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“The Challenges Are The Same For Cinema Owners Everywhere"

The exhibition space in India is rapidly evolving but there are still some key issues that divide cinema owners. In an exclusive interview, John Fithian, President of the National Association Of Theatre Owners (NATO), shares his views with Sagorika Dasgupta, on the pitfalls and pluses in this segment in India

Can you tell us a little about NATO?

It is the greatest association in the world for the operators of motion picture cinemas. We have members across all 50 US states and represent about 30,000 screens there. And we also have members across 53 countries, which also includes members here in India. This is my first visit to India to meet with exhibitors and it’s been a very educational visit.

 

Why do you say that?

The issues are more common now than what they used to be. If you go back about 10 to 15 years, most cinema owners cared more about local policies, issues like taxes and regulations on your theatre buildings. We have encountered a lot of that in meetings with Indian cinema owners. But in recent years, the biggest challenges are the same for cinema owners everywhere in the world.

 

And what are they?

They are taking advantage of the transition from film technologies to digital technologies and that comes with a lot of challenges. Another common problem is movie theft or piracy. And how stolen movies on the Internet are responsible for damaging ticket sales. And also the way movies are released. We call it the theatrical release window, that is, the time during which a movie is available in cinema halls before it reaches people’s homes via cable or DVD or video on demand. That period exclusively is very crucial to the cinema business. All these issues are practically the same worldwide. Censorship issues differ from country to country but everyone cares about it. We have been working on all these issues in the US, Canada and all the countries where we operate.

India represents the biggest market in the world in terms of tickets sold, so we thought it would make sense to come here and learn about India, not just because it is a huge cinema market but also because it is the only place other than Hollywood where a lot of films are made.

 

What have you learnt in India so far?

I think the quickest take-away are those common issues that I just described and the fact that as different as we are as people, the love for movies, knowledge and history of cinema in the US and India are common. That’s why we have common challenges too. But there are some unique challenges in India such as the division between multiplex and single-screen operators here. In America, both these parties work very closely and they are all part of our association. We operate huge companies like Regal Cinemas in the US which have almost 7,000 movie screens, and we also have little mom-and-pop operations that just have one screen. But in India, it is very divided with the Multiplex Association and the Single Screen Association in every territory. We have worked with both groups to find a way for them to work together to solve these issues.

The digital cinema issue is another big difference between our country and India because we show mainly Hollywood movies in US. So our exhibitors usually put in equipment that is certified by the Hollywood studios, often called the DCI compliant equipment, which is the standard set-up. But here in India, there are 5,000-6,000 screens that have digital equipment that are not up to those standards. They are less expensive and the Hollywood studios won’t screen their films here.

Of the big multiplex operators here, who operate at about 1,500 screens here, have not digitised 600-700 screens. So there is tension here not just between multiplexes and single-screens but also technology and movies. So we have different kinds of challenges: size of movies and the technologies that screen them These are the points of division in India. That’s a tough challenge to overcome.

 

What is the ratio of multiplexes-to-single-screens in the US?

The exact opposite of India! We have 39,752 screens in the US. And of these, less than 5,000 have one or two screens. So there are around 3,000 screens that are three or two-screen properties and 37,000 multiplexes. It’s a more than 10:1 multiplex-to-single screen ratio.

In India, there are around 11,500 screens and 1,500 of these are multiplexes. So it’s a 10:1 single-screen to multiplex ratio in India. One of the biggest challenges here is how do we change that around as single-screens still play a big role. Do they shrink in number and what’s going to happen?

In India, there is a vast diversity in the audience across geographies. Is the US a more uniform market?

The US is a much more uniform market. India is more like Europe. We have got not just different cultures but movies in different languages. I know that in India, Hindi Tamil and Telugu films are really big but there are other films and languages in which movies are made and they are all growing. India to me is a lot like Europe.

 

When you say NATO fights for a lot of issues, what exactly do you mean?

The location of our offices kind of explains what we do. We have our headquarters in Washington DC, which is where our national governments are headquartered, and we have our second office in Hollywood in California and that’s where the work is. In Washington, we work with the federal government on all the issues that affect the cinema business, and in Hollywood we work with movie studios, the creative communities, the Director’s Guild and the producers. So it is half-and-half in terms of the priorities of the issues.

 

What is your message to Indian exhibitors who are not as united as they are in the US?

We just finished several intense meetings on that question. All I can say is that Americans should not be making recommendations to Indians on anything relating to the movie business because India has such a vibrant and big movie culture and for much longer than we have had. So it would be very presumptuous for us to tell India what to do.

We came here mainly to learn, and we have learnt a tremendous amount. But it does surprise me that the industry is not united in India. We have members in a lot of countries and we have seen this in a lot of other places. They do not work together on issues that are different such as multiplexes and single-screens. But on issues like the window of release of films, digital cinemas, piracy, censorship… these are common to all operators everywhere. It is more effective to work together and have at least one body represent all the bodies in the cinema industry.

Over the years, the industry has been split between the multiplex and the single-screens, and India is now in that process. But they have always worked together when they have been united as opposed to when they were split. If there is one observation, it is this, that it would be more effective if it would work together.

 

India is probably a couple of decades behind the US. What are the pitfalls that we should avoid?

The transition from single-screen to multiplex took place almost 15 years ago. In Europe, this happened ten years ago in some places. It is happening in India as well. There will always be a role for some single screens. But it will be smaller than what it is now. The challenge for single-screens will be how to continue to be profitable. So the issue of digital cinemas and DCI-complaint cinemas is very important. These issues need to be resolved.

As for release windows, we are delighted to see that the industry is quite there. Content owners have set up proper windows with exhibitors with their content. The growth of multiplex associations on issues pertaining to taxation has also been quite pertinent. There has been a lot of growth and modernisation in the Indian industry, which is encouraging and I hope it continues.

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