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Shari Redstone Says ‘Thousands’ of Theaters Should Close

July 8 (Bloomberg) -- Shari Redstone, president of National Amusements Inc., said the U.S. has too many movie screens and the industry would be healthier if “thousands fewer” were operating.

The cinema industry’s best prospects for growth are in international markets, including South America, where consumers have fewer opportunities to see films in modern theaters, Redstone said at the Variety Venture Capital & New Media Summit in Beverly Hills, California.

Revenue from National Amusements’ 75 screens in Argentina has increased 56 percent this year, and sales from 121 screens in Brazil are up 15 percent, said Redstone, the daughter of Sumner Redstone. The company plans to build more theaters in the region to take advantage of demand, she said. National Amusements, based in Norwood, Massachusetts, operates more than 950 screens worldwide, according to its website.

“The U.S. is over-screened,” Redstone, 57, said. “I don’t see the number of screens diminishing as much as they should.”

Exhibitors in the U.S. operate 39,533 screens at 5,740 theaters, according to the National Association of Theatre Owners. Fewer screens would boost profit margins for operators, said Redstone, whose family controls Viacom Inc. and CBS Corp.

“Fewer theaters would make the financial model work better,” she said in an interview after her remarks. She declined to provide a specific number.

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Cinema owners are threatened by studio plans to shorten the time between a movie’s theatrical run and its move to video-on-demand, Redstone said in an interview.

Typically, studios wait four months from a film’s release in theaters before selling the movie for viewing at home. Experiments that shorten the time frame, including earlier releases in DVD and VOD, have failed to make up for an overall decline in studios’ home-video revenue, Redstone said.

“The ultimate value of a movie is determined by how well it plays in theaters,” she said. “If we don’t protect that window, it’s going to go down.”

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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