AUGUSTA, Maine – If cookie distributors worked the way film distribution works, you would be able to buy that new cookie at only one store, and not necessarily the store that has the best price. That is the issue behind legislation that would have the state set parameters on movie distribution in the state.
“We are a poor state and movies are getting way too expensive, at least in the first-run theaters, “ said Sen. Nichi Farnham, R-Bangor, sponsor of a measure. She said many families, including hers, depend on the second-run theaters to watch movies on a big screen, but she said those theaters are at a big competitive disadvantage.
“When you have three boys like I do and you want to watch a movie, dollar day at the smaller theater really works,” she said.
Farnham said Don Simpson, owner of Movie Magic Cinema, a second-run theater in Bangor, convinced her that the state needs to get involved to make sure small theaters survive and provide inexpensive options for Mainers to watch a movie on a big screen.
“The way the movies are distributed, we will all go out of business,” Simpson said. “The deals allow the big theaters to have exclusive runs with no guarantee the small theater will ever get a movie, particularly a blockbuster, say, like ‘Avatar.’”
He said the typical movie will spend weeks at a first-run theater before his theater, or the dozens of other second-run theaters across the state get a chance to run the movie. He said the measure would limit how long a first-run theater could have the exclusive rights to show a movie to 14 weeks.
“This affects all of the little guys all across the state,” Simpson said. Greg Melick, a film booker who used to own a theater in Brunswick, said the way movies are distributed reduces competition and everyone has seen the increasing prices of tickets.
“Current distribution practices encourage high movie ticket prices because they eliminate local competition for film,” he said. “This is good for distributors because they earn a percentage of all the tickets sold, but it’s very bad for you if you want to take your family to the movies.”
Melick has sent a long letter to lawmakers outlining the history of movie distribution and how the large movie studios, through control of the production of the movies and their distribution control the ability of theaters to compete.
“The main benefit of the bill stems from reducing the time allowed between exclusive first-run licenses and second-run availability,” he wrote. “ No longer will the anti-competitive and destructive practice of allowing first-run theaters to hold films away from their second-run competitors for as long as they wish be allowed.”
Simpson said complicating the issue is the change in the medium that movies are being distributed. For more than a century, 35 mm film has been the method. That is being switched to digital distribution and projection and that is expensive.
“That’s about $70,000 a screen and if we can’t make enough now, how are we going to pay for the new equipment to stay in business?” he said. “That’s going to be a lot of local jobs gone.”
But the Motion Picture Association of America, the group that represents the studios, argues that federal law pre-empts the ability of the state to regulate the terms of move distribution deals.
“The bottom line to this is that federal law prohibits this kind of regulation of business practices and contractual relationships between theater owners and distributors,” said Vans Stevenson, senior vice president of State Government Relations for the MPAA. “If you are the copyright owner, which our companies are of these movies, we can license to whomever we want and the states are pre-empted.”
The six big studios, Walt Disney Studios Motion Pictures; Paramount Pictures Corp.; Sony Pictures Entertainment Inc.; Twentieth Century Fox Film Corp.; Universal City Studios LLC; and Warner Bros. Entertainment Inc. make up the MPAA.
“Our members do take into account the rural nature of a state like Maine,” Stevenson said.
But Simpson and Melick disagree. They believe the state can regulate the agreements. The measure has not been scheduled for a public hearing.