Cinetopia owner Rudyard Coltman knows how to build movie theaters so dazzling that they draw moviegoers from miles around.
His theater at Westfield Vancouver mall pulls in one-third of its customers from the greater Portland area, making it one of the few Clark County venues strong enough to draw visitors from across the Columbia River. Last weekend, it was the highest-grossing theater in Oregon and Southwest Washington, Coltman said.
The older Cinetopia on Mill Plain Boulevard is one or two generations ahead of the industry standard for luxury theaters, making it “the finest in the world,” Coltman believes. The Vancouver-based company operates another theater in the Portland suburb of Progress, and this spring it opened its fourth venue in Overland Park, Kan., a Kansas City suburb.
But while Coltman envisions further expansion, his ambitions are threatened by a huge issue over which he has little control: the entertainment industry’s practice of sometimes refusing to release movies to rival theaters in close proximity to each other. It’s a high-stakes Hollywood dispute that already has damaged Cinetopia twice, Coltman told The Columbian on Monday. The first time was when the original Cinetopia opened in 2005 and operated for three months without a major movie. The second time is right now, when the Cinetopia in Overland Park is being forced to alternate openings of major movies with an AMC Entertainment Holdings theater that is three miles away, the Wall Street Journal reported Monday. Coltman told the newspaper that the luxury theater’s box office revenues are running 30 to 50 percent below projections.
Coltman was among small theater owners featured in the article headlined “Big Chains Put a Lock on First-Run Movies.” In a follow-up interview with The Columbian, Coltman said he hopes for an end to the movie distribution exclusivity practices that he sees as unfair to smaller operators. The practice, called “clearance,” allows theater chains to tell Hollywood studios that they will only screen a movie in a particular market if a nearby competitor is excluded from screening the same movie.
“We don’t think it’s legal or equitable,” Coltman said of the exclusion practice. And while he has not launched a legal battle, at least one other theater operator has. Birmingham, Ala.-based Cobb Theatres, an operator with 20 theaters, filed suit in January against AMC in U.S. District Court in Georgia, the Wall Street Journal reported. It accused AMC of antitrust violations and unfair competition. AMC did not comment on the litigation for the Journal article.
Tom L. Boeder, an attorney at Perkins Coie in Seattle who is representing Cobb and who is also an attorney for Cinetopia, said the “clearance” practice puts a damper on investments by competitors like Cinetopia. “Basically, what’s at issue here is whether there’s going to be any significant investment in competition from these premium theaters,” he told The Columbian.
One way to break the impasse would be for movie distributors to simply eliminate the “clearance” provisions, Boeder said. “There is some indication that distributors may come to their senses,” he said. “They lose money every time they agree to clearance. It’s exceedingly difficult to see an advantage to distributors.”
Coltman said the practice might have had a financial justification in the past, when making prints of movies cost $5,000 to $10,000 each. But digital technology has made those costs of movie copies negligible, he said. “It’s hard to argue any rationale, other than that the larger operators are trying to impede the smaller ones,” he said.
“I hope it will be resolved soon,” he said, “like next week.”
