Shindler’s Site: LF2K – E.O.Y.

The year 2000 is over, and what a year it was! Time for a bit of reflection with an eye to the future.

Last year may be seen as a year of the highest highs and lowest lows in many industry sectors and in many parts of the world.

A year ago many prognosticators predicted that 2000 would be tumultuous, but few forecast the events that eventually occurred. The year started out on a high that generated a sense of euphoria in many people. The celebrations around the globe as the calendar rolled over were a delight to behold. The fact that the dreaded Y2K disaster did not strike only increased the sense of jubilation.

The stock market was high and continued that way through the most of the first quarter. Then investors became wary of all the companies that were showing up without a plan. They began to demand that companies develop a clear pathway to profitability. What a concept! When many could not meet their investors’ expectations, things began to take a downturn.

Many people called it a correction, at least at first. While that may have been the appropriate term for what the stock market was doing, the real correction was that companies everywhere, especially the dot-coms, were being forced to get back to basics. Investment-based decisions forced them to rethink their role in the marketplace and to correct their business models and management systems—that is, their systems for, and approach to, doing business.

The LF industry also began the year on a high note. 1999 had been a pretty good year, with increased production, many new theaters, and strong recognition from outside the LF arena.

The release of Fantasia/2000 helped increase that recognition considerably. People who had never attended an LF show came in droves. Although not every theater playing the film had blockbuster results, most did. Worldwide box office for the film (including its less-than-spectacular 35mm run) on its first anniversary is nearly $90 million. Not bad!

Mysteries of Egypt and T-Rex, both in release for a couple of years now, have topped total worldwide grosses of $70 million and $56 million respectively, and are still playing. Not bad, either!

But it has not all been great in the LF world. The troubles of several conventional theater companies spilled over to the LF industry, striking Imax Corporation particularly hard, both in its bottom line and in its stock price. To many, Imax is the essence of the LF industry. Right or wrong, that perception is one with which we deal daily.

Other LF companies, including Showscan and Iwerks, had their financial problems as well. These have been reported on in these pages and will not be repeated here.

A number of LF theaters have closed since last year. The reasons are varied and are do not necessarily foretell a widespread decline. In a growing and evolving industry this is normal.

But a year is only a brief span of time, 10% of a decade, 1% of a century. What is most important is not just what occurred during a single year, but what the overall trend has been and where along the curve we are. I believe the trajectory is still heading up, despite the current dip.

The predictions I made in this column a year ago ("LF2K," MaxImage!, December 1999) were intended to look several years out. They still apply. Let’s review several of them:

• "Looking ahead, we see that several companies will grow beyond their entrepreneurial roots and become professionally managed organizations. With several large companies as players in the industry, competition will be more meaningful and positive in all respects. Industry domination will be a thing of the past. This part of our evolution, although vital, will be painful, as many will not survive the changes, victims of future shock….
• "A few purely commercial LF films will become blockbusters and will turn the heads of the global production community. At the same time, several traditional LF films will break new ground in presenting images and stories about breakthroughs in science. These films will achieve similar box office success….
• "A balance will finally be achieved between the needs of institutional theaters and the needs of commercial theaters….
• "Critical mass [in exhibition] will be achieved. Theaters are no longer located only in larger cities. Institutional and commercial theaters alike will spread to every suburb and beyond. Enough new films will be made each year to meet each segment’s needs. Balance and harmony will be achieved….

The LF industry is definitely experiencing growing pains. Any industry that grows at the rate we have over the past five years is bound to experience such pains. Let’s consider them normal.

What is most important is that the wake-up call has been heard and the industry has taken heed and is reexamining its ways of doing business. As with the stock market, it may be time for a correction, a readjustment of the systems by which we work. There is too much at stake not to do it.

That is why I was pleased to learn through the LF Examiner that the Giant Screen Theater Association had issued a Request For Proposal to determine, among other issues, whether "the current financial model for the production and showing of educational films work[s] adequately for all involved." The GSTA is to be congratulated for its determination to tackle the issue at hand.

I am also pleased to announce that The Shindler Perspective, Inc., has been awarded the contract to perform the study. It will involve input from a large cross-section of the industry to help us assess and determine which models will work best as the industry moves forward.

I look forward to hearing from my many colleagues who have the LF industry’s needs and future in the forefront of their minds. Best wishes to all for the New Year.