Disney Orders Theaters to Drop On-Screen Ads : Entertainment: The studio says it will pull its movies from exhibitors that fail to comply. The ban is apparently a first for the industry.

Walt Disney Co., in a get-tough move aimed at movie exhibitors, said it will stop showing its films in any theater that runs on-screen advertising with them.

The ban is apparently the first such move by a major movie studio. It includes advertising by newspapers such as the Los Angeles Times, which for about 40 years has run promotional spots on movie screens in exchange for discount rates on movie directory listings in the paper.

On-screen advertising “is a turn-off. Audiences don’t like it. They hate it,” said Richard Cook, president of Disney’s Buena Vista distribution unit.

On announcing the new policy Thursday at the ShoWest exhibitors’ convention in Las Vegas, Cook was greeted with applause by some theater owners, but others responded angrily to what they saw as high-handed behavior by the studio.

“We can’t keep raising ticket prices to offset increasing costs. . . . This is a very serious problem,” Allen Karp, president of Cineplex Odeon Corp., said of the Disney move. Cineplex, which is 49%-owned by MCA Inc., parent of Universal Pictures, is among the biggest theater chains that regularly use advertising. Karp said he was talking with Disney about a “mutually acceptable” way of meeting the studio’s concerns.

“Disney thinks it’s swinging a pretty big bat right now,” said another theater manager, who declined to be identified. He said he received a letter from Disney on Wednesday telling him not to bother bidding on “Pretty Woman,” a Disney film set for distribution in March, if his chain wasn’t prepared to comply with the advertising policy.

One of the biggest purveyors of on-screen advertising is New York-based Screenvision Cinema Network, which claims to have placed ads on about 6,000 of the nation’s approximately 23,000 theater screens. Screenvision officers didn’t return calls seeking comment on the Disney move.

Lured by the desirable demographics of movie-going audiences, companies have turned to on-screen advertising for products such as Toyota and Mitsubishi automobiles, Kodak film and Dr Pepper soft drinks.

“No one has put a number on (the amount of such advertising). But it’s gone way up. . . . The biggest category is automotive,” said Marcy Magiera, a reporter for Advertising Age.

Some movie executives have complained privately that the ads alienate audiences. But none has so far been willing to take a step similar to Disney’s--and risk seeing its films kept off some screens by exhibitors who want to continue advertising.

Distribution executives from 20th Century Fox Film Corp. and Paramount Pictures didn’t return calls seeking comment. Fred Mount, Universal Pictures’ distribution head, said he wasn’t aware of any company that planned to follow Disney’s move immediately.

One Los Angeles exhibitor, who declined to be identified, said he believed that Disney could enforce the policy without much difficulty, particularly if a second major distributor followed suit.

“Given the choice between a Chevy ad and a Disney movie, you’re going to take the Disney movie,” the exhibitor said.

Disney angered some theater owners a year ago by going to a so-called per-capita system, under which it takes a fixed dollar amount for each ticket sold rather than a percentage of the box-office take. The system tends to discourage the sale of discount tickets in first-run movie houses but didn’t apply to discount theaters that normally show a film after its first run is over.

Paramount followed with a per-capita system that applies to discount theaters.

“We’re not going to lose theaters,” Disney’s Cook insisted Thursday in discussing the new advertising policy. “We’re trying to preserve the movie-going experience. Attendance has been almost level for 10 years, and this industry can ill afford any erosion.”

Cook said Disney would ask theater owners with existing advertising contracts to make a “good faith” effort to have Disney films exempted from the agreements. But he said Disney would allow exhibitors to honor those contracts if no exemption could be obtained and would only expect compliance with the studio’s no-advertising rule on renewal.

Disney has said it will make exceptions for slide advertisements shown during intermission and for “approved” charitable ads. Asked whether advertising by The Times and other newspapers, such as the L.A. Weekly, would be included, Cook said: “It is. That is an advertisement. We’re not splitting fine hairs here.”

A Times spokeswoman said: “Our arrangement is with the theater owners. We haven’t been contacted by them, so there’s not much to say.”

One individual familiar with the paper’s ad agreements with exhibitors said the “economic burden (on theater owners) is going to be enormous” if they are forced to pay the paper’s normal ad rates when advertising Disney films.

Still, several exhibitors contacted at ShoWest said they favored the Disney policy. “Even if it costs us money, I’m for it,” said Bruce Corwin, head of Metropolitan Theatres, a major Southern California chain.

Corwin said he briefly experimented with advertising but dropped it from many of his theaters because of an audience backlash. “The response was so loud and so negative, it was clearly not appropriate for us. You have to go with the culture, and the culture said no commercials,” Corwin said.

Metropolitan continues to show ads in its Spanish-language theaters, because audiences in those theaters didn’t object, Corwin added.