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The special needs of the specialty pic biz

WHAT’S SO SPECIAL about specialized?

In the past five years, Disney acquired Miramax, Universal made October its art affiliate, Paramount continues to toy with setting up a niche division, Live and Trimark are getting serious scrutiny as growth operations and New Line resides under the Time Warner umbrella.

After a two-year building hiatus, the 140-screen Landmark chain — the only national specialized exhibitor — has 30 new screens in its immediate future. Reading Cinemas has started franchising its Angelika imprimatur and Sundance, with General Cinemas, is about to announce an aggressive building/refurbishing program that will spawn about 70 screens in 12 to 15 cities by January 1999.

One might expect that the flurry of activity was keyed to an extraordinary upswing in moviegoing tastes.

But despite the crossover success of such films as “Fargo” and “Emma” and the sector’s 1997 Oscar domination thanks to “Shine,” “Secrets & Lies” and other pics, the core industry remains at 5% to 6% of the domestic marketplace. Is there some secret in the offing that the industry and public hasn’t been privy to?

“What’s amazing really is that these niche pictures have held their own while the rest of the country has been megaplexed,” observed indie booker Jeff Jacobs. “On the exhibition side, it’s simply time for a change in order to compete with the new complexes. Most areas of the country are either not served or poorly served by existing theaters.”

While major chains have engaged in a massive building boom in the past three years, indie operators have been holding the line with sites that are generally 10 to 20 years old. The top vintage venues have been refurbished or multied, but distribs concede that the general state of outlets in such key cities as Chicago and Washington is “deplorable.” The most recent new build in Los Angeles was Laemmle’s Sunset 5 and in Manhattan, Sony’s Lincoln Plaza, which plays a combination of mainstream and upscale product.

“The building boom is certainly a factor, often by default,” Cineplex Odeon Films president Brian Glisserman noted. “Because major circuits are erecting new sites where they often have existing theaters, the question arises what to do with the smaller venues. Some will simply go fallow as leases expire, but in other instances, the option is to switch to an arthouse policy or to go discount.”

The outward signs of giganto grossing films and looming moviegoing behemoths provide the impression of a business that’s expanding at a far greater rate than balance sheets would support. Exhibition remains a slow, steady growth industry, buffeted by the slightest change in the marketplace. Multiply that fragility by 10 and you have the state of specialized movie theaters. It’s not happenstance that there’s only one national circuit dedicated to niche fare and that there are dozens of instances of startups that failed and experiments with the policy that have been abandoned after a month or two in the arena.

However, with the right game plan, it makes sense … and dollars.

THAT SIREN SONG reached ear-shattering levels in February with the announcement of Oscar nominees. For the first time in Academy Award history, the majority of best-picture nominees were produced outside the traditional studio system. Even the sole exception — “The People vs. Larry Flynt” — was minority financed through offshore pre-sales.

More important than the Academy kudos was the fact that the record number of pictures crossed over into the mainstream, eventually grossing between $20 million and $80 million.

“Last year was a bit of a fluke and you cannot be in this (specialized) business if you depend on the aberrations,” said Landmark senior VP Bert Manzari. “We’ve been at it for more than 25 years and know that it’s pictures like ‘Kolya,’ ‘Kama Sutra’ and ‘The Full Monty’ that are the life blood of your operation. If you cannot make those pictures work, you can just pack it in.”

Reading, which operates City Cinemas in addition to the Angelika, also is casting its net. A Houston Angelika will be its first test into the spec waters outside the Big Apple. While no deals have been made, the circuit appears to be close to announcing several other venues, most likely in Atlanta and Philadelphia.

There currently are about 400 screens domestically dedicated to arthouse product and that includes everything from modern multiplexes to decaying calendar operations. Whereas a major player can date several hundred theaters on the opening break of “Men in Black” or “The Lost World: Jurassic Park,” Landmark theoretically maxes out at 18 prints currently.

FOR A PICTURE WITH CROSSOVER appeal, there are tremendous limits in the specialized confines. “Ulee’s Gold,” currently in 334 theaters, needs bookings from the multis and megas. United Artists theaters currently has it in 28 situations.

So, the prospect of 100 new specialized sites has niche distribs understandably excited, and wary.

“The big question I have is, who’s going to do the next stage of development?” asked an indie distributor. “A lot of people have come and gone who are responsible for developing a taste for non-Hollywood pictures in places like Seattle and Minneapolis. It’s a very slow, labor-intense process. But there’s not going to be a real expansion until you start building those audiences in Baltimore, Indianapolis and Omaha. The business isn’t so vibrant that new operators can afford to do the groundwork necessary to build a national audience base.”

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