By Ryan Faughnder

Los Angeles Times

Derek Reis, general manager of the historic Little Theatre in Rochester, New York, was expecting a decent Monday night crowd for his cinema’s screening of David Fincher’s satire “Fight Club,” a movie produced by 20th Century Fox.

Days before the screening, Reis contacted a studio representative to confirm the digital version of the movie was on its way. But the response he got surprised him: The studio would no longer license its old films for commercial theaters. The screening was canceled, with Reis hanging a sign in front of the theater, which opened in 1929, to notify patrons.

“We’re not Regal; we’re not AMC,” Reis said. “We’re just one theater out in Rochester trying to play ‘Fight Club.’”

What changed, however, was clear. Fox, and the movies in its storied library of motion pictures, is now part of Walt Disney Co., which has long placed tight restrictions on when and how cinemas can screen its older titles. Disney’s longstanding policy is to not allow first-run theaters or commercial discount cinemas to screen movies from its library, whether it’s an animated classic such as “Lady and the Tramp” or a more adult-oriented film such as “The Sixth Sense.”

That policy will now apply to Fox’s vast catalog, according to exhibition sources who were not authorized to comment. The exception, these people said, is “The Rocky Horror Picture Show,” a mainstay of midnight audience-participation screenings and Halloween parties. Repertory theaters — those that specialize in screenings of old titles — will still have normal access to Fox movies, sources said.

The policy shift for Fox films has caused confusion among exhibitors. On Friday, a studio representative contacted the Little Theatre to apologize, saying there had been a misunderstanding about whether or not the cinema qualified as a commercial theater, Reis said.

That Disney would tighten access to the Fox movies is not a surprise. The firm is famously protective of its intellectual property, which it leverages across multiple businesses including television and theme parks. Disney, for example, is known for releasing its classic animated titles such as “Beauty and the Beast” and “Snow White” from the famed “Disney vault” for a limited time on home video.

There’s a clear business rationale for Disney to create scarcity. The company is counting on the combined library of Disney and Fox films to draw subscribers to its upcoming streaming service Disney+, which launches in November. The service will feature such classics as “Sleeping Beauty” and “Snow White and the Seven Dwarfs,” along with popular films and original content from Marvel, Pixar and Lucasfilm.

Still, the extension of the company’s theatrical policy to Fox’s vault has given some theater owners pause.

Art houses, independent circuits and other commercial theaters have traditionally screened films such as “Die Hard” and “Home Alone” during the Christmas holidays. For some chains, including Alamo Drafthouse and Landmark Theatres, such screenings represent a significant business, helping to fill seats during the week and odd hours that normally don’t draw huge crowds with current blockbusters.