John Bailey, chief operating officer of Famous Players, is on edge about Kansas City-based movie chain giant AMC Theatres having opened two new theaters in the Toronto area.

amc built a 24-screen megaplex in Oakville, a suburb outside of Toronto, which is just north of a Famous Players SilverCity theater. amc also opened a 20-screen theater in Scarborough, just east of Toronto, near an eight-screen Famous Players SilverCity at the Scarborough Town Centre (Cineplex Odeon also has a 13-screen theater there).

Bailey is also highly irritated about the 30-screen, 5,964-seat AMC Vaughan location just north of Toronto, opening this May directly across the highway from the 18-screen, 4,800-seat Famous Players Colossus.

‘I’ve got a real edge about this,’ Bailey says.

‘Not about competition, because I believe competition is very good and that’s what keeps people on their toes in a business, but ruinous competition is something else, and when someone is embarking on a strategy that is ill-founded. . . ‘

He says ‘more power to them’ if amc builds a theater in an area where Famous doesn’t have a new movie theater.

‘We can’t cover every location in every city in the country, but to do it on top of brand new theaters, that’s the part that I think is just wrong. At the end of the day, nobody wins.’

Not according to Jack Gardner, amc’s marketing coordinator, and Cineplex’s president and ceo Allan Karp.

‘How is it ruinous competition?’ Gardner asks. ‘Because you’re going to have to be more competitive on price? Because you’re going to have to offer more things to your consumer? It’s business. It’s competition. It’s the way it’s done all around the world. Wake up.’

Karp says that for moviegoers, this is fantastic. ‘We’re seeing wonderful new theaters [opening] across Canada and I think this will be very positive in rejuvenating the business and increasing the frequency of moviegoing across Canada.’

Advertising battle

In response to amc’s opening and its advertising campaign with the tagline ‘Changing the way Canada sees movies,’ Famous placed a full-page ad in the Toronto Star mid-December in the form of a letter to consumers from Bailey entitled ‘Thank you Canada.’

‘To say that they are changing the way Canadians view movie theaters is just ludicrous,’ Bailey says.

‘We have been the ones who have changed the experience and it’s just laughable that two theaters come into a market and somehow it’s like the Second Coming.’

‘Changing the way Canada sees movies? Yeah,’ Gardner says. ‘We’re offering a frequency award program [the MovieWatcher card]. We’re offering every day between 5 p.m. and 6 p.m. the chance to see a movie for $5.75. We’re offering students the opportunity to see a movie for $7.50. That is changing the way Canada sees movies.’

Cineplex, meanwhile, did not embark on a counter advertising campaign. The company is saving its advertising blitz for an upcoming theater, ‘Cinetropolis,’ in 1999.

In terms of new frequency award programs, Cineplex announced the company’s first-ever Frequent Flick Club, which offers customers a chance to earn free movies and free concessions. Famous has yet to create/announce a similar program.

Supporting art films

Not only are more screens in more locations good news for customers but independent distributors are also happy about the new addition to the exhibition field.

Part of amc’s programming strategy is to mix independent or specialty films with the commercial blockbusters at its theaters. For instance, on opening day the Oakville marquee had Red Violin and Elizabeth, which was also at the Scarborough theater. At press time, both films were still on the marquee and Life is Beautiful was also on screen at both theaters. This strategy is mostly met with a degree of optimistic skepticism.

‘Clearly with that many screens they’re going to be looking for product and they’re going to put in art films,’ says Jeff Sackman, president of Lions Gate Films.

‘The downside of that is sometimes at these suburban locations, some of these art films don’t necessarily play that well. We’ll be anxious to see how the theaters perform on the artier product.’

Sackman says he thinks Lions Gate ‘definitely will’ supply some films to amc, possibly Gods and Monsters in early 1999, but nothing is ‘specifically booked’ yet.

Andy Myers, senior vp distribution at Behaviour Films, says he too will keep his eye on the twinning exhibition.

‘I will support them and I think the other independents fully intend to do likewise,’ says Myers, but he adds that Famous, Cineplex and amc in the States have all tried this kind of strategy with ‘mixed results.’

‘I’m sure that there is a significant community of discerning filmgoers in Mississauga and/or Oakville,’ Myers says. ‘To date, no one has managed to successfully capture them in those particular cities. My experience has been that discerning filmgoers routinely don’t go to mainstream multiplexes to see films like Elizabeth. Perhaps that will change with amc Oakville and Scarborough, I hope so.’

(According to Gardner, Elizabeth is doing a ‘solid’ business at amc.)

Myers says Behaviour will supply amc with six films at the beginning of January.

Tony Cianciotta, president of Red Sky Entertainment, is clearly more optimistic about amc’s movie selections.

‘Where does it say that if you build a multiplex in, for the sake of argument, Oakville, that the only films that are going to make business sense for that market are the wide-release films. That’s nonsense. I think there’s enough people there to support films like Elizabeth, Life is Beautiful and any of these films.’ He concedes, however, that in general ‘there are locations where the skeptics are going to be right.’

amc doesn’t have any Red Sky films on deck, but Cianciotta says, ‘We are well on the way to creating those strategic alliances with some people in the amc so that we will supply amc.’

Bidding wars in debate

While some distributors are expecting the price of films to go up as a result of a third exhibitor on the field, exhibitors generally don’t think a bidding war for films will ensue.

Dan Lyon, vp distribution and marketing at Motion International, says, ‘My expectation is the industry average would go up and we’re very happy to accept the new average which is going to be higher.’ Lyon declined to estimate the amount of a possible increase.

Myers also believes prices could climb. ‘I think it will become more of a seller’s market, which is certainly good news for distributors. The film rentals could conceivably increase, certainly in the more competitive zones.’

But Karp says he is expecting no serious uptick in the purchase price.

‘The distributors want a fair price for their product and they want to make sure that patrons can continue to go see their product. History hasn’t shown that [expansion] has brought on any great changes. It’s in the interest of the studios that we take the money that we’re investing and pour it into creating better venues to make it more hospitable, more attractive. The studios want people to come to movies. This isn’t just about to see if they can squeeze every last penny out of it. That’s not our experience.’