THE FEAR FACTOR

Several clients, who attended the annual Drive-In Theatre Convention (which is held every February in Florida), called me to inquire about my take on the Cinema Buying Group (CBG) informing the Convention attendees that by the end of 2012 or thereabout, movies will only be available in digital format, and as such if drive-ins do not convert to D-Cinema they will effectively be out of business.

I did not attend the Drive-In Convention but am well aware of the CBG's scare tactics. First, the studios cannot pull the plug on film distribution. I'm not a corporate attorney but I believe that allowing only some folks access to your product (in this case movies) to the benefit of others is termed "restraint of trade" and is illegal.

However, for the sake of argument, let's say the studios do go only digital in 18 months. Well, the question then becomes why go with D-Cinema format. Why not let cinemas purchase inexpensive HD video projectors (priced in the $8-10,000 range) and distribute Blu-Ray DVDs for movie exhibition? OK, that's easy to figure. The studios and CBG want exhibitors to purchase a complicated, expensive, and controllable projection system (D-Cinema) because they want to maintain reign over movie distribution while reaping the benefits of a cheaper technology. They know that releasing movies to cinemas on DVDs - and there is no reason they can't be - they would lose distribution control. It's the old, have your cake and eat it too.

Exhibitors, especially independents, need to stand up. Forget about NATO fairly representing your interests, NATO is in the pocket of the studios. Let's face it, if it were just about cost savings the DVD scenario would prevail as this would save the studios and the industry even more.

The CBG.s fear tactics , revealed at the Drive-In Convention, are a throwback in today's market and price driven business environment. Why the CBG even exists is a bit of a mystery. The answer is probably a legal one as they function solely as a buffer between the exhibs and the distribs. Why don't the studios deal directly with exhibs. on the virtual print fee fiasco? Why have a middleman?

The fear factor is in full swing, don't get caught up in the rhetoric and hyperbole. The CGBs days are numbered and they are desperate. They are reminiscent of a county fair huckster or a late night infomercial announcer - "Don't be left behind. Step right up and get your D-Cinema system. It's easy, fun, free, and guarantees your cinema's survival.

It's the ShamWow spiel of the cinema industry - don't be conned. If it sound too good to be true, well, remember Bernie Madoff.