Chains: It's a survival issue.

Byline: Lewis Taylor The Register-Guard

While smaller theaters such as Eugene's Bijou Art Cinemas can survive without programming commercials before their films, the big theater chains say they've been forced find other revenue streams - and that includes selling ad space.

"What we have is a wonderful facility, but it's a box, and we don't own the product; we have to lease the product," says Terrell Falk, a spokeswoman for Cinemark. "We don't own those movies, we don't have any part of it. We are just renting it. And in turn, you pay us to see it (the movie) in our beautiful box, but there is a big cost to rent that (movie)."

Not only do the multiplexes have high overheads, but they also don't earn much money during opening weekend, says Paul Dergarabedian, president of the box office tracker Exhibitor Relations. The arrangement varies from film to film and studio to studio, but in some cases theater chains must fork over as much as 80 percent of what they rake in at the box office.

"I think there's a misconception on the part of moviegoers that when a film makes $80 million in its opening weekend, that a big part of that is going to the theater, but it's not," Dergarabedian says.

"The reason a studio gets their money back first is because they ponied up the money for the marketing and the production budget. As time goes on - it's a sliding scale - the theaters start getting a bigger percentage of the box office as the film plays."

Compounding the problem: Many national giants still are hurting from a theater building boom in the 1990s that left many of them carrying more debt than they could handle, says Brandon Gray, a box office analyst for Box Office Mojo.com.

As a result, at least a dozen chains filed for bankruptcy in 2001-02, including Regal Cinemas, which operates the Cinema World multiplex in Eugene.

"They actually shot themselves in the foot, because more theaters meant that more people could see movies in the opening weekend, and that's when the studios get the biggest cut of the grosses," Gray says.

"The movies open absolutely everywhere (and) people don't have to wait for them anymore. If you go to the theater it's, `Oh, I missed the 9 o'clock. Well, there's a 9:15 starting.'

`It's very rare that you'll get an absolute sell out."

With big movies such as "The Last Samurai" and "The Lord of the Rings: The Return of the King" showing locally on at least four screens, it's easy to see what Gordon is talking about. But some consumer advocates say the money woes of big chains doesn't excuse the fact that captive, paying audiences are being subjected to TV-style commercials they weren't expecting.

"Theaters are not placing ads as entertainment for their customers," says Jason Thompson of Portland's Captive Motion Picture Audience of America. `They are placing them as a desperate effort to fund the mistakes of their overexpansion and bad business practices.

`Theaters and studios have a mutually beneficial relationship. If the theaters are struggling, they need to renegotiate these relationships rather than holding their audiences captive to unwanted messages."

Regal, the country's largest chain, is hoping to short-circuit some of the criticism coming from viewers with a 20-minute pre-show that takes the place of pre-movie ads and makes no bones about what it is.

Dubbed "The 2wenty," the program starts roughly 20 minutes before show time and includes entertainment, news shorts, music videos and ads. The 2wenty already has started showing in some Portland theaters, and may debut at Cinema World sometime in 2004.

CAPTION(S):

Images such as this one from the Foundation for a Better Life are frightfully familiar to frequent theater patrons.