Audio Video News

Want to build a real home theater? With a film projector and a really huge screen? You may get your chance to buy some excellent theater equipment at bargain prices in the coming months. Hundreds of theaters nationwide will be closed to cope with the current oversupply, according to January announcements from some of the biggest theater operators in the US.

On Thursday, January 25, AMC Entertainment, Inc. announced that it will be closing 80 of its 186 multiplex theaters, a total of 548 screens, by early 2004. The Kansas City, Missouri–based theater operator will allow leases to expire on unprofitable theaters, for an eventual reduction by approximately 20% in its number of screens, with a further 241 to be watched closely for profitability. AMC is the fourth-largest theater operator in the US, running 176 theaters with a total of 2626 screens nationwide (mostly in Southern and Western states), ten theaters with a total of 176 screens in Canada, and five theaters in other countries.

AMC's decision coincided with similar moves by its competitors to shutter unprofitable theaters, as many as 1200 of which will be closed in the near future. The winnowing of the theater industry is the result of rampant overbuilding in the mid-1990s, resulting in a record 37,000 screens throughout the United States. Some analysts believe this is about 10,000 too many, according to the Los Angeles Times.

Dave Lund, vice president of engineering for Minneapolis-based Media Technology Source, recently stated that, during the building frenzy, his company helped finish as many as "800 theaters per year." Leveraging its commercial theater expertise, MTS has begun making a shift into upscale home theaters, Lund mentioned.

Last year, Carmike Cinema, Inc. filed for bankruptcy. The nation's #3 theater operator specializes in multiplexes in mid-size cities, with hundreds of theaters throughout the Midwest. In the last months of the building boom, the Columbus-Georgia–based company was the subject of a glowing profile in the Wall Street Journal. Regal Cinemas, Inc. and Loews Cineplex Entertainment Corp., the industry's #1 and #2 respectively, are both on the edge of profitability due to the theater glut. A merger of the two may accompany cutbacks in the number of theaters. AMC has also been rumored as a merger partner for Loews.

Although movie fans in some outlying areas may have to drive farther to see the latest releases, the cutbacks will primarily involve multiplexes that duplicate each other's efforts by showing the same films. The reductions won't significantly affect art houses or other quality theaters, according to analysts. The move is a natural part of the economic cycle, according to Paul Dergarabedian, president of Exhibitor Relations, which monitors movie box-office returns. "What is happening is a weeding out of the driftwood, which is, ultimately, good for movie-goers," Dergarabedian explained. "They will end up with the cream of the crop, seeing films in the best environment." Despite the theater surplus, the US theater industry did record business last year, with a total of $7.7 billion in revenue.