Good afternoon.
I'm Neil Campbell, president of Landmark Cinemas, a wholly owned Canadian company based in Calgary. We own and operate 46 theatres with 312 screens, employing approximately 1,600 Canadians throughout Western Canada, Ontario, and the Yukon Territory. Landmark is the second-largest motion picture theatre exhibition company in Canada, and the tenth largest in North America.
As Ms. Bronfman noted, our business is a mature business that is challenged to continually engage customers to choose our theatres as their form of entertainment and their preferred method for watching movies.
Competitive pressures increase daily, with the hard-hitting impact of low-cost retail price DVDs, increasing video rentals, the prevalence of home theatre systems, pay-per-view, and satellite, in addition to a prolific number of new cable channels and out-of-home entertainment options, such as sporting events, concerts, and clubs, as well as the unfortunate continuation of international film theft known as piracy.
In order to protect the theatre business, we must engage with the customer by providing content they want to see, and by protecting the theatrical run for that content such that the customers continue to choose to see movies in theatres.
Over the past few years, this protection of the theatrical window has become increasingly more important. We have learned over the past decade of platform expansion that if a film has a healthy life in our theatres, it will have a healthy life in its electronic sell-through windows and later platforms.
If the film does not find its audience in the cinema, it will be difficult for that film to go on to succeed on other platforms. Recent indications are that most of the distribution world agrees with this premise, and most of the distribution world is committed to maintaining a healthy theatrical window.
In fact, where distributors find greater theatrical success than originally anticipated, they are more than willing to push the DVD release date down. For example, the distributors of both American Sniper and Kingsman pushed out their DVD release dates when they saw the theatrical success of those titles. Similarly, in Canada the movie It Follows had a delayed DVD release date because the title did well theatrically. They opened two prints in New York and two prints in L.A. and had a box office average of 164,000 on the first weekend. They instantly took the DVD date and moved it down to a level where we would all agree to play the picture, and they re-released it.
The Movie City News publication recently cited the declining theatrical window as being “Mutual Assured Destruction, which is, indeed, MAD”. Despite this, declining home video revenues continue to be the biggest worry for distribution, largely as a result of international film theft—again, piracy. The need for distribution to support their declining DVD sales and the need for exhibition to ensure success at the theatrical box office will continue to remain as a conflict. However, both groups are working together to find solutions.
Anne.