Date: December 2003

Will hefty concert ticket prices and limited availability start driving fans to movie theaters to see their favorite bands? That remains to be seen, but theater chains are eagerly exploring the possibilities.

A trio of new live DVDs got their big screen debuts recently in movie houses across North America. The “Coldplay Live 2003” CD/DVD was screened Nov. 3 at Regal Entertainment Group theaters in 31 U.S. cities. The event coincided with a similar stunt for the Avril Lavigne live CD/DVD, “My World,” which was shown at free screenings in 24 U.S. cities and the Tenacious D “The Complete Masterworks” collection, which held free screenings in four cities the same night.

“We wanted to make the biggest impact possible based on the fact that this band has achieved such a high level of success and released a live CD/DVD so quickly,” said Ricky Riker, senior director of marketing for Coldplay's Capitol Records.

The effort is a continuation of Regal's two-year experiment with new applications for its movie theaters, capitalizing on its Digital Content Network (DCN) capabilities, which allow the streaming of crystal clear digital content to several hundred of its theaters. Previous events have ranged from live professional soccer and college football games to live and taped events by Beyonce, Kiss, Tom Petty and Korn.

The venture was launched to combat attendance that sometimes dips as low as 5-8 percent during the typically slow weekdays, according to Ray Nutt, executive vice president of Business Development for Regal CineMedia, a technology and marketing offshoot of the largest theater chain in the world.

“There's no question that the movie business is very good Friday, Saturday and Sunday,” said Nutt. “But those assets sit empty and underutilized Monday through Thursday. Another advantage of the music events is that, with advance ticket prices averaging $10 and day-of tickets around $12.50, the “live” concert screenings are a bargain compared to the traditional live concert.

Even as they beat the competition, Riker said he is not concerned about backlash from concert promoters. “I haven't heard anything from promoters, but we're not coming against a tour,” he said of the Coldplay stunt. “They're out of the marketplace working on a new album. There's no tour to cut into.”

The Lavigne screening is part of an ongoing partnership between BMG Records, AMC and Movietunes, which involves everything from showing videos by BMG artists on the screen before movies to playing BMG music in the theater, said Kirk Bonin, Senior Director of Mainstream Sales for BMG.

In the next year Bonin said he would like to do several more major music events for new albums by BMG artists. He also foresaw doing live feeds down the road as a way to hit secondary and tertiary markets that were missed by a major U.S. tour. AMC was the first to wade into the digital theatercast of a concert in July of 2001 with a broadcast of a Red Hot Chili Peppers concert, according to spokesperson Rick King.

Like Regal, AMC has since done college and pro football screenings, corporate events, as well as a Mike Tyson fight and weekend replays of local college football games.

“This all goes hand-in-hand with how we see the role of theaters,” said King. “They are an out-of-home entertainment center and people come to theaters for a communal atmosphere and the visual effect.”

Regal reports an initial investment of more than $70 million to start deploying its digital distribution network to 5,000 screens and 1,300 42-inch high-resolution plasma screens in more than 400 theaters across the United States. By 2004, Nutt said the DCN will be available in 60 of the top 75 U.S. markets where Regal operates.

King said AMC expects to double its 1,200-screen digital capacity within the next 3-5 years. The allure of digital sound, comfortable seats and the big screen has helped Regal expand its business well beyond the typical multiplex fare.

In addition to the sports, Broadway, music and wrestling options, the chain has begun renting out theaters on Sunday morning to church services. Nutt said more than 60 churches across the country are holding services in Regal venues every Sunday morning. Riverside Baptist in Denver had a congregation that was growing so fast its pastor asked if he could use a 12-screen Regal theater as an extension of his traditional worship space. The church now rents out five theaters every Sunday morning, one for the main services with up to 500 congregants, the rest for break out bible study sessions.

Another recent initiative involved gathering 20,000 grade school students and educators across the country for a writing and reading lesson built around the movie and book “Holes.” The lesson plan was broadcast from a studio at the Staples Center in Los Angeles and hosted by newscaster Willow Bay. Nutt said Regal is planning several more major music events for 2004.

Regal theaters are also increasingly used by major corporations for business presentations and for private corporate sneak preview screenings of major movie events. A recent report from “Screen Digest” magazine predicting that by 2008, alternative content screenings could account for up to 35 percent of exhibitor's profits.