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NATO Chief: ‘Exclusive Theatrical Windows Make New Movies Into Events’

john fithian Nato CinemaCon 2016
Rob Latour/REX/Shutterstock

Without saying it by name, National Association of Theatre Owners head John Fithian made it clear that he is no fan of Screening Room.

The controversial start-up wants to make movies available in the home for $50 a piece, but Fithian, who is the top lobbyist for the exhibition industry, said that the theatrical window must be preserved.

“Exclusive theatrical windows make new movies into events,” Fithian told a crowd of studio executives and theater owners at CinemaCon, the exhibition industry trade show taking place this week in Las Vegas. “Success there establishes brand value and bolsters revenue in downstream markets.”

Major Hollywood releases typically remain in theaters for 90 days before launching on home entertainment platforms. Opponents of Screening Room believe that the business model would encourage people to skip the multiplexes for the comforts of home.

Fithian said that theater owners are open to experimenting with new distribution models, but they want to revise any plans in coordination with studios, not by third parties, such as Screening Room.

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“To be sure, more sophisticated window modeling may be needed for the growing success of a modern movie industry,” said Fithian. “Those models will be developed by distributors and exhibitors in company-to-company discussions. Working together on smarter windows can grow the pie for everyone.”

Screening Room has been a divisive topic at this year’s CinemaCon, where supporters such as J.J. Abrams and Frank Marshall have been in the uncomfortable position of having to face an exhibition community largely dismissive of the program. Representatives of the company are in Las Vegas doing demonstrations for interested theater owners. Boosters of Screening Room maintain that it grows revenues for the movie business by reaching out to consumers with children or demands that prevent them from regularly going to the movies.

Fithian didn’t just allude to Screening Room, he also argued that teenagers remain fans of the moviegoing experience, despite coming of age in a digital world. In 2015, per capita ticket sales for Americans aged 12 to 17 was 7.3, representing the highest growth rate of any age demographic. Despite making up 8% of the U.S. population, this age group were responsible for 16% of movie tickets purchased. Of particular interest to theater owners, teenagers are the most likely to buy 3D or premium format tickets, both of which come with surcharges.

“A strong youth audience for cinema signals future industry growth as we develop another generation of moviegoers,” said Fithian.

The embrace of movies comes as teenagers are growing more disenchanted with television, the NATO chief argued. Citing an unnamed study, Fithian said that 67% of customers between 13 and 24 cite YouTube as a must-have service, but only 36% of customers in that age group feel the same way about pay-television services.

“My 13 year-old daughter told me last week that she strongly prefers to watch video content on her iPad because it is mobile and private, and because she controls it,” said Fithian. “She rarely watches television. But she still goes to the movies, and that reflects her age demographic.”