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Patrick Goldstein and James Rainey
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Fox vs. Regal Theaters: New escalation in the 3-D glasses war

Iceage2It only took a couple of days for Regal Theaters, the nation's largest theater chain, to respond to 20th Century Fox's decision to force exhibitors to foot the bill for the 3-D glasses audiences need to watch the studio's 3-D movies, beginning with "Ice Age: Dawn of the Dinosaurs," which hits theaters July 1st.

With the cost of glasses having reached roughly $1 million per film, Fox decided that it had the leverage to pass that cost along to exhibitors, even though the 3-D boom is in its infancy, with only a small percentage of theaters having converted to 3-D digital projection.

As I wrote in an earlier post, the battle over Hollywood's latest cash cow was sure to be a doozy. And sure enough, Regal hasn't taken Fox's threat lying down. According to a post today in Entertainment Weekly, Regal is leading an exhibitor rebellion, with sources saying that Regal will play Fox's "Ice Age" sequel only on its 2-D screens. Regal's contention is that Fox's effort to dump the payments for 3-D glasses in exhibitors' laps represents a clear reversal of an agreement worked out long ago when exhibitors agreed to install the new digital equipment needed to show 3-D movies.

EW quotes one angry exhibitor who said that after he had to pay the costs for installing new screens and a RealD hardware system, along with training employees to run the product, "to come in at this point and say they aren't going to pay for the glasses, yet they want all the upside of the revenue, is ridiculous." I once again have lobbed in phone calls to Fox co-chairman Jim Gianopulos, who was at ShoWest this week, telling exhibitors that 3-D was "the most exciting new technology since they put sprocket holes in celluloid." If he calls back today, I'll let him tell his side of the story.

So what happens next? Since Regal is the nation's largest theater chain, if it relegated "Ice Age 3" exclusively to 2-D screens, it would put a big crimp in the movie's 3-D revenues, which played a dominant role in Dreamworks' "Monsters vs. Aliens" box-office success last weekend. On the other hand, Fox could return fire by telling Regal that it will give its 3-D prints to AMC and Cinemark, the country's second- and third-largest theater chains, giving Regal's rivals a competitive advantage.

Fox distribution chief Bruce Snyder told EW that no exhibitor had said they didn't want to play "Ice Age" in 3-D. "We're just working out the issues." To me, it sounds like the settlement negotiations have already begun. As always in Hollywood, everyone's interests are intertwined. Regal, for example, is owned by real estate and media baron Phil Anschutz, whose biggest movie franchise, the "Chronicles of Narnia" series, is now being distributed by -- you guessed it -- 20th Century Fox. Since it's hard to imagine Anschutz boycotting his own film, it's likely something will be worked out soon.

"It's a chess game about who's going to reap the most profits from 3-D," says one veteran studio distribution exec. "Regal has let Fox know it's willing to raise the ante. Now Fox may threaten to give a big potential summer hit film to Regal's rivals. Someone who has a real vested interest in the long-term financial success of 3D will have to come in and negotiate a solution, where Fox can save some face and Regal can play the movie."

Hmmm ... this is a job for Hollywood's greatest 3-D pitchman ... Jeffrey Katzenberg.

PREVIOUSLY: WHO'S CASHING IN THE MOST FROM HOLLYWOOD's 3D MANIA

 
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I hate the fact that eventhough I already have two pairs of 3D glasses I still have to pay the extra money to purchase new glasses eventhough they are the exact same pair of glasses. The glasses should be an option and not a requisite.


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