ArcLight Boss Ted Mundorff: Indies Like ‘Moonlight’ Are ‘in Jeopardy’ with Theatrical Window-Shrinking

When Universal and AMC Theatres reached a detente last week to shorten the traditional 90-day theatrical window to just 17 days, it was as clear a sign as ever that film exhibition has changed for good. While it’s unclear exactly what the domino effects will be, ArcLight Cinemas/Pacific Theatres President and COO Ted Mundorff has issued a warning: If independent film gets caught up in the studios’ wheeling and dealing, the impact could be disastrous.

Mundorff offered his thoughts during a panel titled “The Future of Distribution is Now: New Paradigms,” posted online this week as part of the ongoing Film Independent Forum. While he said he’s optimistic about the return of the theatrical experience and its future importance to the industry, he offered a blunt assessment on the current state of affairs.

“Indie films are, I think, the films that are most vulnerable right now,” he said. “I think windows will change from the major studios and the major exhibitors. What I’m afraid of is that indie film gets caught up in that. The actual theatrical model, on an indie basis, is you get a ‘Moonlight’ out there that plays for 15 or 18 weeks. If we shrink windows in the indie world, indie films are in real, real jeopardy, in my opinion.”

Strategies for releasing independent films are vastly different than those for studio tentpoles. For example, buoyed by a massive marketing budget and franchise awareness, last year’s “Avengers: Endgame” earned nearly 42 percent of its total $858.37 million domestic gross during its opening weekend in 4,662 theaters.

After premiering at the Telluride Film Festival in 2016, “Moonlight,” by comparison, earned $400,000 when it initially opened in four theaters in 2016 — a feat for a specialty film. Then word-of-mouth buzz led to a wider release, a Best Picture win, and eventually a total domestic gross of $27.85 million, a runaway success for distributor A24.

Among those four theaters that screened “Moonlight” during its opening weekend was the ArcLight Hollywood, exemplifying that location’s importance in the successful launch of independent movies. The film was, at its height, screened at 1,564 theaters.

“No one knows what the future is going to look like, except that it’s pretty clear it’s going to look different than it does today,” Mundorff said. “We need to protect the indie films.”

Mundorff offered two reasons why theatrical will rebound after the pandemic: One, movies shown in cinemas will continue to be a barometer to separate shlock from masterpiece in an era where a growing number of streamers are pumping out an ever-growing number of films. And two, the recent PVOD numbers that have been publicly released, such as those from Universal’s experiment with “Trolls World Tour” show “if you really do the math and know there’s no theatrical to come worldwide, I don’t know that it was such a great success.”

The Universal-AMC spat reached a head earlier this year after Universal said “Trolls” side-stepping a theatrical release was so successful, the company would continue to release films for in-home viewing at a premium price, even after theaters reopen — prompting AMC to say it would ban the studio’s films from its auditoriums. That’s because the $77 million in revenue Universal earned from “Trolls World Tour” translates into the same profit the studio earned for the original “Trolls,” which grossed just under $154 million.

The pair of corporate behemoths made nice last week, when they announced future titles would get at least three weekends of theatrical exclusivity, a period that coincides with the time that a majority of studio fare’s grosses are earned.

That comes as specialty distributors like Neon, Kino Lorber, and Oscilloscope have embraced continued partnerships with arthouse theaters during the pandemic through virtual cinema programs, which rely on those theaters marketing the film to their audiences, who are able to watch the films through portals set up by the theaters. The revenue, just like that from in-person screenings, is split. Meantime, distributors including A24 and Sony Pictures Classics have held off on any virtual releases.

Despite his hope for the continued role of theatrical releases, Mundorff said he expects many theaters will meet their demise.

“It will not look the same [post-pandemic] — there’s going to be a shakeout, a shakeout that I expected, frankly, back when there was digital conversion,” he said. “I thought there would be a lot, lot more theaters that would collapse under that and frankly, there weren’t. There’s still about 38,000 theaters in North America. Some of those didn’t go away and maybe some of them should have. Now I think the pendulum will swing pretty far. I think a lot of healthy companies will probably not make it, or certainly will be a different version of what they once were.”

For its part, Mundorff said Pacific/ArcLight is seeking to expand its drive-in footprint, as indie distributor IFC Films continues to have great success in releasing films in open-air theaters. Pacific owns the Los Angeles-area Vineland Drive-In and was once the largest operator of ozoners in the world, he said.

The company has six LA-area Pacific locations and 11 ArcLight locations across the country. All are currently closed and will remain closed until they can safely reopen. Mundorff noted that the current push to reopen theaters is largely led by publicly owned circuits beholden to shareholders.

“We want to open ArcLight, we want to open Pacific, we want to open the industry — when it’s safe,” he said. “We do feel people will want to come back.”

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