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A Century in Exhibition—The 1990s: Globalization and Our on-line world

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A Century in Exhibition—The 1990s: Globalization and Our on-line world

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2020 marked the 100th anniversary of the founding of Boxoffice Pro. Though the publication you hold in your hands has had different owners, headquarters, and even names—it was founded in Kansas City by 18-year-old Ben Shlyen as The Reel Journal, then called Boxoffice in 1933, and more recently Boxoffice Pro—it has always remained committed to theatrical exhibition.

From the 1920s to the 2020s, Boxoffice Pro has had one goal: to provide knowledge and insight to those who bring movies to the public. Radio, TV, home video, and streaming have all been perceived as threats to the theatrical exhibition industry over the years, but movie theaters are still here—and so are we.

We at Boxoffice Pro are devotees of the exhibition industry, so we couldn’t resist the excuse of a centennial to explore our archives. What we found was not just the story of a magazine, but the story of an industry—the debates, the innovations, the concerns, and above all the beloved movies. We’ll share our findings in this series, A Century in Exhibition.

As the exhibition industry entered the last decade of the 20th century, the outlook was gloomy. Even the record year of 1990—with a domestic total of $5.02B—was not enough to assuage the fears of industry pundits who warned that a recession was looming. They cautioned exhibitors that several factors, including high ticket prices, home video, aging Baby Boomers and the ascent of a new generation who had grown up with home entertainment, as well as an oversaturation of screens, painted a bleak picture for the exhibition industry. 

The economy plunged into a recession in July 1990, taking the box office with it. There was, however, still reason for optimism. The end of the Cold War ushered in the era of the American superpower, bringing the promise of a liberal world order to the cinema industry. This new geopolitical context accelerated globalization and offered unprecedented opportunities for the expansion of American theater circuits abroad at a time when the domestic market was tapped out. The enthusiasm for international expansion was matched by the excitement generated by an entirely new kind of frontier: cyberspace. The surge in telecommunication innovation and new technologies in the 1990s would be a boon for some—yet an existential threat for others. In any case, it prompted the industry to innovate and reinvent itself for the digital age of the new millennium. 

‘The World Is Watching

“When pundits and cultural historians look back on the 1990s, the globalization of the world economy will likely be the defining story of the decade,” wrote Boxoffice Pro editor Ray Greene in July 1996. Greene was right. Not only has globalization shaped the world as we know it today, but this new global interconnectedness—documented by Boxoffice Pro and Greene himself—pushed American exhibition abroad while raising new questions about American cinema’s financial and cultural role in the world.

By 1991, Hollywood was already experiencing the impact of globalization at home. Four out of the seven majors had fallen into foreign hands: MGM/UA was now owned by the French Pathé Communications, Columbia TriStar by the Japanese giant Sony, 20th Century Fox by Rupert Murdoch’s News Corp Australia, and Matsushita Electric had just clinched a deal worth $6.59 billion to acquire MCA/Universal. But this sense of “foreign invasion” began to abate after the collapse of the USSR, and the proliferation of free-trade agreements brought new opportunities in previously impenetrable markets. Soon, Boxoffice Pro developed its coverage of foreign markets with an “International Reports” section, country-specific columns, and special issues on CinemaExpo in Europe, the Australian Movie Convention, and CineAsia. Greene, welcoming the launch of the first CineAsia in January 1995, lauded these global trade shows for revealing “that we all share a human face by celebrating what we share and providing an interpersonal conduit for educating each other about the things we do not.”

Trade shows were significant spaces for global intercultural exchanges. NATO/ShoWest, the amalgam of the annual conventions of NATO and ShoWest since 1988, emerged both as a forum to debate how exhibitors would adapt to a globalized world and as a driving force for international expansion. The slogan for the 1991 NATO/ShowWest trade show, “The World is Watching,” encapsulated the industry’s new preoccupations. William Kartozian, NATO’s president, introduced international audiences to the convention with “A Global Welcome,” while NATO executive director Mary Ann Grasso wrote, “Wilkommen, Bienvenue, Welcome!” It was the first convention chiefly focused on the international economy, featuring numerous presentations and seminars on international exhibition, distribution, and marketing. A few months earlier, in November 1990, NATO had launched an International Exhibition Committee to help facilitate American investments abroad. Soon, North American exhibitors were popping up all over Europe, South America, and Southeast Asia, while the African and Middle Eastern markets remained sidelined. Cineplex, for instance, expanded to Eastern Europe and South America, while UA expanded to Singapore in 1994 following the 1985 introduction of its first Asian multiplex in Hong Kong.

The signing of the North American Free Trade Agreement (NAFTA) in 1994 and the 1993 deregulation of the Mexican film market, which lifted caps on ticket prices and dropped quota requirements for Mexican films from 50 percent to just 10 percent by 1997, put Mexico at the center of the American expansion strategy. According to a Boxoffice Pro report from February 1994, AMC had “retained a real estate agent in Mexico to hunt up potential AMC sites there.” The Mexican market seemed particularly favorable, as Mexican cinemas, all previously owned and/or regulated by the government, were not in the way “of modern competition” for American firms. Cinemark de Mexico president Ken Higgins echoed the argument, claiming that “Mexico is where the U.S. was 30 years ago, with little single theaters and twins,” and that it boasted the second most avid moviegoers in the world after China. While local players like Cinemex began to rise, American exhibitors were quick to rival them. Cinemark, which had opened its first Latin American theater in the Chilean capital of Santiago in 1993, opened four theaters in Mexico right after NAFTA was signed. By 1997, Cinemark was on track to become the second-largest circuit in the world, with locations in the U.S., Canada, Mexico, Central America, Peru, Chile, Argentina, and Brazil, where the first multiplex with Cinemark’s signature stadium seating opened in July 1997. Cinemark International also announced a partnership with the second-largest Japanese circuit, Shochiku Co., to build 100 screens in Japan by the year 2000.

This expansion was driven by one mission: to bring innovative multiplexes to underscreened markets. Tim Warner, president of Cinemark International, summarized this in a May 1997 interview: “The thing we’re going to primarily bring is the state-of-the-art multiplex theater to Japan. Right now, they have something like one screen for every hundred and some thousand people—as compared to the U.S. which is about one screen for every 10,000 people—and yet it’s still one of the primary markets outside of the U.S. for U.S. films from a dollar standpoint.” But, he continued, “The potential of the marketplace, or the risk versus rewards, are very high because most of the markets that we are going in are very, very much underscreened.” 

Building global multiplex empires was not devoid of challenges. Exhibitors needed to change their corporate culture to fit into global companies as well as navigate local laws, economic regulations, and cultural attitudes toward cinema. Although the megaplex boom was taking off in Europe, particularly in the U.K. and Scandinavian countries, the Old Continent emerged as a particularly abstruse market. “You can expect to meet resistance in almost every market you go to, and in some places, it’s just flat-out against the law for anyone from outside the country to be involved in exhibition,” decried AMC International president David Seal in an interview in July 1994. Seal proposed circumventing working with local theater operators altogether, favoring instead partnerships with financial institutions and investors.

The last-minute failure in 1993 to incorporate films and other intellectual properties in the General Agreement on Tariffs and Trade (GATT), the most sweeping free-trade agreement until that point, further hampered the expansion of American audiovisual firms in Europe. There was a pervasive fear that these trade barriers in conjunction with the cultural policies of the European Economic Community, which was gearing up for a deepened integration and expansion after the reunification of Germany, would crowd U.S. product off of European screens. Jack Valenti, the MPAA (now MPA) chief who spearheaded the GATT talks on the cinema industry and, in the words of Greene, “emerged as perhaps the U.S.’s most eloquent spokesman for open global markets,” spoke to Boxoffice Pro in February 1994. “It was absurd—it was a joke. At 3 o’clock in the morning, it occurred to me like an epiphany that these people never wanted to negotiate. … I’m sad and disappointed that after seven years we couldn’t come to some sane conclusions.”

Indeed, the lowering of trade barriers for cinema was a contentious topic for many Europeans, particularly the French, who wished to protect their cultural identity from a perceived American imperialism. Reporting from Amsterdam at the CinemaExpo convention in August 1999, Senior Editor Francesca Dinglasan noted that “it was apparent that the continent’s individual countries remain fiercely proud of their own national and cultural identities.” Greene weighed in on the debate frequently, offering a qualified view on American cultural imperialism and arguing that the U.S. had a lot to learn from foreign markets. “It might be interesting to speculate about the invigorating effects of a sort of inverse cultural imperialism—in which the often more humane and humanistic messages celebrated in foreign product begin to influence American movies—might have on Hollywood,” he wrote in July 1995.

In 1996, he added: “To Americans the notion that U.S. movies could be perceived a threat to the intellectual life of other societies seems inexplicable since so few U.S. movies aspire to do more than entertain (…) but there is a certain truth to the ‘cultural imperialism’ arguments in the sense that even the most seemingly mindless American action film often deals in attitudes (about violence as a rite of passage, about the heroism of the common individual), which are American preoccupations, if only at the level of cliché. American cultural hegemony is rapidly becoming obsolete because of the commercial importance of foreign attitudes on the bottom line.” The imperative to please a foreign audience was inevitable for Greene, because, just a year earlier, American movies had grossed more in foreign lands than in the U.S for the first time in the history of Hollywood.

Megacircuits Rising

The international momentum was not only a consequence of a propitious global context. It was also a response to a very real domestic problem. The overscreening of America, due to the megaplex fever that started in the 1980s, led to an unrelenting hunt for foreign moviegoers. It was also a catalyst for the consolidation of the exhibition industry at home. The case of Ontario, California, where two major megaplexes were built across from one another and 54 screens existed within 700 square feet, served as a reminder of the nonviability of the current situation. “Thou Shalt not Ontario one another,” proclaimed NATO’s Kartozian.

“‘Grow or die’ still seems to be the philosophy of the megaplex exhibitors; with new construction destined to become an increasingly less viable option for expansion in the years ahead, the acquisition of already existing circuits has emerged as exhibition’s next big thing,” explained Greene in the Giants of Exhibition issue of January 1998. Cineplex Odeon and Cinemark had announced a merger in 1995. Had the deal materialized, the new company would have formed the largest North American circuit, with 2,839 screens. The announcement became a starting pistol for a trend of mergers and consolidations. 1997 was undoubtedly the year of the mergers: Carmike purchased the 195-screen First International Theatres. Regal proceeded to buy out the 95-screen Magic Cinemas chain and acquired the massive 643-screen Cobb Theatres, pushing Regal’s screen count past the 2,000 mark. Sony-owned Loews, meanwhile, merged with Cineplex Odeon to create the largest exhibition chain in history. In 1998, Regal was sold for $1.5 billion to two investment companies—Hicks, Muse, Tate & Furst, and Kohlberg Kravis Roberts & Co.—which combined it with the UA Theatre Group and Act III Theatres, creating another exhibition behemoth.

The studios were also moving forward with megamergers. In 1994, Sumner Redstone’s Viacom bought Paramount Communications for $9.85 billion. In 1995, the Walt Disney Co. announced plans to buy Capital Cities/ABC for $19 billion, making Disney the largest entertainment company in the world. The following year, Time Warner and Turner Broadcasting System merged in a $7.3 billion deal, creating the world’s largest communication company. The decade ended with the creation of the second-largest media company with Viacom’s acquisition of the CBS Corporation for $37.3 billion.

Ray Greene warned against the dangers of this anticompetitive consolidation. He feared that an ever-smaller number of megacircuits would exercise an unprecedented amount of control over what American audiences would watch. In January 1998, the editor wrote, “There is as yet no reason to view this development as anything other than virtue rewarded, the upside for a handful of visionaries who are reinventing the history of exhibition in our time. But big companies can also represent big targets, as Microsoft’s ongoing antitrust difficulties clearly demonstrate. The bad old days of the consent decree will almost surely never return but that doesn’t mean exhibition can’t learn from its history in a time where megacircuits for which there has been no pre-existing precedent start to define themselves and take shape.” Greene’s fears were surely justified. Yet the 1990s also saw growth for independent circuits like Landmark Theatres and Laemmle Theatres, coinciding with the boom of independent films. Companies like Miramax, bought by Disney in 1993 for $80 million, New Line, and October Films—plus Sundance directors like Quentin Tarantino and Steven Soderbergh—reinvigorated independent films and their theatrical consumption. “Independents,” wrote Greene in August 1994, “continue to survive and even thrive by doing what they’ve always done—offering alternatives to mainstream sensibilities in which the majors specialize.”

Interactivity and the ‘Information Superhighway’

The hypercompetitive landscape of the American market pushed theaters to innovate. American companies began creating immense urban screening environments capable of handling a wide range of films in release at any given moment under a single roof. But the megaplex of the 1990s was not merely a movie theater: It strived to be a total entertainment complex. Special formats were sought after for their impressive effects and potential to explore new narratives. After Sony Theatres’ giant flagship in Manhattan’s Lincoln Square became the first major circuit in North America to house an Imax venue, Imax rapidly moved into conventional exhibition. More and more exhibitors capitalized on the convergence between film and new entertainment technologies to create “family entertainment centers” aimed at providing innovative, interactive, multimedia experiences to their patrons. United Artists had its “Starports,” Regal its “Funscapes,” Carmike its “Hollywood Connection,” and Cineplex its “Cinescapes.”

One such multimedia product appeared in the winter of 1992 in select Loews locations in Los Angeles and New York. The “interfilm” I’m Your Man, which ran for 20 minutes, gave audiences the capability to select plot twists and pick the characters’ next moves. In 1994, AMC installed the interactive Interfilm technology exhibition system in some of its auditoriums. Loews partnered with ITT Systems Corp. to exhibit games in 10 of its multiplexes, and Cineplex teamed with Sega, DreamWorks, and MCA for its own entertainment center in 1996. Studios, too, got in on the action. By 1995, Time Warner, Sony, and Viacom/Paramount boasted interactive divisions, with Disney jumping on the bandwagon that same year.

The studios capitalized on their IPs with film-based video games or CD-ROMs that complemented individual movies. That strategy paired especially well with the exponential growth of animation prompted by Disney, Pixar, and the undeniable amelioration of computer graphics. In 1993, Disney’s Aladdin became the first animated feature in history to earn more than $200 million at the U.S. box office. The successes of The Lion King and later Pixar’s Toy Story validated the studios’ investments in interactive IPs. For instance, Disney’s animated storybook of The Lion King, which compressed the story of the film and offered additional material, animated characters, narration, and search options, sold successfully for $39.95 apiece. Yet, Boxoffice Pro was rather skeptical about the marriage of CD-ROMs and moviegoing, pointing to the flops of game-based movies like Mortal Kombat and Super Mario Bros.

Lobbies, seen as perfect locations for cross-marketing due to their heavy foot traffic, also underwent significant revamps. The theater lobby needed to expand far beyond its old identity as a place for concession stands with menu boards that just displayed pricing information. “We propose entertainment be brought out of the theater and into the lobby,” argued Cineplex Odeon’s manager of design and construction, Dana Kalczak, who supported showing trailers and other marketing material on HDTVs in theater lobbies. One critical innovation, developed by companies such as EIMS, ETM, Vast, and RDS Data Group, was the introduction of interactive POS kiosks that displayed information about current and upcoming films and discounts and allowed ticket sales to take place outside the typical box office stand. One example written about in Boxoffice Pro with great enthusiasm, despite its numerous glitches, was the installation of the first Cinetouch kiosks in Cineplex Odeon theaters in Toronto in March 1995. “It’s called Cinetouch, and it’s going to revolutionize the way moviegoers choose movies,” wrote the magazine’s Canadian correspondent, Shlomo Schwartzberg.

Throughout the decade, no other technological development garnered as much curiosity as the internet. In November 1994, a Boxoffice Pro writer defined this elusive new technology. “The internet comprises more than 20,000 computer networks in 150 countries and has over 25 million users worldwide. The internet provides information in both an exclusively text-based format and in a multimedia format,” he wrote. As it became increasingly clear that the trend was here to stay, understanding the internet became a central mission for the magazine. In an editorial in October 1995, Greene elaborated: “We’ve made informing you about developments on the ‘information superhighway’ a part of our mandate, not because we’re particularly obsessed with this stuff (like many of our readers, we view the ‘brave new world’ of ‘cyberspace’ with what we consider to be a certain healthy skepticism) but because—whatever their current status—many of the new ‘leading-edge’ information transmission technologies may eventually have a direct effect on the way exhibition conducts business.” One of these effects was the emergence of e-commerce. A growing number of profiles of and ads for companies like Moviefone showed that virtual teleticketing and the ability to book tickets online 24/7 was beginning to intrigue exhibitors. “Patrons like it because there’s no fuss—just a site and a few keystrokes. Exhibitors like it because it extends their box office into the multi-ticketing arena, affording greater coverage and helping translate a cinemagoing impulse into a final ticket-sales transaction,” noted one writer in November 1999.

Exhibitors also realized the importance of the internet in finding information about movies and theaters before one’s visit. Several theater owners and managers reported that they received incessant requests from patrons that they set up websites. Contributor Christine James wrote in February 1997, “More and more, modern-day moviegoers are turning on their computers and seeking out that ubiquitous https:// prefix to find the information that they need to decide where and when they’re going to see the latest Hollywood blockbusters.” In 1997, NATO initiated an ambitious plan to take all of exhibition into the Digital Age. Through an alliance with Times Mirror Company, NATO set up “Hollywood Online,” a website providing information on films and individual theater locations, including what was playing on which screen, cinema maps, and details on sound systems and accessibility. The startling success of 1999’s The Blair Witch Project, whose marketing was virtually limited to its website, crystallized the need to employ internet-based marketing. It also foreshadowed the democratization of video production and distribution as we know it today, while launching rudimentary “netcasters” (the ancestors of streaming) like Broadcast.com, Entertainer.com, and CinemaNow.

Shrinking Windows in a Fast-Paced World

The internet caused a wider cultural shift, one that Boxoffice Pro readers will surely relate to today. Already in the 1990s, the internet began to accelerate the pace of an increasingly fast, interconnected world and instilled, as some writers noted, a sense of disconnection from the “real world.” This changed the way many exhibitors thought about the societal role of cinema. Rusty Gordon, a theater operator in Tennessee, wrote an opinion piece in July 1996 in which he stated that “it’s a fast-paced world we live in—instant this, overnight that. But movies are special. People leave their homes, faxes, and phones to forget their troubles for a couple of hours at the movies. And that’s something you can’t do on television.” Director James Cameron delivered an impassioned plea to “keep showmanship alive in our hearts” as he accepted his 1995 NATO/ShoWest Producer of the Year Award. He implored exhibitors to “embrace the future, while remembering the real source of our energy: the images flickering on those screens, those big screens, in dark rooms, across the planet” at a time when “the world is speeding up logarithmically, and we are bombarded by a million shiny new ideas [… while] surfing fast and wobbly across a liquid landscape of new media, new delivery systems, whole new forms of entertainment made possible by the digital revolution.”

In a fast-paced world, cinemas offered a short, magical, breathing spell. The advent of new technologies and a societal view of theaters contributed to reframing the debate on theatrical exclusivity. William Kartozian insisted in April 1997 that a minimum six-month window would be necessary if exhibition were to remain healthy. The Boxoffice Pro team suggested a two-month extension for the bigger titles to ensure second-run theaters would have a fair chance. The internet, online piracy, HDTV, cassettes, and DVDs, Boxoffice Pro argued, were not just threatening the livelihood of theater owners by shortening the length of exclusive windows. As the pleas of theater owners like Rusty Gordon made clear, they were also assailing the sanctity of movie theaters as guards against the alienation and rush of the interconnected age. The issue of windows also became linked to the preservation of film as an art form and a technology. In April 1997, Greene was calling filmmaker/ producers like Steven Spielberg and George Lucas to support the idea of six-month windows even if it hurt their bottom line. “The shortening of video release window doesn’t just cheat exhibitors. It cheats moviegoers, filmmakers, and everyone involved with every step in the process. It seems like a no-brainer to expect that the same leading figures on the film production side who stand against the panning and scanning of widescreen film prints […] would get behind the concept of a six-month exhibition window,” he argued.

It seemed that for Greene, the issue of windows was tied to the preservation of film against a new threat: digital projection. By the mid-1990s, digital sound was already advancing fast, thanks to the work of pioneering companies like Dolby, Optical Radiation Corporation, and Eastman Kodak. The rapidity of innovation was such that the death of the analog soundtrack (even if rejected by Boxoffice Pro and its contributing specialists) was speculated as early as 1996. As analog sound was increasingly questioned, so was film. Many alternatives to 35 mm film were beginning to rival traditional formats. MaxiVision 48, touted for being far brighter, less wasteful, and more inexpensive, or CDP, a format eliminating the separations between frames without compromising the size or integrity of the image, were such examples. These ideas, however, never received the attention that the most controversial alternative, digital projection, would get. As would become clear in the first decade of the new millennium, no technology since the introduction of sound in the 1920s would engender as much controversy as digital projection.

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