largest theater chain, acquired the Avco cinema house in 2002 when it bought General Cinemas.

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Photo: Moviegoers at the AMC Avco cinema in Westwood walked right up to the ticket booth without waiting in line to watch the 2005 "King Kong" movie.

 

 

 

Imax signs deal with Kodak to brighten the picture for its biggest screens

Imax Corp. is bringing the digital revolution to its largest screens, thanks to a new deal with Eastman Kodak.

The big-screen entertainment and technology company, based in Mississauga, Canada, announced Sunday that has licensed from Kodak exclusive rights to more than 50 technology patents for a laser technology projection system.

The system will make high quality digital content available, for the first time, to Imax screens larger than 80 feet like the one at Universal CityWalk, and to dome theaters located at museums. Until now, about 170 giant Imax theaters have been limited to screening movies in the traditional analog-film format.

Imax said the technology, which it expects to install by late 2013, will increase the brightness and clarity of screens 80 to 100 feet wide and will allow the company to distribute content in its network with greater efficiency because digital prints are much cheaper to deliver than film reels are. About two-thirds of Imax's 575 theaters, which mostly range from 50 to 70 feet wide, have already been converted to a digital format.

Terms of the royalty agreement with Kodak were not disclosed.

Imax Chief Executive Richard Gelfond described the new Kodak technology as "truly cutting edge" and said that company may eventually roll out the technology to all of its theaters. "This 10-year agreement should give us a big advantage in terms of staying at the top end of quality,'' Gelfond said in an interview.

Although traditionally a film-based company, Imax in 2008 developed a digital system that eliminated hefty film print costs. The system can convert a traditional film into a digital format at a cost of $1.5 million to $2 million. Studios, which distribute the films, hand over about 12.5% ticket sales from an Imax release.

It's not clear how investors will respond to the Kodak deal. Imax shares have fallen 45% in the last six months, following weaker returns from 3-D films like "Mars Needs Moms" and "Pirates of the Caribbean: On Stranger Tides." The company's net income for the quarter ended June 30 fell 87% to $1.8 million from a year earlier, while its revenue of $57.2 million was up 3%.

Still, Imax has been expanding rapidly in countries such as Brazil, Spain, Russia and China. In March, the company announced a deal with Wanda Cinema Line, the largest theater operator in China, to open 75 theaters in China over the next three years.

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Photo: Executives celebrate a partnership between Imax and Wanda Cinema Line in March. Credit: Stefen Chow / Bloomberg

National Amusements boycotts 'Tower Heist' over VOD release

National Amusements Inc., the Norwood, Mass.-based theater chain, has joined other exhibitors in vowing not play Universal Pictures' "Tower Heist."

National Amusements, which operates more than 950 movie screens in the U.S., Britain and Latin America, said in a statement Wednesday that it would not screen the Ben Stiller-Eddie Murphy comedy in protest over Universal's controversial plans to make the movie available via video-on-demand three weeks after its release in theaters.

"Under Universal's current plans for the premium video-on-demand release of 'Tower Heist, National Amusements has decided not to play this film in its theatres,'' National Amusements said in a statement.

Universal recently said it would make “Tower Heist,“ which opens in theaters Nov. 4, available to about 500,000 homes in two markets, Atlanta and Portland, Ore., for $59.99 via video-on-demand.

Already, however, several exhibitors, including giant Texas-based Cinemark USA and smaller chains such as Regency Theatres of Calabasas and Sherman Oaks-based Galaxy Theatres have vowed not to play the movie. Theater owners are concerned that showing movies in the home so soon after they debut in theaters will discourage consumers from buying movie tickets.

Based in Norwood, Mass., National Amusements is a closely held company operating under the third generation of leadership by the Redstone family. National Amusements is also an equal partner in the online ticketing service, MovieTickets.com, and is the parent company of Viacom and CBS Corp.

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More theaters threaten to hold up Universal movie 'Tower Heist'

Fallout in the exhibition industry continues over Universal Pictures’ controversial move to offer its upcoming Eddie Murphy-Ben Stiller comedy on premium video-on-demand just three weeks after it opens in theaters.

On Monday, a number of independent theater chains including Sherman Oaks-based Galaxy Theatres, Regency Theatres in Calabasas and Emagine Theatres of Detroit, vowed not to play the movie “Tower Heist” in any of their locations if Universal proceeds with its plans for the early release.
Additionally, many small cinema houses representing 50 screens around the country have also refused to book the movie.

“We just feel it’s a time to draw a line in the sand,’’ said Rafe Cohen, president of Galaxy Theatres, which operates 106 screens in California, Washington, Nevada and Texas. “This is virtually a simultaneous release that we don’t think will be helpful to anyone. We’re standing on principle that it’s best to preserve the theatrical window.”

Last week, Universal said it would make “Tower Heist,“ which opens in theaters Nov. 4, available to about 500,000 homes in two markets, Atlanta and Portland, Ore., for $59.99 via video-on-demand. The announcement reignited a feud that erupted earlier this year when four studios announced a deal with satellite TV provider DirectTV to make certain movies available in the home 60 days after they opened in theaters for $29.99.

Universal executives have sought to assure theater owners that the “Tower Heist” VOD release would be a test and took pains to brief theater circuits in advance of their plans.

Nonetheless, the move unnerved at least one major exhibitor -- Cinemark USA Inc., the nation’s third largest theater chain -- which last week said it would not show the movie on any of its 3,800 screens unless Universal reconsidered its VOD plans. Theater executives fear that releasing movies in the home less than 90 days after their opening in theaters sets a bad precedent and will eventually encourage consumers to stay at home, rather than trekking to the multiplex to buy tickets.

“We certainly support Cinemark,’’ said Lyndon Golin, chief executive of Regency, which operates 150 screens. “If their position is they won’t run it, then we won’t run it either. Movies shown in the home on such a short window is a dagger to our business.”

A Universal representative declined to comment.

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Photo: Ben Stiller, left, with Eddie Murphy in a scene from "Tower Heist." Credit: David Lee / Universal Pictures.

 

Palme d'Or theater case against Cinemark moves closer to trial

The ow

The scrappy owners of the Palme d'Or theater in Palm Desert won another bout in their legal brawl with Texas cinema giant Cinemark.

Flagship, which owns the art house cinema, has been fighting Cinemark for years, alleging that the nation's third-largest cinema chain used its marketing clout to pressure Hollywood studios to not book first-run movies at the Palme.

In 2008, the state Superior Court dismissed Flagship's lawsuit, but the case was revived recently in a ruling by a California Court of Appeals. Cinemark asked the court to reconsider the ruling but its request for rehearing was denied last week.

"I believe this case has a chance to really impact our industry and help to preserve independent theaters all over the country,'' said Steve Mason, co-owner of the Palme d'Or and co-host of an ESPN Radio talk show in Los Angeles. Other owners include Bryan Cranston of AMC's "Breaking Bad" and Alise Benjamin-Mauritzson, co-producer of the Oscar-nominated film "Ray."

Cinemark has denied engaging in so-called "circuit dealing," which has been ruled illegal under a series of Supreme Court decisions, and is expected to appeal the decision.

The case, which was filed in 2006, is being closely watched by independent theater owners across the country who feel increasingly squeezed by the top four major theater chains.

Top distribution executives from several major studios are expected to testify when the lawsuit proceeds to trial in Los Angeles Superior Court.

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Photo: The Palme d'Or art house theater in Palm Desert is locked in a legal battle with Texas-based circuit Cinemark. Credit: Andreas Maurtizson / Flagship Theatres.

Theater owners blast Sony's decision to stop bankrolling 3-D glasses

The National Assn. of Theatre Owners, the country's largest trade group of exhibitors, has lashed out at Sony Pictures concerning its plans to stop footing the bill for 3-D glasses and pass the expense on to moviegoers. However, Sony may not be alone in its crusade for long, as at least one other studio is considering following suit.

Sony recently sent a letter to cinema owners informing them that as of May 1, 2012, it will no longer pay 3-D technology companies such as RealD the average cost of 50 cents per ticket for 3-D glasses used by moviegoers. Sony has two big 3-D movies coming out after May 1 next year: "Men in Black III" and "The Amazing Spider-Man."

Such costs can add up to more than $10 million for particularly popular films.

Instead, Sony wants theaters to follow a policy that's already common in other parts of the world: Having consumers pay for their own disposable 3-D glasses, either to rent for each movie or to own a pair they can take home. Consumers already pay a premium of about $3 dollars for each 3-D movie ticket.

After news of the letter surfaced in the Hollywood Reporter, exhibitors fired back Wednesday morning with a letter decrying the move. "NATO believes Sony's suggestion is insensitive to our patrons, particularly in the midst of continuing economic distress," the group said. "Sony's actions raise serious concerns for our members who believe that provision of 3D glasses to patrons is well established as part of the 3D experience."

In addition Amy Miles, chief executive of Regal Entertainment Group -- the nation's largest theater circuit -- said her chain might show fewer 3-D films if it was forced to bear the cost of glasses.

A Sony spokesman did not immediately respond to a request for comment.

Other studios may soon line up in support of Sony's move. Bruce Snyder, president of domestic distribution for 20th Century Fox, said he "applauded" the move. "I am revisiting this issue as well," he told The Times.

Fox was the first studio to attempt to stop paying for 3-D glasses, in the summer of 2009. However, no other studios supported its decision at that time, so Fox backed down.

The news comes as relations between Hollywood and exhibitors are already frayed after a spat concerning studios' tests earlier this year of "premium video-on-demand," through which consumers could pay $30 to rent a movie only 60 days after it debuted in theaters.

As with all such public disagreements, however, it remains to be seen whether studios and theater owners will ultimately tone down their rhetoric and reach a compromise.

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Photo: An audience wearing 3-D glasses at a movie theater. Credit: Lawrence K. Ho / Los Angeles Times