Final Regulatory Assessment and Final Regulatory Flexibility Analysis Final Rule - Nondiscrimination on the Basis of Disability by Public Accommodations - Movie Theaters; Movie Captioning and Audio Description

Number of Analog Auditoriums
Section 3.1.4 shows how the number of auditoriums exhibiting digital and analog movies is calculated.  As explained, industry research indicates that most auditoriums exhibiting analog movies are operated in smaller movie theaters.  Therefore, all auditoriums exhibiting analog movies exclusively are assumed to be in Miniplex and Single-Auditorium movie theaters.  Table 6-5 below shows how the projected number of analog auditoriums is calculated according to the assumptions previously explained in Section 3.1.  Due to recent industry trends and the rapid conversion to digital projection systems, this alternative analysis assumes that no new analog movie theaters will open over the period of analysis.

Table 6-5 : Calculation of Number of Indoor Auditoriums Exhibiting Analog Movies

Compliance Date
As discussed previously, the compliance period analyzed for auditoriums exhibiting analog movies is four years. This is longer than the 18-month compliance date for auditoriums exhibiting digital movies in the primary analysis (Section 2.1.2).  With the longer compliance date, movie theaters with analog auditoriums will have more time to purchase the necessary equipment.

Baseline
Industry research indicates that fewer auditoriums exhibiting analog movies are equipped to provide closed movie captioning and audio description than auditoriums exhibiting digital movies.  Unlike digital captioning equipment (Section 3.4), there is currently only one commercially-available product—the Rear Window® Captioning system (“RWC”) developed and marketed by WGBH—that enables analog systems to display closed movie captions to moviegoers on individual captioning devices.  The Department’s research indicates that some movie theaters have already purchased the Rear Window® systems for their auditoriums.  As a result, this alternative analysis assumes that two percent of all auditoriums exhibiting analog movies are equipped to provide closed movie captioning.  However, because the Department does not have any data on the number of auditoriums exhibiting analog movies that are equipped to provide audio description, the analysis assumes that no auditoriums are equipped to do so.

Unit Costs
As explained above, there is one technology provider (Rear Window®) of captioning technology for auditoriums exhibiting analog movies.³⁴  Unit costs for analog captioning equipment are based on retail prices provided to the Department by manufacturers of captioning equipment via telephone interviews or available on Web sites or brochures.

Similar to auditoriums exhibiting digital movies, auditoriums exhibiting analog movies also require captioning hardware, audio description hardware, captioning devices, and audio description devices to provide closed movie captioning and audio description.  The unit costs for the components of the Rear Window®³⁵ system are presented in Table 6-6.

Table 6-6 : Unit Costs for Rear Window® System for Analog Theaters

Though the unit costs differ, the scoping requirements for movie theaters with auditoriums exhibiting analog movies are nearly identical to those exhibiting digital movies (Section 3.3).  The one exception is that the audio description hardware used in the Rear Window® system requires one unit per auditorium, instead of one unit per movie theater for digital auditoriums in the primary analysis (Section 3.3.2).

Cost Estimation
The cost estimation for auditoriums exhibiting analog movies is presented in Table 6-7.  These cost estimates include the costs of providing closed movie captioning and audio description in auditoriums that exhibit analog movies exclusively.  Overall, the total costs for analog auditoriums are $4.6 million over the 15-year period of analysis when discounted at 7 percent.  The largest expense is for acquiring the Rear Window captioning hardware, which accounts for $2.6 million.  This is because of the high unit cost associated with Rear Window® captioning hardware previously shown in Table 6-6.

Table 6-7 : Total Costs by Cost Category for Auditoriums Exhibiting Analog Movies in Analog Alternative ($ millions)

The total costs of the final rule if auditoriums exhibiting analog movies exclusively are subject to the captioning and audio description requirements are presented in Table 6-8.  The total costs would be $93.1 million over the period of analysis when discounted by 7 percent.  This is a 5 percent increase over the estimated total costs in the primary analysis ($88.5 million).

Table 6-8 : Analog Alternative, Discounted at 7 Percent ($ millions)

Based on public comments and analysis of the most current data, the Department ultimately decided to defer analog auditoriums from coverage of this rule.  As previously discussed, the movie industry continues to undergo significant changes in the production and distribution of movies, resulting in the near elimination of first-run movies in analog film format.  Most movie theaters have converted to digital projection systems to the extent that they are financially able to do so, and as a result, small theaters that still have analog projection systems tend to have fewer financial resources than other movie theaters.  Because very few analog movie theaters remain and there is tremendous uncertainty surrounding the future of analog film with the industry’s digital conversion, the Department rejected the alternative four-year compliance date for analog movie theaters.  Therefore, the Department has deferred until a later date application of the rule’s requirements to movie theater auditoriums exhibiting analog movies exclusively.