Box office blues

David Whalen
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Tough times for small theatres in Newfoundland

Telegram photo illustration

Talk to theatre owners around the province and the message is clear now is not the time to open a theatre in rural Newfoundland.

Burin Cinemas owner Brian Marshall says the troubled rural economy, characterized by high unemployment and out-migration, would make opening a small theatre virtually impossible.

If youve got money and you want to invest in a theatre right now, Newfoundland is not a good place to do it, Marshall said.

These sentiments were brought home in a study released last week by Statistics Canada. Operating profits for theatres in Canada declined from $110 million in 2004 to $29 million in 2005.

But while the provinces largest movie provider, Empire Theatres, is dismissing the numbers as an aberration, rural theatre owners say the numbers are indicative of the constant uncertainty they are facing.

The Burin theatre opened in 1980. Marshall says the fact that the business has been around for so long may be whats keeping him afloat.

If youre in already established and youve got everything bought and paid for, youll make a living.

Dean Leland, vice-president of marketing for Empire Theatres, owner of the two largest theatres in the province, Studio 12 in St. Johns and Mount Pearls Studio 6, says 2005 was somewhat of an aberration business-wise.

He says 2005 didnt have as many of the blockbuster films as the year before. Indeed, the five best-picture Academy Award nominees that year were each out-grossed by the documentary March of the Penguins at the time of the Oscar ceremony.

We had fewer of the midrange films that did big business, Leland said. Our business is only as good as what Hollywood puts out and what the independent studios put out.

Yet, Leland says, numbers have picked up significantly in 2006 and 2007 thanks to high-grossing installments of The Pirates of the Caribbean, Harry Potter, Shrek, and Spider-Man, among others.

However, smaller theatres in rural Newfoundland have to depend on factors beyond the fare they can offer.

Clarence Russell, co-owner of the Clarenville Twin Cinemas, says in his market, the strength of his business will often hinge on outside factors, such as whether or not the local ski hill is in full operation or if shipping of films is delayed by harsh weather. This year, weather has proven particularly frustrating.

Id say we lost five weekends because of weather and product not getting in because of shipping, Russell said.

To counter this unpredictability, Russell and his brother also own a six-lane bowling alley, which they operate during the slow box office months of winter.

Youve pretty well got to have something like that to keep the cash flow going, Russell said.

The digital age has posed new problems. In recent years, theatre owners the world over have had revenues squeezed by illegal movie downloads.

Keith Oates, co-owner of the Carbonear Cinemas, has seen the problem first hand. His theatre, which opened in 1979, has seen illegal downloads trim profit margins.

Illegal downloads are taking away revenue, Oates said. People arent coming to the theatre because they can get (movies) for free.

Leland agrees.

Any time the content is available in some form other than sitting in a movie theatre, its going to have an effect, he said.

Canadian theatre owners are hoping new federal anti-piracy legislation passed in June will remedy this. The new legislation makes illegal downloads part of the Criminal Code, meaning violators could face jail time.

Canada was widely considered to have some of the least effective anti-piracy legislation in the world. The U.S. Congress even placed Canada on its 2006 anti-piracy watch list.

Though the legislation is still fresh, Leland is optimistic.

Its a very important step for us, he said.

With the laws in place, Leland predicts business will continue to be strong in St. Johns.

Studio 12 is a very big location for us, Leland said. People love to go to the movies in St. Johns.

But Russell says the delicate balancing act will continue in Clarenville, where revenues arent nearly as stable.

Our biggest problem is keeping up with the expenses, Russell said. People will go into town and pay $12 a ticket and wont bat an eyelash but if I charge $6.50 I catch hell.

Organizations: Empire Theatres, Studio 12, Statistics Canada Burin theatre Penguins U.S. Congress

Geographic location: Newfoundland, Canada, Hollywood Caribbean Clarenville

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