Movie Slump Stirs Tensions in Hollywood
By SHARON WAXMAN
Published: August 19, 2005
LOS ANGELES, Aug. 18 - The tension in Hollywood over declining box-office receipts heated up on Thursday as the head of the trade organization for movie theaters accused the chairman of the Walt Disney Company, Robert A. Iger, of leveling a "death threat" against his industry.
The trade official, John Fithian, president of the National Association of Theater Owners, was responding to a statement by Mr. Iger to Wall Street analysts this month that movie studios need to accommodate changing consumer demand by releasing films simultaneously in theaters and on DVD.
"Simultaneous release would seriously damage the theater industry," Mr. Fithian said in an interview, referring to the prospect as a "death threat to our industry."
"It would substantially weaken the marketing potential of the theatrical release for the ancillary markets," he added, "and it would devalue Hollywood movies."
Mr. Fithian said Mr. Iger was drawing the wrong conclusion from a 10-percent drop in box-office revenue this summer, namely that some consumers prefer to watch movies at home.
Instead, Mr. Fithian said, the slump was a result of the poor quality of this summer's movies, observing that declines of this magnitude did not happen because consumers suddenly decided they preferred DVD's.
"The reason for short-term peaks and valleys is the product," he said. "There aren't long-term structural things to industry that change in a one-year time span."
In his comments on Aug. 9, Mr. Iger said the box-office decline was an alarm bell for the industry.
"I think windows in general need to change," he said, referring to the time between the theatrical release and the introduction of the DVD.
"They need to compress," Mr. Iger said. "I don't think it's out of the question that a DVD can be released, in effect, in the same window as a theatrical release, although I'm sure we will get a fair amount of pushback on this from the industry."
Mr. Iger declined to respond on Thursday to Mr. Fithian's comments.
The decline at the box office has been the subject of debate all summer. Attendance has been down even more than revenue, a dip of 12 percent from last summer, according to Exhibitor Relations, which tracks box- office data.