INITIAL REGULATORY ASSESSMENT 

AND

INITIAL REGULATORY FLEXIBILITY ANALYSIS

NOTICE OF PROPOSED RULEMAKING 

NONDISCRIMINATION ON THE BASIS OF DISABILITY BY PUBLIC 

ACCOMMODATIONS—MOVIE THEATERS (TITLE III) -

MOVIE CAPTIONING AND AUDIO DESCRIPTION

UNITED STATES DEPARTMENT OF JUSTICE

CIVIL RIGHTS DIVISION

DISABILITY RIGHTS SECTION

10TH & CONSTITUTION AVE., N.W. – NYA AVE. BLDG

WASHINGTON, D.C. 20277

[JULY 11, 2014]
(This page intentionally blank)
Table of Contents

1. NEED FOR REGULATION .............................................................................................................................. 11

2. BACKGROUND............................................................................................................................................. 13

2.1 DIGITAL & ANALOG FILM FORMATS....................................................................................................................13

2.2 CAPTIONING & AUDIO DESCRIPTION TECHNOLOGY................................................................................................15

3. PROPOSED CAPTIONING AND AUDIO DESCRIPTION REQUIREMENTS.......................................................... 17

4. COST ESTIMATION....................................................................................................................................... 19

4.1 METHODOLOGY OVERVIEW ..............................................................................................................................19

4.2 BASELINE.......................................................................................................................................................20

4.3 MOVIE THEATER ESTABLISHMENTS.....................................................................................................................24

4.4 DISTRIBUTION OF DIGITAL AND ANALOG PROJECTION SYSTEMS................................................................................26

4.5 SCOPING .......................................................................................................................................................27

4.6 UNIT COSTS FOR EQUIPMENT ............................................................................................................................28

4.7 REPLACEMENT OF EQUIPMENT OVER FIFTEEN YEAR PERIOD OF ANALYSIS...................................................................32

4.8 OPERATIONS, MAINTENANCE AND TRAINING COSTS ..............................................................................................33

4.9 REPORTING AND RECORDKEEPING REQUIREMENTS ................................................................................................34

4.10 OTHER ASSUMPTIONS......................................................................................................................................35

4.11 TOTAL COSTS .................................................................................................................................................36

5. BENEFITS ..................................................................................................................................................... 44

6. ALTERNATIVES CONSIDERED ....................................................................................................................... 49

7. RESULTS ...................................................................................................................................................... 52

8. SUMMARY OF INITIAL REGULATORY FLEXIBILITY ANALYSIS ........................................................................ 59

8.1 REASON FOR PROPOSED RULE ...........................................................................................................................59

8.2 OBJECTIVE OF PROPOSED RULE..........................................................................................................................60

8.3 SMALL BUSINESS MOVIE THEATERS ....................................................................................................................60

8.4 COSTS OF COMPLIANCE ....................................................................................................................................63

8.5 ALTERNATIVES ................................................................................................................................................66

9. APPENDIX.................................................................................................................................................... 72
iii | Page

Table of Tables

Table ES- 1: Estimated Costs Under Option 1 (2015 Dollars, 15-year Time Horizon)................. 3

Table ES- 2: Estimated Costs under Option 2 (2015 Dollars, 15-year Time Horizon).................. 3

Table ES- 3: Annualized Costs and Benefits of Proposed Rule (2015 Dollars, 15-year Time 

Horizon).......................................................................................................................................... 5

Table ES- 4: Per Digital Theater Initial Capital Costs for Captioning and Audio Description 

Equipment (hardware, software, and devices), 2015 Dollars* ....................................................... 7

Table ES- 5: Per Analog Theater Initial Capital Costs for Captioning and Audio Description 

Equipment (hardware, software, and devices), 2015 Dollars* ....................................................... 8

Table ES- 6: Initial Capital Costs for Small Business Movie Theater Exhibitors, Digital Theaters 

by Revenue Group, 2015 Dollars.................................................................................................. 10

Table ES- 7: Initial Capital Costs for Small Business Movie Theater Exhibitors, Analog Theaters 

by Revenue Group, 2015 Dollars.................................................................................................. 10

Table 8: Baseline Assumptions Regarding Movie Theaters Already Captioning or Audio 

Description Enabled...................................................................................................................... 23

Table 9: Distribution of Assumed Captioning and Audio Description Equipped Theaters under 

Select Baseline Scenarios ............................................................................................................. 24

Table 10: Theater Characteristics by Size Type .......................................................................... 25

Table 11: Estimated Number of Theaters by Type at Rule’s Effective Date, and Annual 

Growth/Decline............................................................................................................................. 26

Table 12: Estimates of Digital and Analog Theaters and Screens in 2015................................... 27

Table 13: Theater Equipment Requirements Based on Scoping and Theater Size...................... 28

Table 14: Digital Captioning Equipment Unit Costs................................................................... 29

Table 15: Analog Captioning Equipment Unit Costs.................................................................. 30

Table 16: Theater Costs, By Size Type, to Purchase Digital Captioning Equipment, 2013 

Dollars*......................................................................................................................................... 31

Table 17: Theater Costs, By Size Type, to Purchase Analog Captioning Equipment, 2013 

Dollars*......................................................................................................................................... 31

Table 18: Captioning and Audio Description Hardware Replacement Schedule........................ 32

Table 19: Captioning and Audio Description Individual Devices Replacement Schedule ......... 32

Table 20: Per Theater Additional Operations and Maintenance Costs*...................................... 34

Table 21: Estimated Costs Under Option 1 (2015 Dollars, 15-year Time Horizon).................... 36
iv | Page

Table 22: Estimated Costs Under Option 2 (2015 Dollars, 15-year Time Horizon).................... 36

Table 23: Estimated Annualized Costs Under Option 1 (2015 Dollars, 15-year Time Horizon) 37

Table 24: Estimated Annualized Costs Under Option 2(2015 Dollars, 15-year Time Horizon).. 37

Table 25: Total Costs Under Option 1, Alternate Baseline Scenarios (Discounted at 7 Percent, 

15-year Time Horizon) ................................................................................................................. 42

Table 26: Per Theater Initial Capital Costs for Digital Theaters * .............................................. 43

Table 27: Per Theater Initial Capital Costs for Analog Theaters *............................................... 43

Table 28: Total Costs Under Option 1 (50% Compliance Requirement) (2015 Dollars, 15-year 

Time Horizon)............................................................................................................................... 51

Table 29: Total Costs Under Option 2 (50% Compliance Requirement) (2015 Dollars, 15-year 

Time Horizon)............................................................................................................................... 51

Table 30: Total Costs (2 Year Compliance Date), (2015 Dollars, 15-year Time Horizon) ...... 52

Table 31: Estimated Costs Under Option 1 (2015 Dollars, 15-year Time Horizon).................... 53

Table 32: Estimated Costs Under Option 2 (2015 Dollars, 15-year Time Horizon).................... 53

Table 33: Annualized Costs and Benefits of Proposed Rule (2015 Dollars, 15-year Time 

Horizon)........................................................................................................................................ 54

Table 34: Total Costs Under Option 1 (5% O&M) (2015 Dollars, 15-year Time Horizon)...... 57

Table 35: Total Costs Under Option 2 (5% O&M) (2015 Dollars, 15-year Time Horizon)........ 57

Table 36: Total Costs Under Option 1 (8% O&M) (2015 Dollars, 15-year Time Horizon)........ 58

Table 37: Total Costs Under Option 2 (8% O&M) (2015 Dollars, 15-year Time Horizon)........ 58

Table 38: Distribution of Movie Theater Firms, by Revenue, 2007............................................ 62

Table 39: Theaters by Type and Estimated Prevalence of Small Businesses............................... 63

Table 40: 2015 Distribution of Theaters (Model Projection) ....................................................... 64

Table 41: Distribution of Theater Size Type for Consolidated Revenue Groups......................... 65

Table 42: Estimation of Costs for Small Digital Movie Theaters, By Firm Size, Based on 2015 

Size/Revenue Distribution ............................................................................................................ 66

Table 43: Estimation of Costs for Small Analog Movie Theaters, By Firm Size, Based on 2015 

Size/Revenue Distribution ............................................................................................................ 66

Table 44: Movie Theater Firms, Establishments and Receipts by Revenue Category, as Percent 

of Totals........................................................................................................................................ 70

Table 45: Unit Costs for Sony Access Glasses System............................................................... 86
v | Page

Table 46: Average Per-Theater First Year Capital Costs, USL/CapitView Average Costs and 

Sony Access Glasses..................................................................................................................... 86

Table 47: Total Captioning Costs over 15 Years, USL/CaptiView versus Sony Access Glasses, 

Discounted at 7 Percent and 3 Percent (2015 Dollars) ................................................................. 87

Table 48: Estimation of Average Establishments per Firm.......................................................... 88

Table 49: Distribution of Theater Size Types by Revenue Category ........................................... 90

Table 50: Average per Establishment Costs of Purchasing Digital Closed Captioning and Audio 

Description Equipment ................................................................................................................. 91

Table 51: Average per Establishment Costs of Purchasing Analog Closed Captioning and Audio 

Description Equipment ................................................................................................................. 91

Table 52: Estimated Average Receipts and Costs per Firm, Digital and Analog......................... 92

Table 53: Dataset Differences in Number of Establishments....................................................... 93

Table 54: Dataset Differences in Average Receipts per Firm ...................................................... 94

Table of Figures

Figure ES- 1: Annual Costs of Rule Under Option 1, Discounted at 7 Percent ............................. 6

Figure ES- 2: Annual Costs of Rule Under Option 2, Discounted at 7 Percent ............................. 6

Figure 3: Annual Costs of Rule Under Option 1 (Discounted at 7 Percent)................................ 38

Figure 4: Annual Costs of Rule Under Option 2 (Discounted at 7 Percent)................................. 39

Figure 5: Total Costs of Rule Under Option 1 (Discounted at 7 Percent, 15-year Time Horizon)

....................................................................................................................................................... 40

Figure 6: Total Costs of Rule Under Option 2 (Discounted at 7 Percent, 15-year Tine Horizon) 41
1 | Page

Executive Summary

The Department of Justice (“Department”) has prepared this Initial Regulatory 

Assessment (“Initial RA”) to assess the costs and benefits of its Notice of Proposed Rulemaking 

concerning movie captioning and audio description (“DOJ Movie NPRM”). This proposed rule, 

which is being issued in order to amend the Department’s existing title III ADA regulation, is 

proposing to explicitly require movie theaters to exhibit movies with closed captioning and audio 

description at all times and for all showings whenever movies are produced, distributed, or 

otherwise made available with captioning and audio description unless to do so would result in 

an undue burden or fundamental alteration. The Department is also proposing to explicitly 

require movie theaters to have a certain number of closed captioning devices and audio 

description listening devices unless to do so would result in an undue burden or fundamental 

alteration. The Department is proposing a six month compliance date for digital movie screens 

and is seeking public comment on two options for analog screens: Option 1, a four-year 

compliance date for analog movie screens, or Option 2, a deferral of rulemaking on analog 

screens until a later date. 

The proposed regulation explicitly addresses equity and fairness considerations as 

provided under the Americans with Disabilities Act (ADA). Foremost among the expected 

benefits from the proposed regulation is the ability of a greater number of individuals who are 

deaf or hard of hearing or are blind or have low vision to better understand what is being said 

and shown at movie theaters so that they may fully and equally participate in the movie-going 

experience to the same extent as those without these disabilities. While some theaters do provide 

captioning and audio description to their patrons, many do not, creating a barrier for persons with 

disabilities to take part in the social and cultural movie-going experience. 

The Initial RA provides estimates of the total cost of the rule under Option 1 (a six-month 

compliance date for digital screens and a four-year compliance date for analog screens) and 

Option 2 (a six-month compliance date for digital screens and a deferral of new regulatory 

requirements on analog screens) over a 15-year time horizon. Both options include the same 

requirements for digital screens. Under Option 1, we estimate that the cost of the rule will range 

from $177.8 million to $225.9 million when using a 7 percent discount rate, and from $219.0 

million to $275.7 million when using a 3 percent discount rate. Under Option 2, we estimate that 

the costs of the rule will range from $138.1 million to $186.2 million when using a 7 percent 

discount rate, and from $169.3 million to $226.0 million when using a 3 percent discount rate. 

As seen in Table ES- 1, the range of cost estimates for both options depends on the assumptions 

used regarding the extent to which theaters are or will soon be providing closed movie 

captioning and audio description as proposed in this rule, but independent of this rulemaking. 

This Initial RA estimates costs using three different baselines due to a lack of information

regarding the extent to which theaters are already providing captioning and audio description as 
2 | Page

proposed in this rule (see Section 4.2 for details). Under each baseline, the Department assumes

that no theaters (digital or analog) are audio description enabled (see Table 8 in section 4.2

(Baseline) for greater detail). Under Option 1, each baseline assumes that 2 percent of analog 

theaters currently meet the requirements of this proposed rule. Under Option 2, the baselines do 

not make assumptions about analog screens because the rule would defer requirements on such 

screens to a future rulemaking.

• Baseline 1 (One Screen Per-Theater) – This baseline assumes that on average, every 

movie theater with digital screens has one screen that is captioning enabled (based on 

an assumption of at least some compliance with the existing ADA requirements that 

public accommodations provide effective communication to persons with hearing and 

vision disabilities). This assumption leads to an estimate of about 13 percent

•

of all 

digital screens having captioning capabilities. For Option 1, this baseline also 

assumes that 2 percent of analog screens are captioning enabled.

Baseline 2 (Litigation-Based) – This baseline is derived from available data regarding 

movie theater companies that are now providing captioning and that have been 

involved in recent litigation challenging their failure to comply with existing ADA 

effective communication requirements. This baseline assumes that 42 percent

•

of 

digital screens are captioning enabled. For Option 1, this baseline also assumes that 2 

percent of analog screens are captioning enabled.

Baseline 3 (2013 NATO Survey-Based) – This baseline uses data provided in 

testimony by officials from the National Association of Theater Owners (NATO) 

before Congress in May 2013, which stated that 53 percent 

Costs are estimated over a 15-year period, beginning with the year in which the rule 

becomes effective (assumed to be 2015) (Table ES-1 and Table ES-2). For both options, costs 

are estimated for theaters with digital screens beginning in the first year after publication of the 

final rule (2015). For Option 1, costs are estimated for theaters with analog screens beginning in 

the fourth year after publication of the final rule (2018).

of digital screens were 

already captioning enabled. For Option 1, this baselines also assumes that 2 percent 

of analog screens are captioning enabled.

The estimated costs primarily consist of the following: (1) the purchase of hardware 

and/or software to send captions to individual captioning devices; (2) the purchase of individual 

captioning devices as per the scoping requirements specified in the rule; (3) periodic costs to 

replace hardware, software, and devices; (4) annual operations and maintenance costs to cover 

storage, management, staff training, and other recurring costs; (5) any additional hardware costs 

to transmit audio description to individual audio description listening devices; and (6) any 

additional costs associated with the purchase of individual audio description listening devices. 

The costs do not include the costs to theaters to convert their screens from analog to digital, 

because this rule does not require any movie theater to convert to digital, and doing so it is not 

necessary to comply with the proposed requirements.
3 | Page

Table ES- 1: Estimated Costs Under Option 1 (2015 Dollars, 15-year Time Horizon)

Discount Rate

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

Under Baseline 1 

Assumptions - One 

Screen Per-Theater

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

7% $225.9 $191.9 $177.8

3% $275.7 $235.6 $219.0

Table ES- 2: Estimated Costs under Option 2 (2015 Dollars, 15-year Time Horizon)

Discount Rate

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

Under Baseline 1 

Assumptions - One 

Screen Per-Theater

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

7% $186.2 $152.2 $138.1

3% $226.0 $186.0 $169.3

Under Option 1, the estimated annualized costs of the proposed regulation under each of 

the three baseline scenarios range from $19.5 million to $24.8 million when using a 7 percent 

discount rate, and from $18.3 million to $23.1 million under a 3 percent discount rate. Under 

Option 2, the estimated annualized costs of the proposed regulation under each of the three 

baseline scenarios range from $15.2 million to $20.4 million under a 7 percent discount rate, and

from $14.2 million to $18.9 million under a 3 percent discount rate (see Table ES- 3.

1

The benefits of this rule are difficult to quantify for multiple reasons, including the 

following: (1) the Department has not been able to locate robust data on the rate at which persons 

with disabilities currently go to movies shown in movie theaters, (2) the fact that the number of 

persons with disabilities who will newly go to movies will change, (3) the number of persons 

with disabilities who will go to movies more often will change, (4) the number of persons who 

will go to the movies as part of a larger group that includes a person with a disability will 

change, and (5) the number of persons with disabilities who would have gone to the movies 

anyway, but under the rule will have a fuller and more pleasant experience will also change—all 

).

 

1 Annualized costs were calculated in a Microsoft Excel model using the PMT function (-PMT(discount rate, years 

of analysis, present value of total costs)). 
4 | Page

of which will change by an unknown amount. In addition, the Department is not aware of any 

peer reviewed academic or professional studies that monetize or quantify the societal benefit of

providing closed captioning and audio description at movie theaters.

In 2012, the per capita annual movie attendance rate in the U.S. and Canada was 4.1, with 

moviegoers paying on average $7.96 per ticket.2

Though the Department cannot confidently estimate the likely number of people who 

would directly benefit from this proposed rule, we have reviewed data on the number of people 

with hearing or vision disabilities in the United States. The Census Bureau estimates that 3.3 

percent of the U.S. population has difficulty seeing, which translates into a little more than eight 

million individuals in 2010, and a little more than two million of those had “severe” difficulty 

seeing.

 Data on movie-going patterns of persons who 

are deaf or hard of hearing or are blind or have low vision is very limited, making estimations of 

demand very difficult. However, numerous public comments suggest that many persons who are 

deaf or hard of hearing or are blind or have low vision do not go to the movies at all, or attend 

movies well below the average per capita rate of 4.1 admissions annually, because of the lack of 

auxiliary aids and services that would allow them to understand the movie. 

3

Of perhaps greater significance to the discussion of the benefits of this rule, however, are 

issues relating to fairness, equity, and equal access, all of which are extremely difficult to 

monetize, and the Department has not been able to robustly quantify and place a dollar value on 

those benefits. Regardless, the Department believes the non-quantifiable benefits justify the 

costs of requiring captioning and audio description at movie theaters nationwide. 

 At the same time, the Census Bureau estimates that 3.1 percent of people had difficulty 

hearing, which was a little more than 7.5 million individuals in 2010, and approximately one 

million of them having “severe” difficulty hearing. However, for a variety of reasons not all of 

these people would benefit from this proposed rule (see Section 5, Benefits, for more details). In 

addition, there are others who can be considered indirect beneficiaries of the rule, such as those 

who would benefit from accompanying a person who is deaf or hard of hearing or is blind or has 

low vision to a movie showing, (e.g., a child who can enjoy and discuss a movie with his or her

parent with a hearing disability) (see Section 5, Benefits, for more details).

 

2 See Motion Picture Association of America, Theatrical Market Statistics (2012), available at 

http://www.mpaa.org/wp-content/uploads/2014/03/2012-Theatrical-Market-Statistics-Report.pdf (last visited July 

10, 2014).

3 The Census defines difficulty seeing as “experiencing blindness or having difficulty seeing words or letters in 

ordinary newsprint even when normally wearing glasses or contact lenses.” It defines difficulty hearing as 

“experiencing deafness or having difficulty hearing a normal conversation, even when wearing a hearing aid “ See

U.S. Census Bureau, U.S. Department of Commerce, P70-131, Americans with Disabilities: 2010 Household 

Economic Studies at 8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited July 10, 

2014).
5 | Page

Table ES- 3: Annualized Costs and Benefits of Proposed Rule (2015 Dollars, 15-year Time 

Horizon)

7% Discount Rate 3% Discount Rate

Baseline 1 

Assumptions 

(One Screen 

Per-Theater)

Baseline 2 

Assumptions 

(LitigationBased)

Baseline 3 

Assumptions 

(NATO 

Survey 

Based)

Baseline 1 

Assumptions 

(One Screen 

Per-Theater)

Baseline 2 

Assumptions 

(LitigationBased)

Baseline 3 

Assumptions 

(NATO 

Survey 

Based)

Costs

(million $)

Option 1 – Four Year Compliance for Analog Screens

$24.8 $21.1 $19.5 $23.1 $19.7 $18.3 

Option 2 – Deferred Rulemaking for Analog Screens

$20.4 $16.7 $15.2 $18.9 $15.6 $14.2 

Benefits

The proposed rule would address the discriminatory effects of communication 

barriers at movie theaters encountered by individuals who are deaf or hard of 

hearing or are blind or have low vision. By ensuring that movie theaters screen 

those movies that are produced and distributed with the necessary auxiliary aids 

and services—captioning and audio description—and that theaters provide the 

individual devices needed to deliver these services to patrons with these particular 

disabilities, this rule would afford such individuals an equal opportunity to attend 

movies and follow both the audio and visual aspects of movies exhibited at movie 

theaters. Although the Department is unable to monetize or quantify the benefits 

of this proposed rule, it would have important benefits. For example, it would 

provide people with hearing and vision disabilities better access to the movie 

viewing experience enjoyed by others; it would allow such persons to attend and 

enjoy movies with their family members and acquaintances; it would allow people 

with hearing or vision disabilities to participate in conversations about movies with 

family members and acquaintances; and it would promote other hard to quantify 

benefits recognized in Executive Order 13563 such as equity, human dignity, and 

fairness.

The Initial RA shows that estimated annual costs for this proposed rule will not exceed 

$100 million in any year under any of three baseline scenarios, irrespective of which option the 

Department selects for analog screens. Annual costs for each year during the 15-year expected 

term of the proposed regulation are depicted in Figure ES-1 for Option 1 and Figure ES-2 for 

Option 2.
6 | Page

Figure ES- 1: Annual Costs of Rule Under Option 1, Discounted at 7 Percent

Figure ES- 2: Annual Costs of Rule Under Option 2, Discounted at 7 Percent

Because movie theater complexes vary greatly by number of screens, which significantly 

impacts overall costs per facility, the analysis breaks the movie exhibition industry into four 

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Dollars (2015) Millions

One Screen Per Theater

Litigation Based

NATO Survey-Based

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Dollars (2015) Millions

One Screen Per Theater - No Analog

Litigation-Based - No Analog

NATO Survey-Based - No Analog
7 | Page

theater types based on size—Megaplexes (16+ screens), Multiplexes (8-15 screens), Miniplexes 

(2-7 screens), and Single Screen Theaters—and by digital or analog system. Per-facility costs 

were then calculated for each theater type. The largest costs per-year for any single movie 

theater would occur in the first year due to the purchase of necessary equipment. The average 

capital cost in the first year for digital Megaplex theaters is estimated to total $38,547, while the 

average capital cost in the first year for digital single screen theaters is estimated to total $3,198

(Table ES- 4).

Table ES- 4: Per Digital Theater Initial Capital Costs for Captioning and Audio 

Description Equipment (hardware, software, and devices), 2015 Dollars*

Digital Theater Type/Size

Per Theater Initial 

Capital Costs

(Using Doremi 

Technology for Movies 

in Digital Format)

Per Theater Initial 

Capital Costs

(Using USL

Technology for Movies 

in Digital Format)

Average Initial 

Capital Costs for 

Digital Theater

(Average of Different 

Technology)

Megaplex $40,540 $36,554 $38,547

Multiplex $27,880 $25,798 $26,839

Miniplex $10,920 $10,252 $10,586

Single Screen $3,285 $3,111 $3,198

Note: These initial capital costs include the costs to purchase and install: (1) captioning hardware and/or software (one 

per screen); (2) individual devices for captioning (ranging from 4 for Single Screens to 34 for Megaplexes); (3) 

additional hardware, if needed, to transmit audio description (from none to one device per screen); and (4) additional 

audio description listening devices (ranging from 2 for Single Screens to 18 for Megaplexes). 

*Because unit costs for captioning and audio description equipment have either remained steady or declined between 2010 

and 2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to 

be published. 

Should the Department proceed under Option 1 and cover analog screens in the final rule,

though with a four-year compliance date, per theater costs for analog theaters would be higher 

than those for digital theaters for each type/size.

4

Table ES- 5

 The first year per-theater capital costs for 

analog single screen theaters, which are measured in year four, would total a little more than 

$8,172 ( ). The first year per-theater capital costs for digital single screen theaters, 

which are measured in year one, would average $3,198 (Table ES-4).

 

4

 The Department’s analysis assumes that the screens in movie theaters are either exclusively analog or exclusively 

digital.
8 | Page

Table ES- 5: Per Analog Theater Initial Capital Costs for Captioning and Audio 

Description Equipment (hardware, software, and devices), 2015 Dollars*

Analog Theater Type/Size Per Theater Initial Capital Costs

(Rear Window Technology for Analog Films)

Megaplex** NA

Multiplex** NA

Miniplex $31,884

Single Screen $8,172

Note: These first year costs include (1) the costs to purchase and install: captioning hardware and/or software (one 

per screen); (2) individual devices for captioning (ranging from 4 for Single Screens to 12 for Miniplexes); (3) 

additional hardware, if needed, to transmit audio description (from none to one device per screen); and (4) additional 

audio description listening devices (ranging from 2 for Single Screens to 4 for Miniplexes).

*Because unit costs for captioning and audio description equipment have either remained steady or declined between 2010 

and 2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to 

be published. 

**Note that the RA assumes that all Megaplexes and Multiplexes have transitioned to digital projection systems by the 

time this rule goes into effect.

In keeping with the Regulatory Flexibility Act (“RFA”), the Initial RA examines the 

economic impact of the proposed rule on small businesses in the movie exhibition industry. 

Small businesses comprise the vast majority of firms in this industry. The current size standard 

for a small movie theater business is $35.5 million dollars in annual revenue; in 2007, the latest 

year for which detailed breakouts by industry and annual revenue are available, approximately 

98 percent of movie theater firms met the standard for small business and these firms managed 

approximately 53 percent of movie theater establishments.5

As part of this regulatory analysis, the Department has conducted an Initial Regulatory 

Flexibility Analysis (“IRFA”) on the economic impact of this rule on small business. The IRFA 

has been used by the Department to help determine whether small businesses would be 

disproportionately burdened. In addition, the Department has used the IRFA to examine other 

ways, if possible, to accomplish the Department’s goals with fewer burdens on small businesses.

The Department considered multiple alternatives, including a more stringent one that would 

require analog theaters to be compliant within two years of the publication of the final rule; this 

alternative was rejected because of concerns about the burden on small movie theaters. Based on 

its assessment, and as previously discussed, the Department has decided to seek public comment

on two options with respect to analog screens: a four-year compliance date for analog screens 

(Option 1), or deferral of new regulatory requirements for analog screens (Option 2).

 Therefore, this proposed rule will 

have a significant economic impact on a substantial number of small entities.

 

5

 The size standard of $35.5 million can be found in Table of Small Business Size Standards Matched to North 

American Industry Classification System Codes. U. S. Small Business Administration. July 22, 2013. 
9 | Page

As part of a larger movement within the film producing industry, nearly all film 

production is moving to digital. Industry estimates predict the production of movies using 

analog film will cease by 2014 and that by the end of 2015, analog film will no longer exist in 

theaters, with a few rare exceptions.6

The IRFA estimates the average initial capital costs per-firm for firms that display digital 

or analog movies under Option 1, and for firms that display digital movies under Option 2. The 

average costs for small firms (which have a proportionately higher number of Single Screens and 

Miniplexes) are estimated to be between approximately 0.7 percent to 2.1 percent of their 

average annual receipts for firms with digital theaters, and between approximately 2.0 percent to 

5.7 percent of average annual receipts for firms with analog theaters (

 Thus, by 2015, most movie exhibition places will have 

converted to the digital format. Because of the cost of transitioning to digital, most of the larger

firms have already been able to convert or are planning to do so soon. Therefore, any remaining 

analog theaters are more likely to be small businesses. At the same time, per screen costs of 

captioning equipment are significantly higher for analog theaters than for digital theaters. 

Table ES- 6 and Table ES7).

 

6 See “Theater Official Optimistic Despite Attendance Slump,” available at 

http://www.reviewjournal.com/business/theater-official-optimistic-despite-attendance-slump (last visited July 10, 

2014). Similarly, at the Spring 2013 CinemaCon industry convention, an industry analyst stated that by the end of 

2015, analog film will no longer exist in cinemas, and it is likely that production of analog film in the United States 

will cease by the end of 2013. See “Local Theaters Face Tough Times as 35 mm Faces Extinction,” available at 

http://www.sungazette.com/page/content.detail/id/594504/Local-Theaters-Face-Tough-Times-as-35-mm-facesextinction.html?nav=5016 (last visited July 10, 2014).
10 | Page

Table ES- 6: Initial Capital Costs for Small Business Movie Theater Exhibitors, Digital 

Theaters by Revenue Group, 2015 Dollars

Cost Firms $499,999 

and under

Firms $500,000 

to $4,999,999

Firms $5,000,000 to 

$35,500,000**

Average receipts per firm* $188,384 to $201,973 $1,471,549 to 

$1,484,995

$9,705,377 to 

$12,437,259

Average cost per theater* $3,198 to $3,966 $10,063 to $10,586 $13,984 to $17,281

Average cost per firm* $3,233 to $3,992 $12,539 to $14,454 $81,176 to $103,309

Ratio of average cost/receipts* 1.6% to 2.1% 0.8% to 1.0% 0.7% to 1.1%

Table ES- 7: Initial Capital Costs for Small Business Movie Theater Exhibitors, Analog 

Theaters by Revenue Group, 2015 Dollars

Cost Firms $499,999 and 

under

Firms $500,000 

to $4,999,999

Firms $5,000,000 to 

$35,500,000**

Average receipts per firm* $188,384 to $201,973 $1,471,549 to 

$1,484,995

$9,705,377 to 

$12,437,259

Average cost per theater* $8,172 to $10,638 $30,204 to $31,884 $43,449 to $54,673

Average cost per firm* $8,263 to $10,706 $37,638 to $43,534 $252,224 to $326,844

Ratio of average cost/receipts* 4.1% to 5.7% 2.5% to 3.0% 2.0% to 3.4%

* The ranges represent the figures calculated using the two datasets created from data from the 2007 Economic 

Census, which breaks out data by revenue category (downloaded from SBA’s Web site and the Census Bureau’s 

American FactFinder Web site, respectively), but which differ slightly. Note that the composition of theater size 

types also varies per revenue group depending on the dataset used, and therefore the average cost per theater 

varies as well.

** Note that the calculations for this category using the dataset downloaded from the SBA Web site do not include 

any data for the two firms in the revenue category for firms with sales/receipts/revenue of $30,000,000-

$34,999,999because no data on annual receipts for those two firms was included. The dataset downloaded from 

American FactFinder had different revenue categories from those downloaded from SBA’s Web site. To estimate 

those firms meeting the SBA size standards using the dataset downloaded from the American FactFinder Web site, 

all the firms with revenues less than $25 million, and half of those with revenues from $25,000,000 to $49,999,999

were counted as a way of estimating the number of entities that fall under $35.5 million within that revenue 

category.

Note: These first year costs include (1) the costs to purchase and install: captioning hardware and/or software 

(one per screen); (2) individual devices for captioning (ranging from 4 for Single Screens to 34 for Megaplexes); 

(3) additional hardware, if needed, to transmit audio description (from none to one device per screen); and (4) 

additional audio description listening devices (ranging from 2 for Single Screens to 18 for Megaplexes). Because

unit costs for captioning and audio description equipment have either remained steady or declined between 2010 

and 2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is 

expected to be published. 
11 | Page

1. Need for Regulation

Title III of the Americans with Disabilities Act (ADA) contains broad language prohibiting 

public accommodations and commercial facilities—including movie theaters—from 

discriminating against individuals with disabilities. The Department’s title III regulation 

implementing title III’s auxiliary aid provision reiterates the obligation of covered entities to 

ensure effective communication with individuals with disabilities and identifies, among other 

things, open captioning, closed captioning, and audio recordings as examples of auxiliary aids 

and services. 28 CFR 36.303(a)-(c). Recent technological changes in the movie theater 

industry—including wide-spread conversion from analog (film) projection to digital cinema 

systems—make exhibition of captioned and audio-described movies easier and less costly than 

ever before. In addition, at this time nearly all first run motion pictures released by the major 

domestic movie studios include closed captioning (and to a lesser extent, audio description).

Going to the movies is a quintessential American experience. In any given month, over 56 

million adults (roughly 26 percent of the adult population) make a trip to a movie theater to take 

in a movie.7

 Movies are a part of our shared cultural experience, “water cooler” talk, and the 

subject of lunch-time conversations. The Supreme Court observed over 60 years ago that motion 

pictures “are a significant medium for the communication of ideas” and “may affect public 

attitudes and behavior in a variety of ways, ranging from direct espousal of a political or social 

doctrine to subtle shaping of thought which characterizes all artistic expression. The importance 

of motion pictures as an organ of public opinion is not lessened by the fact that they are designed 

to entertain as well as to inform.”8

Until recent technological developments, the only captioning methodologies available 

required that the captions be directly displayed on the film, and thus visible to all patrons in an 

auditorium, to which movie theaters and some patrons without disabilities objected. Current 

technology allows for closed captioning, which, in the context of movies, consists of captions 

that are visible only to those who use a special device and not the rest of the theater. This 

advancement in technology, coupled with the recent conversion to digital cinema, have made 

exhibition of captioned and audio-described movies easier and less costly. 

 When individuals who are deaf or hard of hearing or are 

blind or have low vision have the opportunity to attend movies that they can actually understand 

because of the availability of captions or audio description, they are exposed to new ideas and 

gain knowledge that contributes to the development of their communication and literacy. 

 

7 See Experian Marketing Services, 2010 American Movie-Goer Consumer Report, available at 

http://www.experian.com/blogs/marketing-forward/2010/02/20/2010-american-movie-goer-consumer-report (last 

visited July 10, 2014).

8 Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495, 501 (1952). 
12 | Page

While there has been an increase in the number of movie theaters exhibiting movies with 

closed captions (and, to a much lesser extent, audio description) due in large part to successful 

disability rights litigation brought by private plaintiffs during the past few years, the availability 

of movies exhibited with closed captions and audio description varies significantly across the 

U.S. depending upon locality and movie theater ownership. The ADA requirements for effective 

communication apply to all public accommodations (including movie theaters) in every 

jurisdiction in the U.S and should be consistently applied using a uniform ADA standard. The 

right to access movies exhibited with closed captioning and audio description should not depend 

on whether the person with a disability resides in a jurisdiction where movie theaters, subject to a 

consent decree or settlement, exhibit movies with closed captioning and/or audio description. 

And, even in jurisdictions where theaters exhibit movies with captioning and audio description, 

many do not make captioning and audio description available at all movie showings. Thus, some 

persons who are deaf, hard of hearing, blind, or have low vision, still cannot fully take part in 

movie-going outings with family or friends, join in social conversations about recent movie 

releases, or otherwise participate in a meaningful way in an important aspect of American 

culture. 

The Department received numerous comments from individuals who are deaf or hard of 

hearing or are blind or have low vision in response to its 2010 Advance Notice of Proposed 

Rulemaking on Movie Captioning and Video Description in Movie Theaters, (2010 ANPRM), 

75 FR 43467, (July 26, 2010), describing how they were unable to take part in the movie-going 

experience with their friends and family because of the unavailability of captioning or audio 

description. Many individuals felt that this not only affected their ability to socialize and fully 

take part in family outings, but also deprived them of the opportunity to meaningfully engage in 

the discourse that often surrounds movie attendance. 

The Department is convinced that regulation is warranted at this time in order to achieve the 

goals and promise of the ADA and is proposing to explicitly require movie theaters to exhibit 

movies with closed captioning and audio description at all times and for all showings whenever 

movies are produced, distributed, or otherwise made available with captioning and audio 

description unless to do so would result in an undue burden or fundamental alteration.
13 | Page

2. Background

2.1 Digital & Analog Film Formats

Currently, there are two formats used by movie theaters in the United States to exhibit 

movies: digital and analog technologies.9 The older format—analog technology—uses reels of 

film and a traditional film projector to show movies.10

The newer digital cinema format, on the other hand, does not rely on film to exhibit 

movies. Instead, digital movies are captured as a series of electronic files in a standardized 

format (typically referred to as the “digital cinema package” or “DCP”) and are exhibited by 

movie theaters using a digital server and digital projector. Current digital cinema technology 

typically requires one digital server and one projector (or a combined server/projector) for each 

screen. Digital movies are delivered to movie theaters either physically by delivery of a storage 

medium (such as high-resolution DVDs, hard drives, or flash drives) or electronically via the 

Internet, fiber-optic cable, or satellite network.

Five to six reels of film are used for a 

typical feature-length analog movie. These reels of film must be physically delivered to each 

movie theater. 

Digital cinema has several advantages relative to analog film. For movie studios and 

distributors, digital cinema’s biggest calling card is its substantially lower distribution costs due 

to not having to “print” and distribute large reels of analog film to movie theaters nationwide. 

For movie theaters, the advantages of digital cinema include (1) images that do not degrade over 

time like analog film; (2) the ability to screen “alternate content” such as live concerts or 

sporting events; (3) greater flexibility in scheduling movies within auditoriums or at different 

times based on audience demand; and (4) enhanced revenue opportunities by, for example, 

exhibiting premium content such as digital 3D movies. Some movie aficionados debate quality 

and other differences, but digital cinema’s advantages to the movie production industry are 

significant.

Digital cinema systems are also, however, quite expensive for movie exhibitors. Costs 

range from about $70,000 - $100,000 per screen.

11

 

9 As used in both the proposed rule and this Initial RA, the term “movie theater” refers to facilities used primarily 

for the purpose of showing movies to the public for a fee. By contrast, the term “auditorium” (or “screen”) refers to 

the individual room(s) within a movie theater used to exhibit a movie. 

 As a result, while some “early adopter” 

10 Analog films do have a digital component, as the sound portion of an analog film is generally provided digitally 

via optical/digital tracks recorded on the film or burned onto separate CD-ROMs.

11 See Susman, Gary, “How Digital Conversion Is Killing Independent Movie Theaters”, Rolling Stone, September 

4, 2013, available at http://www.rollingstone.com/movies/news/how-digital-conversion-is-killing-independentmovie-theaters-20130904#ixzz2fGz9PrQX (last visited July 10, 2014); Burr, Ty, “Digital projection threatens some 
14 | Page

movie theaters have had digital cinema systems since the mid-2000s, wide-spread conversion of 

domestic movie theaters to digital cinema did not commence until at least 2008. Several factors 

have helped spur broader growth of digital cinema systems since 2008, including: (1) industrywide consensus on standardized file formats and secure delivery systems for DCPs; (2) 

agreements on financing vehicles for digital cinema systems, including subsidized leases by 

digital cinema vendors or manufacturers, formation of equipment buying consortiums, or 

payment of negotiated “virtual print fees” (“VPF”) by studios to movie theaters for each digital 

movie; and (3) the wide-spread popularity of digital 3D and IMAX films, which typically 

increase both attendance and revenue for movie theaters.12

Currently, the U.S. movie theater industry is in the midst of accelerated conversion to

digital cinema. In May 2013, the head of National Association of Theater Owners (NATO) 

testified before Congress that “[a]pproximately 88% of the nation’s movie screens now use 

digital projection.”

 

13 Meanwhile, fewer movies are now available on analog film to the point 

where in 2011, the head of the Motion Picture Association of America (MPAA) was reported to 

have predicted that analog film would disappear in less than three years.

14

 

community theaters,” Boston Globe, January 27, 2013, available at 

www.bostonglobe.com/arts/movies/2013/01/27/digital-format-brings-closure-small-town-movietheaters/MGVHWeNISBWp02Wc8wbhLL/story.html (last visited July 10, 2014).

12 The value of such financing vehicles for digital conversion can be quite significant. Indeed, for some movie 

theater chains, third-party financing is covering (or has covered) nearly the entire cost of leasing and installing 

digital servers and projectors throughout their respective movie theaters. For example, in a 2010 SEC filing by the 

Regal Entertainment Group, Regal stated that “the costs of implementing digital projection in our theatres will be 

substantially funded” by outside financing sources such as collection of VPFs from movie studios. See Regal 

Entertainment Group 10-K Annual Report 12 (filed March 1, 2010) (available at http://www.faqs.org/secfilings/100301/REGAL-ENTERTAINMENT-GROUP_10-K/ (last visited July 10, 2014). In this annual report, 

Regal also goes on to note: “We will bear operating and maintenance costs with respect to digital projection 

systems, which we expect to be relatively comparable to what we currently spend on our conventional [analog] film 

projectors.” Id. 

13 See Testimony of John Fithian, President and CEO of the National Association of Theater Owners, Before the 

U.S. Senate Committee on Health, Education, Labor and Pension (May 14, 2013), available at 

http://www.help.senate.gov/imo/media/doc/Fithian.pdf (last visited, July 10, 2014).

14 See “Theater Official Optimistic Despite Attendance Slump,” available at 

http://www.reviewjournal.com/business/theater-official-optimistic-despite-attendance-slump (last visited, July 10, 

2014). Similarly, at the Spring 2013 CinemaCon industry convention, an industry analyst stated by the end of 2015, 

analog film will no longer exist in cinemas, and it is likely that production of analog film in the United States will 

end by the end of 2013. See “Local Theaters Face Tough Times as 35 mm Faces Extinction,” available at 

http://www.sungazette.com/page/content.detail/id/594504/Local-Theaters-Face-Tough-Times-as-35-mm-facesextinction.html?nav=5016 (last visited July 10, 2014).
15 | Page

2.2 Captioning & Audio Description Technology

Since the advent of captioning and audio description, movie studios (or movie 

distributors)—rather than movie theaters—have determined which movies will be captioned or 

audio-described and have underwritten the production of movies with these accessibility 

features. The movie studios (or movie distributors) then, in turn, distribute these captioned 

and/or audio-described movies to movie theaters without charge for these features. According to 

comments from the MPAA on the Department’s 2010 ANPRM, nearly all “wide-release” movies 

currently released by its member studios include captioning and about two-thirds of such movies 

include audio description.15

Turning to the exhibition side of the movie industry, technologies for movie theaters to

show movies with captioning and audio description vary depending on whether the movie is 

being screened in an analog or digital format. For analog movies, the choices for captioning and 

audio description equipment are limited. Until the mid-1990s, the only way to caption a movie 

was to actually “burn” captions on the film. When the analog film was screened, such “open 

captions” were then visible to the entire movie audience much like sub-titles on foreign films. In 

1995, however, WGBH in Boston began marketing a new system for exhibiting “closed 

captioned” movies that was called the Rear Window® closed captioning system (“RWC”). 

Unlike older “open caption” technology, the proprietary RWC system neither altered the actual 

film nor rendered captions visible to the entire movie audience. Instead, this system used several 

components—including a multi-channel digital media player, CD-ROMs, and LED panels 

mounted on the back wall of an auditorium—to generate “closed captions” (i.e., captions that are 

only visible to patrons using specialized captioning display devices at their seats). A related 

proprietary system—called DVS-Theatrical® (“DVS”)—enables provision of audio description 

for analog movies. Together, RWC and DVS are referred to as the MoPix® system. Due largely

to the movie theater industry’s commitment to digital conversion, MoPix® remains the only 

 

 

15 Commenters on the Department’s 2010 ANPRM had advised the Department that at that time, only about 1% of 

movies exhibited in movie theaters were being shown with captions or audio description. Since that time, there has 

been a significant increase in the number of movie theaters that have the capacity to show movies with closed 

captioning and/or audio description and an increase in the times those movies are shown each week, in large part 

due to litigation against movie theater companies for failure to provide captioning and audio description. In May 

2013, an industry representative estimated that at least 53 percent of digital movie screens had the capacity to show 

movies with closed movie captions or audio description. See Testimony of John Fithian, President and CEO of the 

National Association of Theater Owners, before the U.S. Senate Committee on Health, Education, Labor and 

Pension (May 14, 2013), available at , http://www.help.senate.gov/imo/media/doc/Fithian.pdf (last visited, July 10, 

2014).
16 | Page

commercially-available system for exhibition of analog movies with closed captions and audio 

description.16

For digital cinema systems, there are more choices for captioning technologies. 

Exhibiting open captions for a digital film entails no additional equipment or costs for movie 

theaters. Digital cinema systems allow any movie to be shown with open captioning—at the

movie theater’s discretion—simply by selecting the captioning file (generally referred to as the 

“HI” file) from the DCP on the appropriate digital server (assuming, of course, that the DCP 

provided by the movie studio or distributor included an open caption file). For closed 

captioning, all digital systems require one or more pieces of “hardware” (e.g., server-based 

thumb drive or wall-mounted FM/IR panel) that essentially act as an electronic “conduit” for the 

captioning signal between the digital server and the individual captioning display “devices” used 

by patrons at their seats. With a cost of a little over $3,000 to outfit an average-sized movie 

auditorium with digital captioning equipment (see discussion in Section 

 

4.6), the capital costs for 

such captioning equipment are nominal relative to the costs for digital cinema systems.

Currently, there are four different closed caption technologies for digital cinema systems 

available on the commercial market—the Rear Window® system; the CaptiViewTM system by 

Doremi Cinema, LLC; Ultra Stereo Labs (USL), Inc.’s closed caption infrared system; and 

Sony’s Entertainment Access Glasses and Audio Description receivers.17

 

16 Over the past few years, there has not been an increase use of the MoPix® system, as most theaters that are 

acquiring captioning and audio description technologies are digital theaters, and they are choosing the newer 

technologies. In addition, WGBH no longer charges a licensing fee for its MoPix® system. 

The Department 

understands that about 300 RWC systems are currently installed at U.S. movie theaters 

17 Each of these vendors’ closed captioning products relies on slightly different types of equipment. (Pursuant to 

the performance-based standards in the proposed rule, any type of closed-captioning technology is compliant so long 

as the individual end-user can effectively see and read the captions.) The Rear Window® captioning system works 

the same way for both digital and analog cinema systems—that is, closed captions result from: (1) the media player 

sending the captioning signal electronically to an LED display mounted high on a wall at the rear of the movie 

auditorium; and (2) a small, clear (acrylic) seat-mounted reflective device displaying the captions to an individual 

patron. See, “Motion Picture Access Frequently Asked Questions” available at, 

http://ncam.wgbh.org/mopix/faq.html#rearwindow (discussing RWC system) (last visited July 10, 2014) “Doremi’s 

CaptiViewTM system, on the other hand, uses a server-based thumb drive emitter to send the captioning signal 

wirelessly to an OLED display device with a bendable (“gooseneck”) support arm that rests in a seat’s cup holder. 

See “CaptiView Brochure” available at http://www.doremilabs.com/support/cinema-support/cinemabrochures/captiview-brochures/ (last visited July 10, 2014). For USL’s captioning system, the captioning signal is 

sent by either a wall-mounted IR panel or projection room-based Wi-Fi unit to a seat-mounted LED display device. 

In addition, USL has just started marketing its “eyewear/glasses” personal display devices. Sony’s glasses, the 

newest of the technologies on the market, are similar to USL’s glasses. The glasses work by projecting holographic 

captions in front of the movie patron’s eyes in a way that looks like the letters are floating in the air. Only the person 

wearing the glasses is able to see the text.
17 | Page

nationwide; research by the Department also suggests that as of March 2013, about 9,750

Doremi CaptiViewTM systems have been installed domestically. Sony’s glasses are a recent 

entrant to the market, first available in 2012. Because Sony’s glasses are a very new and 

expensive product in a market when other less expensive and more established options are 

available (including cheaper glasses), they are not included in the main estimation; preliminary 

cost estimates using Sony glasses are presented in the Appendix for informational purposes. 

For audio description, the technologies involved are neither complex nor expensive. For 

movie theaters using analog systems, audio description is delivered by DVS or MoPix® systems 

using the theaters’ existing sound system. For movie theaters with digital cinema systems, 

provision of audio-described movies generally requires no additional equipment; theaters may 

make use of their existing digital servers and sound systems. To exhibit an audio-described 

digital movie, a digital theater need only select the audio description file (generally referred to as 

the “VI-N” file) from the DCP on the appropriate digital server and play the movie. The audio 

description signal for that movie then will be transmitted to receivers/headsets worn by 

individual patrons via the theater’s existing FM or Infrared-based assistive listening system 

(“ALS”) using additional devices. 

3. Proposed Captioning and Audio Description Requirements

In the DOJ Movie NPRM, the Department is proposing to provide specific regulatory 

requirements regarding how movie theaters should meet their effective communication 

obligations through the exhibition of closed-captioned and audio-described movies. The 

proposed rule states that a movie theater owner or operator is required to exhibit movies with 

closed captioning and/or audio description for all screenings so long as the movie has been 

produced by the movie studio or distributor with captioning or audio description. The proposed 

rule imposes no independent obligation on movie theaters to provide captions and audio 

description if the movie is not available with these features. The obligations that are imposed by

the proposed rule are mitigated should a movie theater owner or operator establish that exhibition 

of closed-captioned or audio-described movies would result in an undue burden or fundamental 

alteration. 

The proposed rule for captioning and audio description rests on the existing obligation of 

title III-covered facilities—such as movie theaters—to ensure that persons with disabilities 

receive “full and equal enjoyment” of their respective goods and services, including, as needed, 

the provision of auxiliary aids and services for persons with sensory disabilities.18

 

18 See Department’s Movie NPRM §§ III.B; see also 42 U.S.C. §§ 12182(a) (prohibiting public accommodations

from disability-based discrimination in the “full and equal enjoyment” of goods and services), 12182(b)(2)(A)(iii) 

(requiring public accommodations to take affirmative steps as necessary “to ensure that no individual with a 

disability is excluded, denied services, segregated or otherwise treated differently * * * because of the absence of 

 
18 | Page

The Department’s proposed rule sets forth several discrete regulatory requirements. 

First, the Department is proposing to require movie theaters’ digital screens to comply with the 

requirements to exhibit movies with closed captioning and audio-description for all screenings of 

movies available with these features within 6 months from the date of the publication of the final 

rule in the Federal Register. 

Second, the Department is seeking public comment on two options for movie theaters’

analog screens: 

• Option 1: Require that as of four years from the final rule’s publication date in the 

Federal Register, movie theaters’ analog screens exhibit movies with closed captions and 

audio-description, for all screenings of movies available with these features. 

• Option 2: Defer rulemaking on analog screens until a later date.

Third, the NPRM proposes to require movie theaters to have a certain number of 

individual captioning devices capable of delivering the captions at the seat of the individual, and 

to provide them to patrons upon request. The proposed numbers are based upon the number of 

seats in the movie theater itself and can be shared among the screens in the theater. 

Fourth, the NPRM proposes to require movie theaters to have a certain number of 

devices capable of delivering audio description and to provide them to patrons upon request.

The NPRM recognizes that the assistive listening devices used for audio amplification that are 

currently required by the 2010 ADA standards often contain an extra channel, and therefore can 

also be used to deliver audio description. The NPRM proposes minimal scoping for audio 

description listening devices, and also permits movie theaters that have two channel devices for 

assistive listening to use those devices for audio description in lieu of purchasing additional 

devices. 

Fifth, the NPRM proposes to require that movie theaters ensure that their staff has the 

capability to operate the equipment to show captions and audio description and to show patrons 

how to use individual devices. 

Finally, the NPRM proposes that movie theaters provide the public with notice about the 

availability of captions and audio description when it provides notice to the public regarding 

screenings and showing times of these movies. 

 

auxiliary aids and services” absent a showing of a fundamental alteration or undue burden by such accommodation); 

28 CFR § 36.303(c) (existing DOJ regulatory requirements for effective communication).
19 | Page

As with other effective communication obligations under the ADA, covered entities do 

not have to comply with these requirements to the extent that they constitute an undue burden or 

fundamental alteration. 

4. Cost Estimation

4.1 Methodology Overview

This section outlines the overall cost estimation approach under both proposed options, 

while details (including sources) are presented in the sections that follow.

In the industry’s early days, movies were shown primarily in establishments that had a 

single auditorium with a single screen; in recent years a single establishment can have more than 

a dozen screens, all showing movies at the same time. Because movie theater complexes vary 

greatly by the number of screens, and the overall cost of this rule varies in direct relation to the 

number of screens, this RA breaks the movie exhibition industry into four theater types based on 

size—Megaplexes (16+ screens), Multiplexes (8-15 screens), Miniplexes (2-7 screens), and 

Single Screen Theaters. Per-facility costs were then calculated for each theater type, based on 

research-based assumptions regarding the average number of screens and auditorium size by type 

(Megaplexes, Multiplexes, Miniplexes, or Single Screen).

Because costs vary significantly between digital and analog captioning equipment, the 

RA uses estimates of the current total number of theaters in the U.S., recent estimates of the 

percent of screens that are digital, and the average number of screens per theater by type to 

determine the portion of theaters by each of the four types that are digital or analog. The vast 

majority of theaters now project digitally, and analog theaters are likely to be either single screen 

or Miniplex theaters (see the discussion in Section 4.2 for detail).

The theater type characteristics are used to estimate the captioning and audio description 

equipment that would be needed, which includes hardware and software, plus the appropriate 

number of personal devices based on the scoping requirements. These element counts are the 

building blocks of the cost estimates for an average theater of each of the four types.

The RA uses a 15-year timeframe for the cost analysis, which is a timeframe similar to 

that used in the Regulatory Impact Analysis of the Final Revised Regulations Implementing 

Titles II and III of the ADA (Sept. 15, 2010). This timeframe is the Department’s current best 

estimate of the impact of this current rule before it is replaced by a revised regulation. Because 

the 15 year timeframe for this rule exceeds the expected life of captioning equipment, the 

analysis incorporates a rolling “replacement schedule” whereby this equipment is assumed to 

require replacement over a span of several years based on its expected useful life (see Section 

4.7). 

The analysis also accounts for growth (or contraction) over time in the movie theater 

exhibition industry by theater size type (Megaplexes, Multiplexes, Miniplexes, or Single Screen). 
20 | Page

The four different types have very different average costs, due to their differences in size, as well 

as differences in growth/contraction rates. 

An annual cost factor is also added, as a percentage of capital costs per theater, to account 

for operations and maintenance (O&M) and recurring training costs for the provision of the 

captioning and audio description services. The rule also requires that when movie theaters 

publish movie listings in newspapers or other publication formats to inform patrons of show 

times or locations, that such communications also indicate which screenings will be captioned or 

audio-described. However, the additional cost of noting which screenings will be captioned or 

have audio description is expected to be de minimus when a theater is already preparing a 

communication listing movie titles and screening times.

Total annual costs for each theater type represent the sum of the following costs, as 

applicable: (1) unit costs for captioning equipment (hardware/software and required individual 

devices) for existing and new digital screens; (2) unit costs for audio description equipment 

(hardware, if any, and required individual devices) for existing and new digital screens; (3) unit 

costs for captioning equipment (hardware/software and required individual devices) for existing 

analog screens; (4) unit costs for audio description equipment (hardware, if any, and required 

individual devices) for existing analog screens; and (5) the cost of replacing equipment under the 

“replacement schedule”; and (6) O&M costs.

These total costs are then measured against a baseline, which represents the Department’s 

best assessment of the state of the industry, including the availability of closed captioning and 

audio description, if the rule were not to be implemented. In this way, the resulting net costs 

appropriately reflect the incremental economic impact of the proposed rule. There is a certain 

degree of uncertainty regarding the extent to which movie theaters would be offering captioning 

and audio description if the Department were not undertaking this rulemaking process. 

Therefore, costs have been estimated against three different baseline scenarios, as detailed in 

Section 4.2.

Using this approach, annual costs are calculated for each of the 15 “regulatory years” 

and, within each of these years, separately for each of the three baseline scenarios. Annual cost 

totals for each year are presented as “rolled-up” costs for all theater types at both 3 percent and 7

percent discount rates, discounted to 2015. Additionally, the Initial RA also assesses annualized 

costs for all theater types collectively.

4.2 Baseline

As noted above, despite the existing obligation to provide effective communication to 

movie patrons who are deaf or hard of hearing or blind or have low vision, and the increasing 

availability of movies produced with captions and audio description, until recently, few movie 

theaters actually provided these auxiliary aids and services. The Department recognizes that this 

has begun to change. The industry as a whole is seeing an increasing number of theaters with 

closed captioning and audio description capabilities. The industry trade association, NATO, 
21 | Page

surveyed its membership in early 2013 and, based on the responses of two-thirds of those 

surveyed, estimated that at least 53 percent of digital screens in the nation have closed captioning 

capabilities.19

At least one large theater chain executive has made statements to the Department 

indicating that its efforts to equip all of its digital theaters with captioning and audio description 

equipment were voluntary.20

The assumption used for the current rate at which theaters have or soon will be providing

closed movie captioning and audio description as proposed in this rule, but independent of this 

particular rulemaking, has a significant impact on the analysis. Given the uncertainty 

surrounding this assumption and the significant impact it has on the estimation of costs, the RA 

has estimated costs against three different estimations of the baseline. Under each baseline, the

Department assumes that no theaters (digital or analog) are audio description enabled. Under 

Option 1, each baseline assumes that 2 percent of analog theaters currently meet the 

requirements of this proposed rule. Under Option 2, the baselines do not make assumptions 

about analog screens because the rule would defer requirements on such screens to future 

rulemaking. 

Meanwhile, several recent court cases have resulted in decisions 

and/or settlements that are resulting in theater owners providing closed captioning and audio 

description, independent of any Department actions (see NPRM for further details).

• Baseline 1 (One Screen Per-Theater) – This baseline takes a minimum approach of 

assuming that every movie theater with digital screens has at least one screen—and 

only one screen—that is captioning enabled, based on an assumption of some level of 

compliance with the existing longstanding ADA requirements that public 

accommodations provide effective communication to persons with hearing and vision 

disabilities. This assumption leads to about 13 percent

Specifically, this baseline assumes only one screen per theater complex will have 

captioning capabilities for digital Megaplexes, Multiplexes, Miniplexes, and Single 

Screen theaters. For Option 1, this baseline also assumes that 2 percent of analog 

screens are captioning enabled. Each screen with captioning capabilities is assumed 

to have the necessary software/hardware as well as the number of devices that would 

be needed to meet the proposed rule’s scoping standards for a single screen. 

of all digital screens having 

captioning capabilities. 

 

19 See Testimony of John Fithian, President and CEO of the National Association of Theater Owners, Before the 

U.S. Senate Committee on Health, Education, Labor and Pension (May 14, 2013), available at, 

http://www.help.senate.gov/imo/media/doc/Fithian.pdf (last visited July 10, 2014).

20Meeting in Washington, D.C. between Department staff and representatives of the National Association of Theater 

Owners (NATO) on September 26, 2011.
22 | Page

• Baseline 2 (Litigation-based) – This baseline is derived using available data 

regarding movie theater companies that are now providing captioning and that have 

been involved in recent litigation challenging their failure to comply with existing 

ADA effective communication requirements. After being involved in litigation, 

Regal, AMC, Cinemark, Harkins, and National Amusements have committed to 

providing or have already provided captioning and audio description at all their 

digital screens. Using 2010 NATO data detailing how many screens are owned by 

each of these exhibitors, this assumption leads to an estimate that 42 percent

•

of digital 

screens are captioning enabled. For Option 1, this baseline also assumes that 2 

percent of analog screens are captioning enabled.

Baseline 3 (2013 NATO Survey-based) – This baseline uses data provided in 

testimony by officials from NATO before Congress in May 2013, which stated that

53 percent of digital screens were already captioning enabled. For Option 1, this 

baseline also assumes that 2 percent of analog screens are captioning enabled.

Table 8 below provides a visual representation of these baselines. 
23 | Page

Table 8: Baseline Assumptions Regarding Movie Theaters Already Captioning or Audio 

Description Enabled

Baseline Digital Theaters 

Captioning

Digital Theaters 

Audio Description

Analog Theaters 

Captioning

Analog Theaters 

Audio Description

Baseline 1

1 screen per digital 

theater fully 

captioning enabled

0% of digital theaters 

have necessary 

hardware or devices

2% of analog 

theaters already 

fully captioning 

enabled 

0% of analog 

theaters have 

necessary 

hardware or 

devices

Baseline 2

42% of digital screens 

are captioning 

enabled. 

Of those theaters* with 

captioning enabled 

screens:

• 50% have all 

necessary 

hardware and 

devices.

• 50% have the 

necessary 

hardware but only 

half of the required 

devices.

0% of digital theaters 

have necessary 

hardware or devices

2% of analog 

theaters already 

fully captioning 

enabled

0% of analog 

theaters have 

necessary 

hardware or 

devices

Baseline 3

53% digital screens are 

captioning enabled. 

Of those theaters* with 

captioning enabled 

screens: 

• 50% have all 

necessary 

hardware and 

devices.

• 50% have the 

necessary 

hardware but only 

half of the required 

devices.

0% of digital theaters 

have necessary 

hardware or devices

2% of analog 

theaters already 

fully captioning 

enabled

0% of analog 

theaters have 

necessary 

hardware or 

devices

*First, the percentage of screens that are captioning enabled was allocated by theater size (applied primarily to 

Megaplex and Multiplex screens). Then the number of theaters needing hardware and the number needing devices 

were calculated for each theater size (Megaplex, Multiplex, Miniplex, and Single Screen).

Detail on the distribution of these captioning enabled theaters by type is not known, so 

several general assumptions or approaches were used across all the baseline scenarios, as 

applicable. These include: 
24 | Page

o In the Litigation-based and NATO Survey-based baseline scenarios, the 

assumptions regarding screens already captioning enabled refer to digital screens

o Litigation-based and NATO Survey-based baseline scenarios were applied 

primarily to Megaplex and Multiplex theaters, because those are the largest theater 

types and are assumed to all be digital. 

only. In addition, the RA assumes that only half of the theaters included in that 

percentage possess all the required number of devices; the other half possessed the 

required hardware but only half of the required devices. 

Table 9 below details how those 

distributions are applied to theaters by size type.

Table 9: Distribution of Assumed Captioning and Audio Description Equipped Theaters 

under Select Baseline Scenarios

Theater Type Litigation Baseline

(42.4% of all Digital Theaters)

2013 NATO Survey Baseline 

(53% of all Digital Theaters)

Megaplex All (100%) Megaplexes (all digital) All (100%) Megaplexes (all 

digital)

Multiplex Nearly one fourth (23%) of Digital 

Multiplexes

Nearly one half (44%) of Digital 

Multiplexes

Miniplex No Miniplexes No Miniplexes

Single Screen No Single Screens No Single Screens

4.3 Movie Theater Establishments 

Because the proposed rule for movie captioning and audio description imposes 

requirements that vary depending on the size of the movie theater (e.g., number of screens and 

total seat count), the analysis breaks out the movie theater exhibition industry by theater size. 

The MPAA’s “Theatrical Market Statistics – 2009” presents statistics from 2007 to 2009 

showing the break-down of movie theaters by four theater “types” in the United States: 

Megaplexes (16+ screens); Multiplexes (8-15 screens); Miniplexes (2 – 7 screens); and Single 

Screen Theaters.21

However, data on total or average seat counts for these four theater types was not found. 

Therefore, assumptions were made by Department subject matter experts (based on MPAA 

statistics and independent research) regarding screen and seat counts in the “average” theater for 

 

 

21 The later editions of Theatrical Market Statistics break out the industry using only two categories, so the 

distributions in the 2009 edition were used and brought forward to 2015.
25 | Page

each of the four theater types. The following assumptions are used for the “average” theater for 

each type: 

Table 10: Theater Characteristics by Size Type

Theater Type

Average 

Number of 

Screens

Average Seat 

Count per Screen

Average Number 

of Seats per 

Theater

Megaplex – 16+ screens 18 175 3,150

Multiplex – 8-15 screens 11 180 1,980

Miniplex – 2-7 screens 4 150 600

Single Screen – 1 screen 1 175 175

Source: Department of Justice Subject Matter Expert Review of MPAA data

To bring the estimates of the number of theaters forward from 2009 to 2015, average 

growth/contraction rates were applied to each type. Recent data on growth and decline of 

theaters by size is only available for two size categories: 1-7 screens per theater establishment

and 8+ screens per theater establishment. Growth/contraction rates were calculated for the 

period 2008-2012 and applied as follows: an increase of 2.0 percent (calculated for theaters with 

8+ screens) to Megaplexes and Multiplexes and a decline of 4.2 percent (calculated for theaters 

1-7 screens) to Miniplexes, and single screens theaters.22

Table 11

 These growth/contraction rates were 

applied throughout the 15 years of the rule’s expected impact, to account for new theater 

construction as well as annual theater closures for Miniplexes and Single Screen Theaters. The 

RA thus estimates that as of the rule’s effective date, there will be 718 Megaplexes, 1,893

Multiplexes, 1,500 Miniplexes, and 966 Single Screen Theaters ( ).

 

22 Rates calculated based on data from MPAA’s Theatrical Market Statistics – 2012.
26 | Page

Table 11: Estimated Number of Theaters by Type at Rule’s Effective Date, and Annual 

Growth/Decline

Theater Type Projected Number 

of Theaters in 2015

Annual 

Growth Rate

Projected Number 

of Screens in 2015

Megaplex – 16+ screens 718 2.0% 12,924

Multiplex – 8-15 screens 1,893 2.0% 20,823

Miniplex – 2-7 screens 1,500 -4.2% 6,000

Single Screen – 1 screen 996 -4.2% 996

TOTAL 5,107 --- 40,743

Source: Estimated using data for 2008-2012 as in MPAA’s Theatrical Market Statistics – 2012.

Although data is available on the total number of screens in the U.S., it is not broken 

down by theater type. The total number of theaters of each type was multiplied by the average 

number of screens, to reach the total number of screens in the U.S. 

4.4 Distribution of Digital and Analog Projection Systems

Because screens with digital projection have a different compliance date and significantly 

different costs than analog screens, the analysis under Option 1 must estimate the number and 

proportion (by theater type) of movie theaters that use digital projection systems on the projected 

effective date of the final rule (2015), and the number and percentage that remain analog. The 

cost model estimates costs for digital and analog theaters separately for multiple reasons, 

including the fact that larger theaters are more likely to have digital systems and are more likely 

to increase in number over time, while theaters that still have analog screens are more likely to 

be Single Screen or Miniplex establishments, which are contracting in number.

As discussed in testimony before Congress in May 2013, NATO estimates that 88 percent 

of screens in the nation now have digital projection.23

 

23 See Testimony of John Fithian, President and CEO of the National Association of Theater Owners, Before the 

U.S. Senate Committee on Health, Education, Labor and Pension (May 14, 2013), available at, 

http://www.help.senate.gov/imo/media/doc/Fithian.pdf (last visited July 10, 2014). 

Since larger establishments are more 

likely to have made the transfer to digital technology, the model distributes the proportion of 

digital screens starting with Megaplexes and Multiplexes first, and the remainder to Miniplexes 

and Single Screens. Since Megaplexes and Multiplexes accounted for approximately 82 percent 

of all screens, all of those types were assumed to have transitioned to digital; the remaining 6 

percent of U.S. screens that are digital are distributed among the Miniplexes and Single Screen 

theaters. Based on the foregoing table, the cost model assumes the following with respect to the 

number of digital screens/theaters as of the effective date of the proposed rule:
27 | Page

Table 12: Estimates of Digital and Analog Theaters and Screens in 2015

Number of 

Digital 

Theaters

Number of 

Digital Screens

Number of 

Analog 

Theaters

Number of 

Analog

Screens

Megaplex – 16+ screens 718 12,924 0 0

Multiplex – 8-15 screens 1,893 20,823 0 0

Miniplex – 2-7 screens 452 1,807 1,048 4,192

Single Screen – 1 screen 300 300 696 696

TOTAL 3,363 35,854 1,744 4,888

4.5 Scoping 

Once the number of theaters has been established, as well as the portion that are analog 

and the portion that are digital, the next step is to establish the amount of equipment, by type, 

that will be needed by the average theater for each size group/type.

For captioning equipment available on the U.S. commercial market—irrespective of 

whether a theater is using an analog or digital cinema system—two separate types of equipment 

are required: (1) one or more pieces of “hardware” (such as a wall-mounted LED panel, wallmounted IR emitter, a server-based thumb drive, and/or a media player that serves as an interface 

between an analog projector and the Rear Window® captioning system) that transmit the 

captioning signal/text to its associated end-use device; and (2) individual captioning devices 

(such as cup-holder mounted clear reflector screens or LED display units) that display the closed 

captions to individual movie patrons while seated in their seats or on specially designed 

eyewear/glasses. Generally speaking, one piece of “hardware” (e.g., thumb drive, LED display, 

or IR emitter panel) is needed for each screen/auditorium exhibiting a closed-captioned movie. 

By contrast, for individual captioning devices, the proposed rule sets scoping requirements based 

not on screen counts, but, instead, on the total number of seats in the entire movie theater. Thus, 

for most (if not all) movie theaters, fewer individual pieces of captioning hardware will be 

needed per-facility than individual captioning devices. Consequently, because captioning 

hardware and devices are unlikely to be needed in exactly the same numbers at any given theater, 

the Initial RA separately assesses costs for captioning hardware and individual captioning 

devices. 

The Department has determined the following equipment needs, based on the proposed 

rule’s scoping and the assumed average theater characteristics for both captioning and audio 

description capabilities (Table 13).
28 | Page

Table 13: Theater Equipment Requirements Based on Scoping and Theater Size

Equipment

Megaplex

Avg: 18 

Screens

Multiplex

Avg: 11 

Screens

Miniplex

Avg: 4 

Screens

Single 

Screen

Captioning Hardware Needed 18 11 4 1

Captioning Devices Needed 34 28 12 4

Audio Hardware Needed 18 11 4 1

Audio Devices Needed 18 11 4 2

4.6 Unit Costs for Equipment

Once the required equipment pieces were estimated for each theater type, they could be 

multiplied by their individual unit costs. For captioning equipment used with digital cinema 

systems, unit costs are based on retail prices (and any associated installation costs) provided to 

the Department by manufacturers of captioning equipment via telephone interviews or available 

on Web sites or brochures.

24

 

24 The unit cost estimates used in the Initial RA for digital captioning equipment (as well as analog captioning 

equipment) may be considered relatively conservative for several reasons. First, the cost trend for captioning 

equipment has been toward lower costs over the course of the last decade as technologies and manufacturing 

methods advance. Thus, it is expected that, in future years, costs for captioning equipment will be lower than the 

range of unit costs used in the Initial RA. Second, analog-to-digital cinema conversions by movie theaters that 

currently have analog (RWC) captioning equipment—as noted by several commenters—will likely lead to a lively 

secondary market for such equipment. Third, it is anticipated that the proposed rule will foster innovation (and 

lower costs) in the market for captioning equipment due to the proposed rule’s requirements (and, therefore, 

increased demand for captioning and audio description equipment). 

These costs are generally lower for digital equipment than unit cost 

information provided in response to the 2010 ANPRM, but not appreciably different for analog 

equipment.
29 | Page

Multiple companies sell digital closed captioning equipment and theaters have the freedom 

to choose which technology best fits their needs. Because of this, the analysis makes estimates 

based on price quotes from multiple sellers and averages the costs of the dominant technologies. 

Digital closed captioning equipment is available from the Rear Window® system;25

Table 13

the 

CaptiViewTM system by Doremi Cinema, LLC; and Ultra Stereo Labs (USL), Inc.’s closed 

caption infrared system. The unit costs for the single required hardware (and any accompanying 

software update) needed per screen to transmit the captions and the costs for a single individual 

receiving device (of which multiple are required per screen, see for estimated number 

of devices per theater) are listed in Table 14 below:

Table 14: Digital Captioning Equipment Unit Costs

* USL technology can be used with two different devices (a cup-holder held viewer and glasses). This figure is an 

average of the two (cup-holder viewer and glasses, $443 and $514, respectively). In addition, USL captioning 

hardware can be used for audio description – therefore there are no additional hardware costs.

Unit costs for analog captioning equipment are similarly based on retail prices (and any 

associated installation costs) provided to the Department by manufacturers of captioning 

equipment via telephone interviews or available on Web sites or brochures. Unlike digital 

captioning equipment, 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 captions to moviegoers on individual captioning devices (Table 

15).

 

25 Rear Window’s digital captioning system is built-up from the platform developed for its analog equipment and is 

substantially higher in cost than the systems provided by Doremi’s CaptiView and USL. Due to the substantially 

higher cost of Rear Window for digital cinemas, it is not included in the cost analysis, as there are several products 

of lower cost, and it is assumed theater owners will attempt to minimize their cost. Furthermore, WGBH has 

indicated that there has been no new demand for its Rear Window system, further bolstering the assumption that 

theaters with digital screens are not choosing this product. 

Technology

Digital 

Captioning

(one needed 

per screen)

Hardware Cost

Digital 

Captioning

(multiple per 

screen/theater

may be needed)

Individual 

Device Costs

Digital Audio 

Description

(one needed 

per screen)

Hardware 

Cost

Digital Audio 

Description

(multiple per 

screen/theater

may be needed)

Individual 

Device Costs

Doremi’s CaptiView $690 $430 $625 $125

USL* $1,057 $479 $0 $69
30 | Page

Table 15: Analog Captioning Equipment Unit Costs

Using these unit costs, the average, incremental cost of purchasing the necessary 

equipment to transmit digital captions is estimated to be approximately $38,547 for a Megaplex 

theater, $26,839 for a Multiplex, $10,586 for a Miniplex and $3,198 for a Single Screen theater

(Table 16). These costs are estimated based on paying full retail prices and do not incorporate 

any possible discount pricing or subsidies. These costs also do not incorporate any of the costs of 

transitioning from analog to digital projection systems. The proposed rule does not require that a 

theater transition to digital projection.

 

26 The hardware required for Rear Window technology includes an LED display necessary to show captions in each 

analog projection auditorium, a Datasat/DTS XD20 interface, and individual Reflectors that are used by patrons. 

The cost for the LED display ranges from $2,850 to $3,975, depending on whether it is a 2 or 3 line display (a 2 line 

display is recommended); the LED display cost used in Regulatory Analysis is an average of the cost of the two 

sizes of display. The Datasat/DTS XD20 interface, which is an interface connecting the Rear Window LED display 

to the theater system, costs about $4,200 per auditorium. The only device for individual use is the Rear Window 

Reflector, which fits into cup holders and costs $95 each. (Note: all these prices are taken from the “Rear Window® 

Captioning (RWC) Components Cost Overview” released by Median Access Group at WGBH August 2010, and 

adjusted for the fact that licensing fees are no longer required.) For audio description, the William Sound Audio 

System is compatible with analog captioning systems and was used to estimate video description equipment costs 

for analog systems. The William Sound Audio System requires an audio transmitter for each auditorium, which 

costs $467. Patrons may use a receiver and a headset, which cost $88 and $18, respectively.

Technology

Analog 

Captioning

(one per screen

needed)

Hardware Cost

Analog 

Captioning

(multiple per 

screen/theater

may be needed)

Device Costs

Analog Audio 

Description

Hardware Cost

(one per screen

needed)

Analog Audio 

Description

Device Costs

(multiple per 

screen/theater

may be needed)

Rear Window26 $7,113 $95 $467 $106
31 | Page

Table 16: Theater Costs, By Size Type, to Purchase Digital Captioning Equipment, 2013 

Dollars*

Cost Per Digital Theater** Doremi’s 

CaptiView USL Average 

Megaplex – 16+ screens $40,540 $36,554 $38,547

Multiplex – 8-15 screens $27,880 $25,798 $26,839

Miniplex – 2-7 screens $10,920 $10,252 $10,586

Single Screen – 1 screen $3,285 $3,111 $3,198

Note: These costs include the costs to purchase and install: (1) captioning hardware and/or software (one per screen); (2) 

individual devices for captioning (ranging from 4 for Single Screens to 34 for Megaplexes); (3) additional hardware, if needed, 

to transmit audio description (from none to one device per screen); and (4) additional audio description listening devices

(ranging from 2 for Single Screens to 18 for Megaplexes). 

*Because unit costs for captioning and audio description equipment have either remained steady or declined between 2010 and 

2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to be 

published.

**These costs are based on the average theater characteristics presented in Table 2 regarding the average number of screens 

and seats. 

The per-theater costs for Miniplexes and Single Screens using analog systems are notably 

higher. (Note: As discussed in Section 4.4 above, the RA assumes that all Megaplexes and 

Multiplexes have transitioned to digital projection systems). Using the unit costs for Rear 

Window’s analog closed captioning technology, the average, incremental cost of purchasing the 

necessary equipment to transmit captions is estimated to be approximately $31,884 for a 

Miniplex and $8,172 for a Single Screen theater (Table 17). Again, the costs are estimated based 

on paying full retail prices and do not incorporate any possible discount pricing or subsidies.

Table 17: Theater Costs, By Size Type, to Purchase Analog Captioning Equipment, 2013 

Dollars*

Cost Per Analog Theater Rear Window

Megaplex – 16+ screens ** NA

Multiplex – 8-15 screens ** NA

Miniplex – 2-7 screens $31,884

Single Screen – 1 screen $8,172

Note: These costs include the costs to purchase and install: (1) captioning hardware and/or software (one per screen); (2) 

individual devices for captioning (ranging from 4 for Single Screens to 12 for Miniplexes); (3) additional hardware, if needed, 

to transmit audio description (from none to one device per screen); and (4) additional devices for audio description (ranging

from 2 for Single Screens to 4 for Miniplexes).

*Because unit costs for captioning and audio description equipment have either remained steady or declined between 2010 and 

2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to be 

published. 

**Note that the RA assumes that all Megaplexes and Multiplexes have transitioned to digital projection systems.
32 | Page

4.7 Replacement of Equipment over Fifteen Year Period of Analysis

Given the assumed 15-year term of the proposed rule, movie captioning and audio 

description equipment will require replacement one or more times during this period. Public 

comments to the 2010 ANPRM, as well as information provided by manufacturers of captioning 

equipment, suggest that captioning hardware is expected to last about 10 years, while captioning 

and audio description listening devices are likely to last four to seven years before requiring 

replacement. The Initial RA thus incorporates a “replacement schedule” for captioning hardware 

and devices into the cost model, which assumes that all captioning hardware will be replaced 9-

11 years after initial installment, and all captioning devices will need replacement after four to 

seven years of use.

Moreover, within these respective replacement schedules for captioning hardware and 

devices, it is likely that more equipment will need replacement near the mid-point of the 

replacement timeframe (as opposed to “earlier” or “later” years). The Initial RA's cost model 

thus employs the following weighted percentages in the respective rolling replacement schedules 

for captioning and audio description hardware (Table 18) and devices (Table 19):

Table 18: Captioning and Audio Description Hardware Replacement Schedule

Year After Purchase Percent of All Hardware Needing Replacement

Hardware Replacement -- 9th Year 15%

Hardware Replacement --10th Year 70%

Hardware Replacement --11th Year 15%

Table 19: Captioning and Audio Description Individual Devices Replacement Schedule

Year After Purchase Percent of All Hardware Needing Replacement

Device Replacement -- 4th year 15%

Device Replacement -- 5th year 35%

Device Replacement -- 6th year 35%

Device Replacement -- 7th year 15%

In practice, these replacement schedules for captioning hardware and devices mean that, 

in any given regulatory year after the fourth year, some proportion of captioning equipment is 

being replaced. Which captioning hardware and devices are being replaced in any particular

year (and for which movie theaters) simply follows a consistent pattern depending on the year in 

which the equipment was originally installed/placed in service.27

 

27 For example, in regulatory “Year 10,” the replacement schedules for equipment contemplates a mix of 

replacement costs, with some costs incurred from “replacement of replacement” captioning devices (i.e., devices 
33 | Page

Note that Miniplex and Single Screen theaters have negative growth rates—i.e.,

declines—in contrast to the positive growth rates experienced by Megaplex and Multiplex

theaters. Going forward, the ratio of theaters at the time of replacement was applied to account 

for theaters that may have closed since purchasing the hardware and devices and have no need 

for replacements.

4.8 Operations, Maintenance and Training Costs

Information provided by captioning equipment vendors and other industry sources 

suggests that operation and maintenance (“O&M”) costs for captioning equipment will be 

relatively modest. Captioning hardware, which is typically mounted high on a wall in a movie 

auditorium (or otherwise placed in the projection booth), is unlikely to be tampered with, or 

accidently broken by, movie patrons or theater staff. Captioning devices, on the other hand, are 

more prone to potential wear and tear by virtue of their use by individual movie patrons. Thus, it 

is expected that captioning devices will require occasional cleaning or minor maintenance by 

theater staff. Captioning equipment companies also noted that repair of such equipment is rare. 

For the most part, if captioning equipment breaks down, the answer is replacement rather than 

repair. (Such replacement costs are covered by the replacement schedule for captioning 

equipment discussed above). Repair costs for captioning equipment are thus expected to be de 

minimus.

The rule will require that at least one person at the theater be able to provide patrons with 

closed captioning devices and audio description listening devices and direct patrons on the 

equipment’s use. This requirement can most easily be met by expanding the training for those 

persons who will already be required to be on-site to manage or oversee overall operations 

and/or the start of the exhibition of the movies. In addition, staff is already required by theaters 

to distribute assistive listening devices when requested by patrons, and direct patrons on the use 

of those devices. It is reasonable to assume that the same staff member would provide assistance 

with the closed captioning devices and audio description listening devices as well. A separate 

staff with ADA expertise is not required. The costs of this part of the rule will include any 

additional training time and any time spent providing and collecting devices and demonstrating 

their use, if needed.

 

which replaced devices initially put into service in “Year 1” but that have outlived their useful lives), replacement of 

original devices (which were in their 4th – 7th years of service), and replacement of original hardware. 

Specifically, for “Year 10,” the cost model calculates replacement costs for digital captioning equipment (assuming 

the same unit cost as the original equipment) based on the following formula:

Replacement Costs “Year 10” = [Cost of Digital Devices Replaced in “Year 5” x .35] + [Cost of Digital 

Devices Replaced in “Year 6” x .15] + [Cost of Digital Devices Installed in “Year 3” x .15] + [Cost of 

Digital Devices Installed in “Year 4” x .35] + [Cost of Digital Devices Installed in “Year 5” x .35] + [Cost 

of Digital Devices Installed in “Year 6” x .15] + [Cost of Digital Hardware Installed in “Year 1” x .15].
34 | Page

The Initial RA uses a value equivalent to 3 percent of all the captioning and audio 

descriptive equipment owned by the theater to capture the afore-discussed minimal operations 

and maintenance cost and incremental increase to staff time, costs of adding information that 

captioning or audio description is available when preparing communications regarding movie 

offerings, and other potential increases in administrative costs. These costs are annual. This 3

percent is a factor commonly used in construction and equipment maintenance (see the 

Regulatory Impact Analysis of the Final Revised Regulations Implementing Titles II and III of 

the ADA (Sept. 15, 2010)). 

In dollar terms, operations, maintenance, and training costs for analog theaters are 

estimated on an annual basis to average from a low of $245 for Single Screens to a high of $957 

for Miniplexes; for digital theaters’ operations, maintenance and training costs are estimated to 

average from a low of $96 for Single Screens to a high of $1,156 for Megaplexes (Table 20). 

Table 20: Per Theater Additional Operations and Maintenance Costs*

Digital Theater 

Type/Size

Average First 

Year Initial 

Capital for 

Digital Theater

Average O&M 

costs – 3% of 

Capital costs

Average First 

Year Initial 

Capital for 

Analog Theater

Average O&M 

costs – 3% of 

Capital costs

Megaplex $38,547 $1,156 NA** NA**

Multiplex $26,839 $805 NA** NA**

Miniplex $10,586 $318 $31,884 $957

Single Screen $3,198 $96 $8,172 $245

*Since unit costs for captioning and audio description equipment have either remained steady or declined between 2010 and 

2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to be 

published. 

**Note that the RA assumes that all Megaplexes and Multiplexes have transitioned to digital projection systems.

The Department is presenting these estimates for operations, maintenance, and training 

and seeking public comment. 

4.9 Reporting and Recordkeeping Requirements

The rule does not propose any additional reporting of recordkeeping by covered entities to 

be available or submitted to Federal agencies.
35 | Page

4.10 Other Assumptions 

In addition to all the unit costs, theater characteristics, and other inputs specified with 

greater detail that are critical to the estimation, the analysis also requires certain other 

assumptions. The RA seeks to make conservative assumptions, which err on the side of leading 

to higher costs, in the absence of more robust information. These assumptions include: 

• All newly constructed theaters will use digital exhibition processes, not analog.

• Those theaters that still project analog film in 2015 are assumed to remain analog.

(This is considered a “conservative” assumption because costs for analog captioning 

are significantly higher than for digital captioning.)

• Analog theaters are assumed to make their equipment purchases at the end of the 

fourth year (2018), just before compliance is required.

• Since the number of Miniplex and Single Screen theaters is declining, the number of 

theaters that purchase equipment in the procurement year is based on the number of 

theaters that are expected to be in business the following year. In other words, if a 

theater expects to go out of business, we assume they will not make the investment in 

purchasing the captioning technology the year before they close.

• In the absence of more detailed information, the model assumes that two percent of 

all analog theaters are already providing captioning and audio description.

28

• Unit costs for captioning and audio description are assumed to remain constant from 

2013 (when last researched) to 2015, when the final rule is expected to be published. 

Since unit costs for the equipment surveyed have either remained steady or declined 

between 2010 and 2013, this assumption may likely overestimate at least some 

equipment costs. Note also, that this assumption means that per-theater costs to 

purchase equipment are the same for 2013 and 2015, all other factors being equal.

 (In 

2015, this amounts to around 35 Miniplex and Single Screen theaters and about 100 

screens total; in 2018, those figures changed to 32 theaters and 89 screens.)

• All theaters will comply with the rule, and no theater will assert that it does not need 

to comply with this ADA obligation because compliance would result in an “undue 

burden.” The ADA provides that covered entities need not comply with a 

requirement if doing so would result in a fundamental alteration or undue burden. 42 

U.S.C. 12182(b)(2)(A)(iii). Since it is likely that at least some movie theaters will not 

purchase the specified captioning and audio description equipment because doing so 

 

28 Note that while Baseline 1 assumes that all single screen theaters with digital projection are already providing 

captioning and audio description, the cost model did not make the same assumption for analog theaters.
36 | Page

would constitute an undue burden, this assumption errs on the side of overestimating 

costs. 

4.11 Total Costs

For Option 1, costs of compliance with this proposed rule over a 15 year period from the

date of publication of the final rule are estimated to range from $177.8 million to $225.9 million

when using a 7 percent discount rate, and from $219.0 million to $275.7 million when using a 3

percent discount rate. For Option 2, costs of compliance over a 15 year period from the date of 

publication of the final rule are estimated to range from $138.1 million to $186.2 million when 

using a 7 percent discount rate, and from $169.3 million and $226.0 million when using a 3 

percent discount rate. Table 21 and Table 22 show that these cost ranges depend on which 

baseline is used regarding the extent which theaters have or will soon be providing closed movie 

captioning and audio description as proposed in this rule, but independent of this rulemaking.

Table 21: Estimated Costs Under Option 1 (2015 Dollars, 15-year Time Horizon)

Discount Rate

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

Under Baseline 1 

Assumptions - One 

Screen Per-Theater

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

7% $225.9 $191.9 $177.8

3% $275.7 $235.6 $219.0

Table 22: Estimated Costs Under Option 2 (2015 Dollars, 15-year Time Horizon)

Discount Rate

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

Under Baseline 1 

Assumptions - One 

Screen Per-Theater

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

7% $186.2 $152.2 $138.1

3% $226.0 $186.0 $169.3

Under Option 1, the estimated annualized costs of the proposed regulation under each of 

the three possible baseline scenarios range from $19.5 million to $24.8 million when using a 7 

percent discount rate, and from $18.3 million and $23.1 million when using a 3 percent discount 

rate. Under Option 2, the estimated annualized costs of the proposed regulation under each of 

the three possible baseline scenarios range from $15.2 million to $20.4 million when using a 7 
37 | Page

percent discount rate, and from $14.2 million and $18.9 million when using a 3 percent discount 

rate. See Table 23 and Table 24.

29

Table 23: Estimated Annualized Costs Under Option 1 (2015 Dollars, 15-year Time 

Horizon)

 

Discount 

Rate

TOTAL 15 Year Costs TOTAL 15 Year Costs TOTAL 15 Year 

Costs

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $24.8 $21.1 $19.5

3% $23.1 $19.7 $18.3 

Table 24: Estimated Annualized Costs Under Option 2(2015 Dollars, 15-year Time 

Horizon)

Discount 

Rate

TOTAL 15 Year Costs TOTAL 15 Year Costs TOTAL 15 Year 

Costs

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $20.4 $16.7 $15.2

3% $18.9 $15.6 $14.2

The Initial RA shows that estimated annual costs for this proposed rule will not exceed 

$100 million in any year under any of three baseline scenarios, irrespective of whether the 

Department adopts either option for analog screens. Annual costs for each year during the 15

year expected term of the proposed regulation under Option 1 are depicted in Figure 3. In 

addition, detailed tables of annual costs for each of the baseline scenarios are presented in the 

Appendix.

 

29 Annualized costs were calculated in a Microsoft Excel model using the PMT function (-PMT(discount rate, years 

of analysis, present value of total costs)). 
38 | Page

Figure 3: Annual Costs of Rule Under Option 1 (Discounted at 7 Percent)

As seen in Figure 3, the greatest single-year costs occur in the first year following the 

expected publication of the final rule, and these costs range from approximately $50 million 

under the NATO Survey-Based Baseline to just under $80 million under the One Screen PerTheater Baseline.30

 

30 The decision on whether or not to adopt Option 1 or Option 2 does not impact which year would have the largest 

costs nor what those costs would be. The costs for the first year of this rule would remain the same under either 

option. 

 The concentration of costs in the first year is due to the fact that the most 

recent published data indicate that 88 percent of screens use digital projection and they will be 

required to have the necessary equipment within six months of publication of the final rule in 

order to provide closed captioning and audio description for movies that come with those 

features from the distributor. Under the scenario in which analog screens are required to comply 

within four years (Option 1), the next largest single-year costs occur during the fourth year after 

the expected publication of the final rule, which is the compliance deadline for movie theaters 

with analog screens. If rulemaking is deferred for analog screens, the next notable increase in 

costs occurs between years 9 and 11, as many theaters may need to replace captioning hardware

at those times.

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Dollars (2015) Millions

One Screen Per Theater

Litigation Based

NATO Survey-Based
39 | Page

Figure 4: Annual Costs of Rule Under Option 2 (Discounted at 7 Percent)

A break-out of costs by category, as shown below in Figure 5 for Option 1 and Figure 6

for Option 2, illustrates the fact that costs for digital captioning equipment are the most 

significant costs for the proposed rule overall. This is due to the fact that 88 percent of screens 

are currently exhibiting movies in digital format. Figure 5 and Figure 6 also show that costs for 

audio description are a relatively small part of total 15-year costs for the entire rule.

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Dollars (2015) Millions

One Screen Per Theater - No Analog

Litigation-Based - No Analog

NATO Survey-Based - No Analog
40 | Page

Figure 5: Total Costs of Rule Under Option 1 (Discounted at 7 Percent, 15-year Time

Horizon)

$0

$50

$100

$150

$200

$250

One Screen Per Theater Litigation-Based NATO Survey-Based

Dollars (2015) Millions

Baseline Scenario

Total Analog O&M

(Discounted)

Total Analog Assisted

Listening (Discounted)

Total Analog Captioning

(Discounted)

Total Digital O&M

(Discounted)

Total Digital Assisted

Listening (Discounted)

Total Digital Captioning

(Discounted)
41 | Page

Figure 6: Total Costs of Rule Under Option 2 (Discounted at 7 Percent, 15-year Tine 

Horizon)

The relative size of costs for providing captioning versus audio description can be more clearly 

seen in Table 25. Under Option 1, costs for captioning are projected to range from $140 million 

to $190 million over the 15 years, depending on the baseline scenario, while costs for audio 

description under the same baseline scenario and same timeframe are estimated to reach $37 

million.

$0

$50

$100

$150

$200

$250

One Screen Per Theater Litigation-Based NATO Survey-Based

Dollars (2015) Millions

Baseline Scenario

Total Digital O&M

(Discounted)

Total Digital Assisted

Listening (Discounted)

Total Digital Captioning

(Discounted)
42 | Page

Table 25: Total Costs Under Option 1, Alternate Baseline Scenarios (Discounted at 7 

Percent, 15-year Time Horizon)

Costs

TOTAL 15 Year 

Costs

TOTAL 15 Year 

Costs

TOTAL 15 Year 

Costs

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

Total Captioning Costs 

(Digital and Analog) $188.9 $154.9 $140.9

Total Audio Costs 

(Digital and Analog) $36.9 $36.9 $36.9

TOTAL 

Captioning and Audio 

Description Costs

$225.9 $191.9 $177.8

*Totals may not sum due to rounding

The RA estimates per-facility costs for each theater size type. The largest costs per year 

for any single movie theater with digital projection would occur in the first year due to the 

purchase of necessary equipment. The first year capital costs for digital Megaplex theaters 

(those with 16 or more screens and, for the purpose of the analysis, an average of 18 screens) are 

estimated to average approximately $38,547, while comparable costs for digital single screen 

theaters would average $3,198 (Table 26).
43 | Page

Table 26: Per Theater Initial Capital Costs for Digital Theaters *

Digital Theater 

Type/Size

Per Theater Initial 

Capital Costs

(Using Doremi 

Technology for 

Movies in Digital 

Format)

Per Theater Initial 

Capital Costs

(Using USL

Technology for 

Movies in Digital 

Format)

Average Initial 

Capital Costs for 

Digital Theater

(Average of Different 

Technology)

Megaplex $40,540 $36,554 $38,547

Multiplex $27,880 $25,798 $26,839

Miniplex $10,920 $10,252 $10,586

Single Screen $3,285 $3,111 $3,198

Note: These costs include the costs to purchase and install: (1) captioning hardware and/or software (one per screen); (2) 

individual devices for captioning (ranging from 4 for Single Screens to 34 for Megaplexes); (3) additional hardware, if needed, 

to transmit audio description (from none to one device per screen); and (4) additional audio description listening devices

(ranging from 2 for Single Screens to 18 for Megaplexes).

*Because unit costs for captioning and audio description equipment have either remained steady or declined between 2010 and 

2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to be 

published. 

Should the Department proceed under Option 1 and cover analog screens, costs for 

analog theaters would be higher than those for digital theaters for each type/size. The first year 

costs for analog single screen theaters would total a little more than $8,172 (Table 27). The first 

year costs for digital single screen theaters would average $3,198 (Table 26). There are no costs 

for analog theaters under Option 2.

Table 27: Per Theater Initial Capital Costs for Analog Theaters * 

Analog Theater Type/Size Per Theater Initial Capital Costs

(Rear Window Technology for Analog Films)

Megaplex** NA

Multiplex** NA

Miniplex $31,884

Single Screen $8,172

Note: These costs include the costs to purchase and install: (1) captioning hardware and/or software (one per screen); (2) 

individual devices for captioning (ranging from 4 for Single Screens to 12 for Miniplexes); (3) additional hardware, if needed, 

to transmit audio description (from none to one device per screen); and (4) additional audio description listening devices

(ranging from 2 for Single Screens to 4 for Miniplexes).

*Because unit costs for captioning and audio description equipment have either remained steady or declined between 2010 and 

2013, they are assumed to remain constant from 2013 (when last researched) to 2015, when the final rule is expected to be 

published. 

**Note that the RA assumes that all Megaplexes and Multiplexes have transitioned to digital projection systems.
44 | Page

5. Benefits

A large number of Americans have vision or hearing disabilities, to varying degrees. The 

Department believes that this rule will benefit persons who are deaf or hard of hearing or are 

blind or have low vision, as well as those with moderate hearing loss, who do not currently have 

consistent access to movie theaters that exhibit movies with closed captioning and audio 

description. Many individuals with hearing loss have difficulty discriminating among competing 

sounds in movies and understanding what it is they hear, even if they can hear those sounds. 

Sounds from other patrons can also interfere with the ability of a patron with partial hearing loss 

to understand all the dialogue in a movie. Other individuals have difficulty understanding what 

is being said if the actors speak with accents or have poor enunciation, and those patrons who 

rely even partly on lip reading will miss some dialogue because they cannot always see the 

actor’s face. Individuals with hearing loss, who have some level of improved hearing 

comprehension aided by hearing aids, middle ear implants, and cochlear implants, may also 

experience the same difficulty discriminating among competing sounds in the movie 

environment.31

The individuals who will directly benefit from this rule are those persons with hearing or 

vision disabilities who, as a result of this rule, would be able for the first time to attend movies 

with closed captioning or audio description in theaters across the country on a consistent basis. 

Individuals who will indirectly benefit from this rule are the family and friends of persons with 

hearing and vision disabilities who would be able to share the movie-going experience more 

fully with their friends or loved ones with hearing and vision disabilities. 

 

The benefits of this rule are difficult to quantify for multiple reasons, including the 

following: (1) the Department has not been able to locate robust data on the rate at which persons 

with disabilities currently go to movies shown in movie theaters, (2) the fact that the number of 

persons with disabilities who will newly go to movies will change, (3) the number of persons 

with disabilities who will go to movies more often will change, (4) the number of persons who 

will go to the movies as part of a larger group that includes a person with a disability will 

change, and (5) the number of persons with disabilities who would have gone to the movies 

anyway but under the rule will have a fuller and more pleasant experience will also change—all 

of which will change by an unknown amount. In addition, the Department does not know 

precisely how many movie theaters currently screen movies with closed captioning and audio 

description, or how many people with hearing or vision disabilities currently have consistent

 

31 “While many people tend to think that the only factor in hearing loss is loudness, there are actually two factors 

involved: loudness and clarity.” See the NPRM for a fuller discussion, and Facing the Challenge, A Survivor’s 

Manual for Hard of Hearing People, Understanding your audiogram, Hearing Loss Association of Oregon Revised 

Fourth Edition, Spring 2011, at 8, available at http://www.hearinglossor.org/survivor_manual.pdf (last visited July 

10, 2014).
45 | Page

access to movie theaters that provide closed captioning and audio description. Finally, the

Department is not aware of any peer reviewed academic or professional studies that monetize or 

quantify the societal benefit of providing closed captioning and audio description at movie 

theaters.

Data on movie-going patterns of persons who are deaf or hard of hearing or are blind or 

have low vision is limited, making estimations of demand very difficult. However, numerous 

public comments suggest that many persons who are deaf or hard of hearing or are blind or have 

low vision do not go to the movies at all, or attend movies well below the national average of 4.1 

annual admissions per person, because of the lack of auxiliary aids and services that would allow 

them to understand and enjoy the movie. 

Though we cannot confidently estimate the likely number of people who would directly 

benefit from this proposed rule, we have reviewed data on the number of people with hearing or 

vision disabilities in the United States. The Census Bureau estimates that 3.3 percent of the U.S. 

population has difficulty seeing, which translates into a little more than eight million individuals 

in 2010, and a little more than two million of those had “severe” difficulty seeing.32 At the same 

time, the Census Bureau estimates that 3.1 percent of people had difficulty hearing, which was a 

little more than 7.5 million individuals in 2010, and approximately one million of them having 

“severe” difficulty hearing. Not all of these people would benefit from this proposed rule. For 

example, some people’s hearing or vision disability may not be such that they would need closed 

captioning or audio description. Some people with hearing or vision disabilities may not use the

equipment for a variety of reasons, including finding the equipment uncomfortable to use. Some 

people with hearing or vision disabilities may already have consistent access to theaters that 

screen all their movies with closed captioning and audio description. And some theaters may not 

provide closed captioning and audio description for all their movies because it would be an 

undue burden under the ADA to do so. Meanwhile, some people with hearing or vision 

disabilities would not attend public screenings of movies even if theaters provided closed 

captioning and audio description simple because they do not enjoy going out to the movies—just 

as is the case among persons without disabilities.33

 

32 The Census defines difficulty seeing as “experiencing blindness or having difficulty seeing words or letters in 

ordinary newsprint even when normally wearing glasses or contact lenses.” It defines difficulty hearing as 

“experiencing deafness or having difficulty hearing a normal conversation, even when wearing a hearing aid “ See

U.S. Census Bureau, U.S. Department of Commerce, P70-131, Americans with Disabilities: 2010 Household 

Economic Studies at 8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited July 10, 

2014).

 

33 In 2012, a little more than two thirds (68 percent) of the U.S. and Canadian population over two years old went to 

a movie at a movie theater at least once that year. See Motion Picture Association of America, Theatrical Market 

Statistics (2012), available at http://www.mpaa.org/wp-content/uploads/2014/03/2012-Theatrical-Market-StatisticsReport.pdf (last visited July 10, 2014).
46 | Page

In recent years, a large number of movie theaters have already invested in equipment to 

provide closed captioning and audio description. As noted earlier in this Regulatory Assessment, 

NATO estimates that 53 percent of digital screens are already captioning and audio description 

enabled. Therefore, a large number of persons with hearing or vision disabilities may already 

have access to movies screened with captioning and audio description. The Department 

considered using the data on the number of already accessible movie theaters to estimate 

benefits, but notes that this figure would not necessarily translate into an estimate that about half 

(or 53 percent) of persons who are deaf or hard of hearing or are blind or have low vision are 

now benefiting from captioning or audio description. There are multiple reasons why, even if we 

accept this estimate of the current availability of captioning and audio description, it does not 

translate into direct benefits for all those who could benefit. These reasons include the 

following: (1) only some screens at some theaters may have closed captioning and audio 

description capabilities and those may not be showing the movie the person wants to see; (2) the 

theater may not be showing the desired movie with captions and audio description on a 

convenient day and time; (3) the theater may be located much farther away from where the 

person with a disability resides than other, less accessible theaters, which may result in a 

decision not to go to a movie theater at all; or (4) a person may live in a community that has 

theaters with closed captioning and audio description capability, but may travel (for vacation, to 

visit relatives, for work, or other reasons) to a community that does not have theaters that are 

captioning and audio description enabled.

Meanwhile, not only is the estimate of the number of who might directly benefit from the 

proposed rule uncertain, but the individual benefits are not uniform because persons who are 

deaf or hard of hearing or are blind or have low vision are likely to benefit from this proposed 

rule in different ways and realize benefits in amounts. The type and amount of benefits can 

depend on personal circumstances and preferences, as well as proximity to movie theaters that 

otherwise would not offer captioning or audio description but for this proposed rule. Some 

persons with vision and hearing disabilities have effectively been precluded from going to 

movies at theaters because the only theaters available to them did not offer closed captioning or 

audio description, offered open captioning but only at inconvenient times (such as the middle of 

the day during the week), or offered captioning or audio description for only a few films and not 

for every screening of those films. For these persons, the primary benefit will be the ability to 

see movies when released in movie theaters along with other movie patrons, which they 

otherwise would not have had the opportunity to do. They will have the value of that moviegoing experience, as well as the opportunity to discuss the film socially at the same time as the 

rest of the movie-viewing public. The amount of benefits experienced by a person with a 

hearing or vision disability who previously had no access to a theater that provided closed 

captioning or audio description at all its screenings will be different than the amount experienced 

by a person with a hearing or vision disability who previously had access to a theater that did 

consistently provide closed captioning and audio description at its screenings. In addition, the 

amount of benefits from this rule experienced by a person who cannot follow a movie at all 

without the assistance of closed captioning is likely to be greater than the amount of benefits 
47 | Page

experienced by a person who can follow parts of a movie without the assistance of closed 

captioning. 

There is a social value in movie viewing for many people, not just an entertainment 

value. As noted above in Section 1, movies are a part of our shared cultural experience, “water 

cooler” talk, and the subject of lunch-time conversations. The Supreme Court observed over 60 

years ago that motion pictures “are a significant medium for the communication of ideas” and 

“may affect public attitudes and behavior in a variety of ways, ranging from direct espousal of a 

political or social doctrine to subtle shaping of thought which characterizes all artistic 

expression. The importance of motion pictures as an organ of public opinion is not lessened by 

the fact that they are designed to entertain as well as to inform.”34

As previously mentioned, some persons with vision and hearing disabilities may already 

have access to some movie theaters with captioning and/or audio description capabilities, but that 

access may be limited to only some locations, theaters, and times. Some of these people may be 

patronizing movie theaters now, but less often than they otherwise would, and less often than 

they would like, if movie captioning or audio description were available consistently across all 

theaters. These people may see more movies and/or save time they currently must spend 

monitoring those few accessible theaters or showings and perhaps additional time coordinating 

trips to the movie with family and friends. If all theaters are accessible to those who are deaf or 

hard of hearing or blind or have low vision, then some persons will now have greater choice 

among multiple locations and can make choices based on other criteria such as location, times, 

and other amenities, just as Americans without these disabilities already do.

 When individuals who are 

deaf or hard of hearing or blind or have low vision have the opportunity to attend movies that 

they can actually understand because of the availability of captions or audio description, they are 

exposed to new ideas and gain knowledge that contributes to the development of their 

communication and literacy.

In addition to the direct beneficiaries of the proposed rule discussed above, others may be 

indirect beneficiaries of this rule. Family and friends of persons with these disabilities who wish 

to go to the movies together as a shared social experience will now have greater opportunities to 

do so. More adults who visit elderly parents with hearing or sight limitations would presumably 

be able to take their parents on outings and enjoy a movie at a theater together, sharing the 

experience as they may have in the past. The Department received numerous comments from 

individuals who are deaf, hard of hearing, blind, or have low vision in response to its 2010 

Advance Notice of Proposed Rulemaking on Movie Captioning and Video Description in Movie 

Theaters, 75 FR 43467, (July 26, 2010) (2010 ANPRM), describing how they were unable to 

take part in the movie-going experience with their friends and family because of the 

 

34 Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495, 501 (1952). 
48 | Page

unavailability of captioning or audio description. Many individuals felt that this not only 

affected their ability to socialize and fully take part in family outings, but also deprived them of 

the opportunity to meaningfully engage in the discourse that often surrounds movie attendance. 

Parents with disabilities also complained that they could not answer their children’s questions 

about a movie they saw together because the parents did not understand what had happened in 

the movie.

There is also an equity and distributional benefit of this proposed rule, as some areas are 

more likely to have theaters with captioning and audio description capabilities than others. As 

noted in the NPRM, it is the Department’s understanding that persons who live in communities 

served only by smaller regional movie theater chains are far less likely to have access to 

captioned and audio described movies than individuals with disabilities who live in California, 

Arizona, or any of the major cities with theaters operated by Regal, Cinemark, or AMC.35

Moreover, while not formally quantified, it is fully expected that this guarantee of access 

to movies screened at movie theaters for individuals with hearing or vision impairments will spur 

some level of new demand for movie attendance and, therefore, lead to increased box office 

receipts. Unfortunately, there is little data on the demand for movie-viewing in places of public 

accommodation by persons who are deaf or hard of hearing or blind or have low vision, and as 

such preparing robust estimates of the increase in movie theater attendance is difficult. We seek 

public input on this issue.

 Thus, 

it is possible that more urban areas, or certain cities or states, may have greater accessibility than 

others, creating or exacerbating geographical differences in opportunities. 

Because the proposed rule will be setting specific standards for effective communication 

at movie theaters, it should also lead to a decrease or near elimination of confusion regarding 

what accommodations are required by movie theaters. The current ADA title III regulation does 

not contain explicit requirements specifying how movie theaters should meet their effective 

communication obligations, and this is one of the reasons behind the multiple private lawsuits 

filed throughout the country. Setting explicit requirements at the national level will lead to 

harmonization across the country. 

And finally, there are additional benefits of the proposed rule that relate to equity and 

fairness considerations generally. See Exec. Order 13563 § 1(c) (underscoring the importance of 

agency consideration of benefits “that are difficult or impossible to quantify, including equity, 

human dignity, [and] fairness”). The Department expects that the proposed regulation will allow 

 

35 The Department bases this belief on its review of the information provided by Captionfish, which is a nationwide 

search engine that monitors which theaters offer both closed and open captions and audio description, and updates 

its website regularly. See Captionfish “Frequently Asked Questions,” available at http://www.captionfish.com/faq 

(last visited July 10, 2014). 
49 | Page

for better integration of persons with disabilities into the American social mainstream. Indeed, 

several individuals with disabilities who commented on the ANPRM noted that they had not 

attended a movie theater in decades—or, for some, during their entire lifetimes—because the 

lack of auxiliary aids and services makes the movie unintelligible. Other commenters noted that 

movie theaters’ common practice of exhibiting captioned or audio described movies only at offpeak days and times made them feel like “second class citizens.” 

The most significant benefits of the rule relate to issues of fairness, equity, and equal 

access, all of which are extremely difficult to monetize, and the Department has not been able to 

robustly quantify and place a dollar value on those. Regardless, the Department believes the 

non-quantifiable benefits justify the costs of requiring captioning and audio description at movie 

theaters nationwide. 

6. Alternatives Considered

The Department considered multiple alternatives for this rulemaking. Among those 

weighed most heavily for the proposed rule are the two discussed below. (Annual estimates are 

provided in the Appendix.)

Requiring only 50 Percent of Screens to Have Closed Captioning and Audio Description

The Department considered proposing limiting the requirement for closed captioning and 

audio description to only 50 percent of movie screens at each theater. This alternative was 

discussed in the July 26, 2010, ANPRM. Because the ADA requires places of public 

accommodation “to ensure that no individual with a disability is excluded, denied services, 

segregated or otherwise treated differently than other individuals because of the absence of 

auxiliary aids and services, unless the entity can demonstrate that taking such steps would 

fundamentally alter the nature of the good, service, facility, privilege, advantage, or 

accommodation being offered or would result in an undue burden,” 42 U.S.C. 

§12182(b)(2)(A)(iii), it would be inappropriate to only require access to 50 percent of movies 

being shown. After considering public comment and additional research, the Department has 

determined that it is not feasible for movie theaters to meet their ADA obligation to provide 

equally effective communication to patrons with hearing and vision disabilities, unless they have 

the capacity to show the movies that are available with captions and audio description at all 

showings when those same movies are available to patrons without disabilities. Unless a movie 

theater showed every movie on two screens in comparable auditoriums at all times—one screen 

showing the captioned and audio described version and the other showing the same movie 

without captions and audio description—the Department is concerned that a 50 percent 

requirement would regularly lead to the circumstance where a movie theater would have a 

captioned or audio described movie, but would have no screen available on which to show it 

because all the appropriately equipped auditoriums would be otherwise in use. 
50 | Page

The Department considered whether it would be possible for movie theaters to meet their 

effective communication obligations by switching movies into auditoriums equipped to show 

movies with closed captions and audio description when a patron with a hearing or vision 

disability needed those accessibility features. But, the Department’s research indicated that the 

business agreements regarding movie exhibitions limit this type of flexibility. Movie theaters 

regularly negotiate with film distributors regarding which auditoriums in a theater with more 

than one screen will show which films. Generally, if a film is expected to be very popular, it will 

open in the largest auditorium or in several auditoriums within the same complex. As the 

popularity decreases, the film will be moved from larger auditoriums to smaller auditoriums and 

from multiple auditoriums to a single auditorium. The timing of such moves will vary from 

theater to theater and from film to film.

Those theaters that do have the flexibility to switch auditoriums upon request to provide 

closed captioning or audio description would have other added costs associated with changing 

the auditoriums for showings. Costs could include the additional employee time and resources 

needed to physically switch the movie from one auditorium to another, as well as potential lost 

ticket sales if a more popular movie is displaced into a much smaller theater that sells out faster. 

Additionally, switching auditoriums to allow use of captioning or audio description equipment 

may result in auditorium changes for other patrons after they had purchased tickets and are 

possibly already seated. This would result in an inconvenience to many patrons, including the 

possibility that the switch would result in a different viewing experience than expected when 

purchasing a ticket due to differing auditorium sizes and comfort levels. 

The Department also believes that this alternative would carry a much higher litigation 

risk. Patrons with disabilities would not have any way of assessing whether the failure to show a 

particular movie with closed captions and audio description was because the theater was failing 

to comply with its obligations under the regulation to provide these auxiliary aids and services or 

because that particular movie was not available with closed captions or audio description. 

Whether a theater had the capacity to move a film to accommodate a patron with a disability and 

should have done so upon request, or whether the theater did everything to meet its obligations 

under the regulation, would become murky and create confusion that could result in an increased 

risk of litigation.

Finally, this alternative favors larger movie theaters and disadvantages single screen 

theaters, which are more likely to be small businesses. Under a 50 percent requirement, at least 

one auditorium at every theater must have closed captioning and audio description capabilities. 

Thus, single screen theaters would see no reduction in costs under this alternative. 

As such, the Department has rejected this alternative due to concerns that requiring only 

50 percent of screens to have closed captioning and audio description capabilities would not 

comply with the ADA itself, that this approach would require substantial changes to the movie 

theater business model, that the initial perceptions that this approach would have substantially 
51 | Page

lower total costs are actually misleading, and that this approach would not address in any 

meaningful way the concerns for small business single screen theaters.

The discounted total costs for the 50 percent compliance alternative are displayed in the 

Table 28 and Table 29 below. Total costs for this alternative range from $101.9 million to $117.5 

million under Option 1 and $76.8 million to $92.4 million under Option 2 when using a 7 percent 

discount rate. These costs, however, do not take account of the potential administrative costs and 

burdens and potential loss of revenue discussed above.

Table 28: Total Costs Under Option 1 (50% Compliance Requirement) (2015 Dollars, 15-

year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs TOTAL 15 Year Costs TOTAL 15 Year 

Costs

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $117.5 $108.9 $101.9

3% $144.4 $134.3 $126.0

Table 29: Total Costs Under Option 2 (50% Compliance Requirement) (2015 Dollars, 15-

year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs TOTAL 15 Year Costs TOTAL 15 Year 

Costs

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $92.4 $83.8 $76.8

3% $112.8 $102.7 $94.4

Compliance by Analog Theaters Required in Two Years 

The Department considered providing theaters with analog screens two years after the 

rule’s publication date to become compliant, as opposed to the six months compliance date 

provided for digital screens. This delay was considered for analog movie screens because such a 

large number of theaters are in the midst of transitioning to digital cinema, that additional time 

might be necessary. In addition, the delayed compliance date would allow small theaters that 
52 | Page

remain analog more time to obtain the necessary resources to purchase the equipment to provide 

closed captioning and audio description. Table 30 below presents the 15 year, discounted costs 

under this alternative. These costs, which range from $189.4 million to $237.5 million under a 7

percent discount rate, are higher than the total costs for the proposed rule.

Table 30: Total Costs (2 Year Compliance Date), (2015 Dollars, 15-year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs TOTAL 15 Year Costs TOTAL 15 Year 

Costs

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $237.5 $203.5 $189.4

3% $286.5 $246.4 $229.8

As previously discussed, the movie theater industry is currently undergoing significant 

changes, among them is the near elimination of analog films for exhibition. Small theaters that

still have analog projection are more likely to have fewer financial resources than other theaters.

At the same time, smaller theaters are facing other market pressures, evidenced by an average 

annual decline of 4.2 percent in their numbers in recent years (see Table 11).

Due to the uncertainty surrounding the future of analog film and the market pressures that

small analog theaters currently face, the Department rejected this alternative.. As discussed 

earlier, the Department is now proposing two options for analog screens: Option 1— a four year 

compliance date; or Option 2— deferral of application of the requirements of the rule to analog 

screens until a later date.

7. Results 

This Initial RA estimates the costs and benefits of the proposed rule for revising the ADA 

title III regulation concerning movie captioning and audio description. Using industry data on 

theater characteristics and manufacturer’s prices (see Section 4 for details), the Initial RA 

estimates that under Option 1, total costs for all theaters during the entire 15 years following the 

publication of the final rule will likely range from $177.8 million to $225.9 million when using 

a 7 percent discount rate, and from $219.0 million to $275.7 million when using a 3 percent 

discount rate. Under Option 2, total costs for all theaters during the entire 15 years following 

publication of the final rule will likely range from $138.1 million to $186.2 million when using 

a 7 percent discount rate, or from $169.3 million to $226.0 million when using a 3 percent 

discount rate. These range of cost estimates depend on the assumptions used regarding the 

extent to which theaters are or soon will be providing closed movie captioning and audio 
53 | Page

description as proposed in this rule, but independent of this rulemaking (see Section 4.2 for 

details on the baseline scenarios), as seen in Table 31 and Table 32. 

Table 31: Estimated Costs Under Option 1 (2015 Dollars, 15-year Time Horizon)

Discount Rate

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

Under Baseline 1 

Assumptions - One 

Screen Per-Theater

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

7% $225.9 $191.9 $177.8

3% $275.7 $235.6 $219.0

Table 32: Estimated Costs Under Option 2 (2015 Dollars, 15-year Time Horizon)

Discount Rate

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

TOTAL Costs - 15 

Years

Under Baseline 1 

Assumptions - One 

Screen Per-Theater

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions –

NATO Survey Based

(millions $) (millions $) (millions $)

7% $186.2 $152.2 $138.1

3% $226.0 $186.0 $169.3

These estimated costs consist of (1) the purchase of hardware and/or software to send the 

captions to individual captioning devices; (2) the purchase of individual captioning devices as 

per the scoping requirements specified in the rule; (3) periodic costs to replace hardware, 

software and devices; (4) annual operations and maintenance costs to cover any storage and 

management, training, and other recurring costs; (5) any additional hardware costs to transmit 

audio description to individual devices; and (6) the costs to purchase additional individual audio 

description listening devices, if needed. These costs are estimated over a 15 year period, 

beginning in the first year after publication of the final rule for digital theaters (2015), and in 

addition, beginning in the fourth after publication of the final rule for analog theaters (2018)

under Option 1. 

Under Option 1, the estimated annualized costs of the proposed regulation under each of 

the three possible baseline scenarios range from $19.5 million to $24.8 million when using a 7

percent discount rate, or from $18.3 million to $23.1 million when using a 3 percent discount 

rate. Under Option 2, the estimated annualized costs of the proposed regulation under each of 

the three possible baseline scenarios range from $15.2 million $20.4 million when using a 7 
54 | Page

percent discount rate, or from $14.2 million to $18.9 million when using a 3 percent discount 

rate. (See Table 33).

36

Table 33: Annualized Costs and Benefits of Proposed Rule (2015 Dollars, 15-year Time 

Horizon)

 

7% Discount Rate 3% Discount Rate

Baseline 1 

Assumptions 

(One Screen 

Per-Theater)

Baseline 2 

Assumptions 

(LitigationBased)

Baseline 3 

Assumptions 

(NATO 

Survey 

Based)

Baseline 1 

Assumptions 

(One Screen 

Per-Theater)

Baseline 2 

Assumptions 

(LitigationBased)

Baseline 3 

Assumptions 

(NATO 

Survey 

Based)

Costs

(million $)

Option 1 – Four Year Compliance for Analog Theaters 

$24.8 $21.1 $19.5 $23.1 $19.7 $18.3 

Option 2 – Deferred Rulemaking for Analog Theaters 

$20.4 $16.7 $15.2 $18.9 $15.6 $14.2 

Benefits

The proposed rule would address the discriminatory effects of communication 

barriers at movie theaters encountered by individuals who are deaf or hard of 

hearing or are blind or have low vision. By ensuring that movie theaters screen 

those movies that are produced and distributed with the necessary auxiliary aids 

and services—captioning and audio description—and that theaters provide the 

individual devices needed to deliver these services to patrons with these particular 

disabilities, this rule would afford such individuals an equal opportunity to attend 

movies and follow both the audio and visual aspects of movies exhibited at movie 

theaters. Although the Department is unable to monetize or quantify the benefits 

of this proposed rule, it would have important benefits. For example, it would 

provide people with hearing and vision disabilities better access to the movie 

viewing experience enjoyed by others; it would allow such persons to attend and 

enjoy movies with their family members and acquaintances; it would allow people 

with hearing or vision disabilities to participate in conversations about movies with 

family members and acquaintances; and it would promote other hard to quantify 

benefits recognized in Executive Order 13563 such as equity, human dignity, and 

fairness.

Costs are estimated for each year and are not expected to exceed $100 million in any year 

under either of three baseline scenarios, regardless of whether the Department adopts Option 1 or 

 

36 Annualized costs were calculated in a Microsoft Excel model using the PMT function (-PMT(discount rate, years 

of analysis, present value of total costs)). 
55 | Page

Option 2. The greatest single-year costs occur in the first year following the expected 

publication of the final rule and range from approximately $50 million under the NATO SurveyBased Baseline to just under $80 million under the One Screen Per-Theater Baseline (see Figure 

3 on page 38). Based on these estimates, the Department concludes that its proposed rule for 

movie captioning and audio description, as currently drafted, does not represent an economically 

“significant” regulatory action.

37

The costs of the requirement to provide captioning is significantly higher than the costs to 

provide audio description (see 

 

Table 25 on page 42). Over 15 years, the costs to provide 

captioning range from $140 million to $190 million, depending on the baseline scenario, while 

the costs to provide audio description are estimated to reach $37 million.

As previously discussed, the benefits of this rule are difficult to quantify for multiple 

reasons. Individuals who will directly benefit from this rule include those persons with hearing 

or vision disabilities who, as a result of this rule, would be able for the first time to attend and 

fully experience movies with closed captioning or audio description in theaters across the 

country on a consistent basis. Such access would allow these people to attend and enjoy movies 

with their family members, friends, and acquaintances, and enable them to participate in 

conversations about movies with other individuals. If all theaters are accessible to those who are 

deaf or hard of hearing or blind or have low vision, then some persons will now have greater 

choice among multiple locations and can make choices based on other criteria such as location, 

times, and other amenities, just as Americans without these disabilities already do.

Though we cannot confidently estimate the likely number of people who would directly 

benefit from this proposed rule, we have reviewed data on the number of people with hearing or 

vision disabilities in the United States. The Census Bureau estimates that 3.3 percent of the U.S. 

population has difficulty seeing, which translates into a little more than eight million individuals 

in 2010, and a little more than two million of those had “severe” difficulty seeing.38

 

37 See Exec. Order 12,866 §§ 3(f)(1), 6(a)(3)(C) defining economically “significant” in terms of, among other 

things, regulatory actions having “an annual effect on the economy of $100 million or more”.

 At the same 

time, the Census Bureau estimates that 3.1 percent of people had difficulty hearing, which was a 

little more than 7.5 million individuals in 2010, and approximately one million of them having 

“severe” difficulty hearing. In addition, there are an unknown number of indirect beneficiaries 

of this rule. These indirect beneficiaries are those family and friends of persons with these 

38 The Census defines difficulty seeing as “experiencing blindness or having difficulty seeing words or letters in 

ordinary newsprint even when normally wearing glasses or contact lenses.” It defines difficulty hearing as 

“experiencing deafness or having difficulty hearing a normal conversation, even when wearing a hearing aid.” See

U.S. Census Bureau, U.S. Department of Commerce, P70-131, Americans with Disabilities: 2010 Household 

Economic Studies at 8 (2012), available at http://www.census.gov/prod/2012pubs/p70-131.pdf (last visited July 10, 

2014).
56 | Page

hearing and vision disabilities who wish to go to the movies as a shared social experience who 

will have greater opportunities to do so as a result of this rule.

The most significant benefits of the rule, however, relate to issues of fairness, equity, and 

equal access, all of which are extremely difficult to monetize, and the Department has not been 

able to robustly quantify and place a dollar value on those. Regardless, the Department believes 

the non-quantifiable benefits justify the costs of requiring captioning and audio description at 

movie theaters nationwide. 

Sensitivity Analysis

The Department was able to find robust data regarding the costs of purchasing and 

installing closed captioning and audio description equipment, the number of theaters in the 

country and their total number of screens, the expected growth (and decline) rates of movie 

theaters by type, and a few other critical variables. However, it has not found concrete data to 

estimate operations and maintenance costs for closed captioning and audio description 

equipment or the administrative or training costs associated with the requirements of this rule. 

No substantive comments with data on these costs were received in public comments to the 

NPRM either. 

Therefore, the Department has conducted a sensitivity analysis with two alternative 

rates—5 percent and 8 percent—for calculating O&M costs, and is also asking for public 

comment on these costs. These rates are percentages of purchase costs and represent standard 

rates for O&M used by cost estimators in construction and design/engineering, and were also 

used in the Department’s Regulatory Impact Analysis of the Final Revised Regulations 

Implementing Titles II and III of the ADA (Sept. 15, 2010).39

Table 34, Table 35, Table 36 and Table 37 present the total costs for the proposed rule 

when using 5 percent and 8 percent of purchase costs to estimate annual operations and 

maintenance. These costs are somewhat higher than the total discounted 15-year costs which 

assume a 3 percent for O&M costs. Those costs range from $177.8 million to $225.9 million 

under Option 1 using a 7 percent discount rate(see Table 31). However, if a 5 percent rate is 

used to calculate O&M costs, the proposed rule’s total costs over 15 years (using a 7 percent 

discount rate) range from $199.7 million to $247.8 under Option 1, depending on the baseline. If 

an 8 percent rate is used to calculate O&M costs, the proposed rule’s total costs over 15 years 

(using a 7 percent discount rate) range from $232.7 million to $280.8 under Option 1, depending 

on the baseline.

 

39 See Appendix I: Operations and Maintenance, for more information on standard O&M costs, and these sources 

from which those were derived.
57 | Page

Table 34: Total Costs Under Option 1 (5% O&M) (2015 Dollars, 15-year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs 

(5% O&M)

TOTAL 15 Year Costs

(5% O&M)

TOTAL 15 Year 

Costs

(5% O&M)

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $247.8 $213.8 $199.7

3% $303.9 $263.8 $247.2

Table 35: Total Costs Under Option 2 (5% O&M) (2015 Dollars, 15-year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs 

(5% O&M)

TOTAL 15 Year Costs

(5% O&M)

TOTAL 15 Year 

Costs

(5% O&M)

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $204.3 $170.3 $156.2

3% $249.1 $209.1 $192.4
58 | Page

Table 36: Total Costs Under Option 1 (8% O&M) (2015 Dollars, 15-year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs 

(8% O&M)

TOTAL 15 Year Costs

(8% O&M)

TOTAL 15 Year 

Costs

(8% O&M)

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $280.8 $246.8 $232.7

3% $346.2 $306.2 $289.6

Table 37: Total Costs Under Option 2 (8% O&M) (2015 Dollars, 15-year Time Horizon)

Discount 

Rate

TOTAL 15 Year Costs 

(8% O&M)

TOTAL 15 Year Costs

(8% O&M)

TOTAL 15 Year 

Costs

(8% O&M)

Under Baseline 1 

Assumptions - One 

Screen Per-Theater 

Under Baseline 2 

Assumptions –

Litigation-Based

Under Baseline 3 

Assumptions – NATO 

Survey Based

(millions $) (millions $) (millions $)

7% $231.5 $197.5 $183.4

3% $283.8 $243.7 $227.1

When using a 5 percent rate to estimate different operations and maintenance costs, 

annual costs never rise above $80 million in any single year under the One-Screen Per Theater 

Baseline, above $61 million in any single year under the Litigation-Based Baseline, or $53

million in any single year under the NATO Survey-Based Baseline. When using an 8 percent 

rate to estimate operations and maintenance costs, annual costs never rise above $83 million in 

any single year under the One-Screen Per Theater Baseline, above $63 million in any single year 

under the Litigation-Based Baseline, or $55 million in any single year under the NATO SurveyBased Baseline. (Detailed annual estimates are presented in the Appendix.)
59 | Page

8. Summary of Initial Regulatory Flexibility Analysis40

Consistent with the provisions of the Regulatory Flexibility Act, the Department has also 

carefully considered the likely impact of the proposed regulation on small businesses in the 

movie exhibition industry. See RFA § 605(b); Presidential Memorandum, “Regulatory 

Flexibility Small Business, and Job Creation,” 76 FR 3827 (Jan. 21, 2011). The Department has 

determined that this proposed rule will have a significant economic impact on a substantial 

number of small businesses. 

For motion picture theaters, small businesses comprise the vast majority of firms in the 

industry. The current size standard for a small movie theater business is $35.5 million dollars in 

annual revenue. In 2007, the latest year for which detailed breakouts by industry and annual 

revenue are available, approximately 98 percent of movie theater firms met the standard for 

small business, and these firms managed approximately 53 percent of movie theater 

establishments.41

8.1 Reason for Proposed Rule 

 As noted earlier, the Department is considering two options for analog screens. 

Option 1 would delay the compliance date for analog screens for four years after publication of 

the final rule. Option 2 would defer rulemaking altogether for analog screens until a later date. 

The IRFA estimates for Option 1 the average initial capital costs per firm for firms that display 

digital or analog movies. The average costs for small firms were between approximately 0.7 

percent to 2.1 percent of their average annual receipts for firms with digital theaters, and between 

approximately 2.0 percent to 5.7 percent of average annual receipts for firms with analog 

theaters. The Department has used the IRFA to examine other ways, if possible, to accomplish 

the Department’s goals with fewer burdens on small businesses. The vast majority of theaters 

with analog screens are small businesses, and the Department believes that both of the options 

for analog screens under consideration in the proposed rule will result in fewer burdens on small 

movie theater businesses with analog screens. 

As noted earlier in this Initial RA prepared for this rule (see Section 1), the Department’s title 

III regulation implementing title III’s auxiliary aids provision reiterates the obligation of covered 

entities to ensure effective communication with individuals with disabilities and identifies, 

among other things, open captioning, closed captioning, and audio recordings as examples of 

auxiliary aids and services. 28 CFR 36.303(a)-(c). Recent technological changes in the movie 

theater industry—including wide-spread conversion from analog (film) projection to digital 

 

40 Please see the NPRM for the full Initial Regulatory Flexibility Analysis, which includes questions for public 

comment. 

41 See U.S. Small Business Administration, Table of Small Business Size Standards Matched to North American 

Industry Classification System Codes. July 22, 2013. 
60 | Page

cinema systems—make exhibition of captioned and audio-described movies easier and less 

costly than before. In addition, at this time nearly all first run motion pictures released by the 

major domestic movie studios include closed captioning (and to a lesser extent, audio 

description). Despite this, patrons who are deaf or hard of hearing or are blind or have low 

vision are often shut out from the movie-going experience and cannot fully take part in moviegoing outings with family or friends, join in social conversations about recent movie releases, or 

otherwise participate in a meaningful way in an important aspect of American culture, because 

movie theaters do not consistently show those movies with the captioning or audio description. 

The Department is thus convinced that regulation is warranted at this time to explicitly 

require movie theaters to exhibit movies with closed captioning and audio description at all times 

and for all showings whenever movies are produced, distributed, or otherwise made available 

with captioning and audio description unless to do so would result in an undue burden or 

fundamental alteration.

8.2 Objective of Proposed Rule 

The proposed rule for captioning and audio description rests on the existing obligation of 

title III-covered facilities—such as movie theaters—to ensure that persons with disabilities 

receive “full and equal enjoyment” of their respective goods and services, including, as needed, 

the provision of auxiliary aids and services for persons who are deaf or hard of hearing or blind 

or have low vision. The proposed rule states that a movie theater owner or operator is required 

to exhibit movies with closed captioning and/or audio description for all screenings so long as 

the movie has been produced by the movie studio or distributor with captioning or audio 

description (unless doing so would result in an undue burden or fundamental alteration). The 

proposed rule imposes no independent obligation on movie theaters to provide captions and 

audio description if the movie is not available with these features.

The Department expects that implementation of the proposed rule will lead to consistent 

levels of accessibility in movie theaters across the country, and that patrons who are deaf, hardof-hearing, blind, or have low vision will be able to use captioning and/or audio description 

equipment to better understand movies being exhibited in all movies theaters. 

8.3 Small Business Movie Theaters 

The Regulatory Flexibility Act defines a “small entity” as a small business (as defined by 

the Small Business Administration Size Standards) or a small organization such as a nonprofit 

that is “independently owned and operated” and is “not dominant in its field.” For motion 

picture theaters (NAICS Code 512131), small businesses comprise the vast majority of firms in 

the industry. The current size standard for a small movie theater business is $35.5 million dollars 

in annual revenue. 
61 | Page

The latest data that includes detailed breakouts by industry and annual revenue are from 

the 2007 Economic Census.42 Data for Motion Picture Theaters (except Drive-Ins) from the 

2007 Economic Census is available on both the Small Business Administration’s Web site and 

the Census Bureau’s American FactFinder Web site.43 Although both datasets are from the 2007 

Economic Census, the two datasets contain different estimates of the total number of Motion 

Picture Theaters. Each dataset is organized to have advantages over the other: the SBA dataset 

includes a greater number of revenue categories, but the dataset from Census’ FactFinder

separates firms that only operated part of the year from those that operated all year. The SBA 

dataset also has a larger proportion of firms in the lowest revenue categories than the Census 

FactFinder dataset.44

Given differences between the two datasets, the calculations for this analysis have been 

prepared separately using each dataset. For simplicity of presentation, this IRFA presents the 

tables showing interim calculations (

 

Table 38 and Table 41) using the dataset from SBA’s Web 

site only. The table of summary statistics, Table 42, includes estimates calculated using both 

databases and presented as ranges. Discussions of the range of the rule’s potential impact under 

Option 1 for small movie theater companies draw from findings using both datasets.

In 2007, approximately 98 percent of movie theater firms met the standard for small 

business, and these firms managed approximately 53 percent of movie theater establishments

(calculated using the dataset from SBA’s website).

45

Table 38

 Data from the 2007 Economic Census and 

downloaded from SBA’s Web site, report that 2,004 movie theater firms operated 4,801 

establishments that year; of those 2,004 movie theater firms, approximately 1,965 would meet 

the current SBA standard for a small business ( ). These 1,965 firms operated 2,566 

establishments.46

 

42 The U.S. Small Business Administration’s Office of Advocacy partially funds the Census Bureau to produce data 

on employer firm size including the number of firms, number of establishments, employment, and annual payroll 

and annual sales/receipts/revenue for employment size of firm categories by location and industry as part of the 

Economic Census. 

43 SBA’s dataset is available on its page for “Firm Size Data” available at http://www.sba.gov/advocacy/849/12162

(last visited, July 10, 2014). Detailed data by revenue group is in the excel file under the U.S. Static data section, 

labeled: “• U.S. data including multiple tables (Microsoft Excel file).” and on the tab labeled “us_rec_detail_ind07.” 

The dataset from Census can be downloaded from Census’ American FactFinder website, available at

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml, by selecting “Advanced Search,” then “Show Me All” 

and under Section 1, entering the topic EC0751SSZ4. (Both datasets last visited June 11, 2014.)

44 Additional detail on these differences in the datasets is available in the Appendix.

45 The size standard of $35.5 million can be found in Table of Small Business Size Standards Matched to North 

American Industry Classification System Codes. U. S. Small Business Administration. July 22, 2013. 

46 The dataset downloaded from American FactFinder had fewer firms and establishments: 1,724 firms operating 

4,554 establishments. 
62 | Page

Table 38: Distribution of Movie Theater Firms, by Revenue, 2007

Number 

of firms

Number 

of 

establishments

Firms as 

% of 

TOTAL 

Cumulative 

total

Establishments % 

of TOTAL 

Cumulative 

total

Total Firms 2,004 4,801 100% -- 100% --

Firms with sales/receipts/revenue 

less than $100,000 333 333 16.6% 16.6% 6.9% 6.9%

Firms with sales/receipts/revenue 

of $100,000 to $499,999 703 712 35.1% 51.7% 14.8% 21.8%

Firms with sales/receipts/revenue 

of $500,000 to $999,999 318 339 15.9% 67.6% 7.1% 28.8%

Firms with 

sales/receipts/revenue of 

$1,000,000 to $2,499,999

386 472 19.3% 86.8% 9.8% 38.7%

Firms with sales/receipts/revenue 

of $2,500,000 to $4,999,999 109 197 5.4% 92.3% 4.1% 42.8%

Firms with sales/receipts/revenue 

of $5,000,000 to $7,499,999 40 99 2.0% 94.3% 2.1% 44.8%

Firms with sales/receipts/revenue 

of $7,500,000 to $9,999,999 24 60 1.2% 95.5% 1.2% 46.1%

Firms with sales/receipts/revenue 

of $10,000,000 to $14,999,999 23 106 1.1% 96.6% 2.2% 48.3%

Firms with sales/receipts/revenue 

of $15,000,000 to $19,999,999 13 105 0.6% 97.3% 2.2% 50.5%

Firms with sales/receipts/revenue 

of $20,000,000 to $24,999,999 6 50 0.3% 97.6% 1.0% 51.5%

Firms with sales/receipts/revenue 

of $25,000,000 to $29,999,999 8 79 0.4% 98.0% 1.6% 53.2%

Firms with sales/receipts/revenue 

of $30,000,000 to $34,999,999 2 14 0.1% 98.1% 0.3% 53.4%

Firms with sales/receipts/revenue 

of $35,000,000+* 39 2,235 1.9% 100.0% 46.6% 100.0%

Source: Number of firms and number of establishments from Small Business Administration, Statistics of U.S. 

Businesses, Business Dynamics Statistics, Business Employment Dynamics, and Nonemployer Statistics. 

http://www.sba.gov/advocacy/849/12162. (last visited July 10, 2014). Downloaded from SBA Web site 

December 2013.

As part of a larger movement within the film producing industry, nearly all (if not all) 

film production is moving to digital, and most movie theaters likely will convert to the digital 

format. Because of the cost of transitioning to digital, large firms are more likely to have already 

converted to digital, or plan to do so soon. For these same reasons, analog theaters are more 
63 | Page

likely to be small businesses. At the same time, per screen costs of captioning equipment are 

significantly higher for analog theaters than for digital theaters. 

While the first movie theaters were facilities with a single screen and auditorium, in 

recent years larger facilities are being built, some with a dozen or more auditoriums and screens 

each capable of showing movies at the same time. Yet, at this time, many single screen theaters 

remain open. The Initial RA prepared detailed costs estimates, over time, using four theater size 

categories based on data presented by the MPAA (see Section 4.3 of the Initial RA for greater 

detail on these categories). To estimate the costs to small businesses, this IRFA examined the 

percentages of small businesses, the distribution of theaters and screens by theater size type, and 

made estimations regarding the likely prevalence of small businesses among each size type (see 

Table 39). No Megaplexes are expected to be small businesses.

Table 39: Theaters by Type and Estimated Prevalence of Small Businesses

Theater Type

Projected 

Number of 

Theaters in 2015

Annual 

Growth Rate

Likelihood of Small 

Businesses

Megaplex – 16+ screens 718 2.0% No small businesses

Multiplex – 8-15 screens 1,893 2.0% Some small businesses

Miniplex – 2-7 screens 1,500 -4.2% Many small businesses

Single Screen – 1 screen 996 -4.2% Nearly all small businesses

TOTAL 5,107 ---

Source: Estimated using data for 2008-2012 as in MPAA’s Theatrical Market Statistics – 2012.

The proposed rule does not apply different requirements to firms by size. It does, 

however, include Option 1 which would delay the compliance date for movie theaters with 

analog screens to four years after publication of the final rule (while theaters with digital 

screens must comply within six months). Theaters with analog projection are much more 

likely to be small businesses than theaters with digital projection.

8.4 Costs of Compliance47

While this small business assessment necessarily draws on the Initial RA’s “main” cost 

model, it also incorporates data specific to small businesses. As required by the Small Business 

Act and SBA regulations, the cost model underlying the Initial RA’s small business assessment 

uses SBA-defined small business size standards. The SBA data provided 18 different revenue 

 

47 This estimate of costs for small businesses assumes that the Department would proceed under Option 1 (four year 

compliance date for analog screens).
64 | Page

size categories, 12 of those categories for firms with estimated annual receipts of less than the 

$35.5 million size standard for a small firm in this industry (the dataset from Census’ FactFinder 

had 11 revenue categories). These 18 revenue size categories were consolidated into four

categories, with the following three meeting the SBA size standard for a small business: Firms 

with sales/receipts/revenue of (a) $499,999 and under; (b) $500,000-$4,999,999; and (c)

$5,000,000-$35,500,000. One of the 18 revenue categories in the SBA dataset (firms with 

sales/receipts/revenue of $30,000,000-$34,999,999) had only two firms included. To prevent the 

release of proprietary financial information, the SBA dataset only includes the number of firms 

and their establishments in this category; it does not include any information on sales/receipts or 

revenues. Therefore, while the estimate of the total number of small businesses that could be 

impacted by the proposed rule (in section 8.3, Small Business Movie Theaters) includes these 

two firms, the calculations for costs of compliance by revenue category in this section do not.

This SBA/U.S. Economic Census data, in turn, was incorporated into the Initial RA’s 

estimation for impacts on small businesses. First, receipt data was used to develop assumptions 

regarding the distribution of “small businesses” among the four theater size types. The 

assignment of theater size type is critical to the estimation because it determines the number of 

screens and, therefore, total costs per establishment. 

Using the Initial RA cost model estimation of the number of theaters by size type in 2015 

(Table 40), the IRFA distributed the number of establishments of small business movie theater 

firms beginning with all Single Screen establishments and then applied the remaining portion to 

Miniplex and Multiplex establishments (Table 40).

Table 40: 2015 Distribution of Theaters (Model Projection)

Theater Size Type Number of Theaters Percentage

Megaplex 718 14.1%

Multiplex 1,893 37.1%

Miniplex 1,500 29.4%

Single Screen 996 19.5%

TOTAL 5,107 100%

For this distribution, Single Screen theaters made up 89.6% of establishments in the 

smallest revenue category. The remaining establishments in this category were assumed to be 

Miniplexes. All of the establishments with receipts between $500,000 and $4,999,999 were 

assumed to be Miniplex theaters. After allocating those theaters to the two smaller revenue 

categories, the remaining Miniplex theaters estimated for 2015 were distributed to the largest

revenue category. Because there were more theaters in the largest revenue category than the 

remaining estimated Miniplex theaters, the other theaters in this revenue category were assumed 

to be all Multiplexes (approximately 41 percent). These distributions are summarized in Table 
65 | Page

41. These distributions were then used to estimate the average cost per firm in each of the three 

consolidated small business revenue categories.

Table 41: Distribution of Theater Size Type for Consolidated Revenue Groups

Consolidated Revenue Group48 Theater Size Type

$499,999 and under 89.6% Single Screen, 10.4% Miniplexes

$500,000-$4,999,999 100% Miniplexes

$5,000,000 to $35,500,000 58.8% Miniplexes; 41.2% Multiplexes

Using the average costs per theater developed in the Initial RA (see Section 4.11), we 

were able to calculate the average costs per theater and per firm for the three consolidated 

revenue groups ($499,999 and under; $500,000-$4,999,999; and $5,000,000-$35,500,000). 

Costs were first calculated on a per-establishment basis, and then using the average number of 

establishments per firm for each of the three consolidated revenue groups, translated into an 

average per firm cost. This cost was then compared to the average receipts per firm for that 

consolidated revenue group.

The resulting ratio of average costs to average receipts ranges from a low of 0.7 percent 

(for digital firms with revenues of $5,000,000 to $35,500,000) to a high of 5.7 percent (for 

analog firms with revenues of $499,999 or less) (Table 42). The impact on firms with digital 

projection is comparatively smaller than the impact on firms maintaining analog projection. The 

ratio of average costs/receipts is estimated to range from 0.7 percent to 2.1 percent for all movie 

theater companies using digital systems. In contrast, the same ratio ranges from 2.0 percent to 

5.7 percent for all firms using analog projection.

 

48 The distribution is slightly different using the dataset from FactFinder: For firms with revenue $499,999 and 

under, 100% were assumed to be Single Screen; for those with revenue $500,000-$4,999,999, 7% were Single 

Screens and 93% Miniplexes; for those with revenue $25,000,000 to $35,5000,000, 79% were Miniplexes and 21% 

Multiplexes.
66 | Page

Table 42: Estimation of Costs for Small Digital Movie Theaters, By Firm Size, Based on 

2015 Size/Revenue Distribution

Cost Firms $499,999 and 

under

Firms $500,000 to 

$4,999,999

Firms $5,000,000 to 

$35,500,000**

Average receipts per firm* $188,384 to $201,973 $1,471,549 to 

$1,484,995

$9,705,377 to 

$12,437,259

Average cost per theater* $3,198 to $3,966 $10,063 to $10,586 $13,984 to $17,281

Average cost per firm* $3,233 to $3,992 $12,539 to $14,454 $81,176 to $103,309

Ratio of average cost/receipts* 1.6% to 2.1% 0.8% to 1.0% 0.7% to 1.1%

Table 43: Estimation of Costs for Small Analog Movie Theaters, By Firm Size, Based on 

2015 Size/Revenue Distribution

Cost Firms $499,999 and 

under

Firms $500,000 to 

$4,999,999

Firms $5,000,000 to 

$35,500,000**

Average receipts per firm* $188,384 to $201,973 $1,471,549 to 

$1,484,995

$9,705,377 to 

$12,437,259

Average cost per theater* $8,172 to $10,638 $30,204 to $31,884 $43,449 to $54,673

Average cost per firm* $8,263 to $10,706 $37,638 to $43,534 $252,224 to $326,844

Ratio of average cost/receipts* 4.1% to 5.7% 2.5% to 3.0% 2.0% to 3.4%

*The ranges represent the figures calculated using the two datasets created from data from the 2007 Economic 

Census, which breaks out data by revenue category (downloaded from SBA’s Web site and the Census Bureau’s 

American FactFinder Web site, respectively), but which differ slightly. Note that the composition of theater size 

types also varies per revenue group depending on the dataset used, and therefore the average cost per theater 

varies as well.

** Note that the calculations for this category using the dataset downloaded from the SBA Web site do not include 

any data for the two firms in the revenue category for firms with sales/receipts/revenue of $30,000,000-

$34,999,999 because no data on annual receipts for those two firms was included. The dataset downloaded from 

American FactFinder had different revenue categories from those downloaded from SBA’s Web site. To estimate 

those firms meeting the SBA size standards using the dataset downloaded from the American FactFinder Web site, 

all the firms with revenues less than $25 million, and half of those with revenues from $25,000,000 to $49,999,999

were counted as a way of estimating the number of entities that fall under $35.5 million within that revenue 

category.

Note: See Appendix for greater detail on calculations.

8.5 Alternatives

The Department considered multiple alternatives for this rulemaking with a focus on 

choosing the alternative that best balances the requirements of the ADA with the potential costs 

to small business movie theaters. Among those alternatives weighed most heavily for the 

proposed rule are the three discussed below. (Annual estimates are provided in the Appendix.)
67 | Page

Requiring only 50 Percent of Screens to Have Closed Captioning and Audio Description

The Department considered proposing limiting the requirement for closed captioning and 

audio description to only 50 percent of movie screens in each theater. This alternative was 

discussed in the July 26, 2010, ANPRM. Because the ADA requires places of public 

accommodation “to ensure that no individual with a disability is excluded, denied services, 

segregated or otherwise treated differently than other individuals because of the absence of 

auxiliary aids and services, unless the entity can demonstrate that taking such steps would 

fundamentally alter the nature of the good, service, facility, privilege, advantage, or 

accommodation being offered or would result in an undue burden,” 42 U.S.C. 

§12182(b)(2)(A)(iii), it would be inappropriate to only require access to 50 percent of movies 

being shown. After considering public comment and additional research, the Department has 

determined that it is not feasible for movie theaters to meet their ADA obligation to provide 

equally effective communication to patrons with hearing and vision disabilities unless they have 

the capacity to show the movies that are available with captions and audio description at all 

showings when those same movies are available to patrons without disabilities. Unless a movie 

theater showed every movie on two screens in comparable auditoriums at all times—one screen 

showing the captioned and audio described version and the other showing the same movie 

without captions and audio description—the Department is concerned that a 50 percent 

requirement would regularly lead to the circumstance where a movie theater would have a 

captioned or audio described movie, but would have no screen available on which to show it 

because all the appropriately equipped auditoriums were otherwise in use. 

The Department considered whether it would be possible for movie theaters to meet their 

effective communication obligations by switching movies into auditoriums equipped to show 

movies with closed captions and audio description when a patron with a hearing or vision 

disability needed those accessibility features. But, the Department’s research indicated that the 

business agreements regarding movie exhibitions limit this type of flexibility. Movie theaters 

regularly negotiate with film distributors regarding which auditoriums in a theater with more 

than one screen will show which films. Generally, if a film is expected to be very popular, it will 

open in the largest auditorium or in several auditoriums within the same complex. As the 

popularity decreases, the film will be moved from larger auditoriums to smaller auditoriums and 

from multiple auditoriums to a single auditorium. The timing of such moves will vary from 

theater to theater and from film to film.

Those theaters that do have the flexibility to switch auditoriums upon request to provide 

closed captioning or audio description would have other added costs associated with changing 

the auditoriums for showings. Costs could include the additional employee time and resources 

needed to physically switch the movie from one auditorium to another, as well as potential lost 

ticket sales if a more popular movie is displaced into a much smaller theater that sells out faster. 

Additionally, switching auditoriums to allow use of captioning or audio description equipment 
68 | Page

may result in auditorium changes for other patrons after they had purchased tickets and are 

possibly already seated. This would result in an inconvenience to many patrons, including the 

possibility that the switch would result in a different viewing experience than expected when 

purchasing a ticket due to differing auditorium sizes and comfort levels. 

Importantly, the Department also believes that this alternative would carry a much higher 

litigation risk. Patrons with disabilities would not have any way of assessing whether the failure 

to show a particular movie with closed captions and audio description was because the theater 

was failing to comply with its obligations under the regulation to provide these auxiliary aids and 

services or because that particular movie was not available with closed captions or audio 

description. Whether a theater had the capacity to move a film to accommodate a patron with a 

disability and should have done so upon request, or whether the theater did everything to meet its 

obligations under the regulation, would become murky and create confusion that could result in 

an increased risk of litigation.

Finally, this alternative favors larger movie theaters and disadvantages single screen 

theaters, which are more likely to be all small businesses. Under the 50 percent requirement, at 

least one auditorium at every theater must have closed captioning and audio description 

capabilities. Thus, single screen theaters would see no reduction in costs under this alternative. 

As such, the Department has rejected this alternative due to concerns that requiring only 

50 percent of screens to have closed captioning and audio description capabilities would not 

comply with the ADA itself, that such a proposal would require substantial changes to the movie 

theater business model, that the initial perceptions that this approach would have substantially 

lower total costs are actually misleading, and that this approach would not address in any 

meaningful way the concerns for small business single screen theaters.

Compliance by Analog Theaters Required in Two Years 

The Department considered providing theaters with analog screens two years after the 

rule’s publication date to become compliant, as opposed to the six months compliance date 

provided for digital screens. This delay was considered for analog movie screens because such a 

large number of theaters are in the midst of transitioning to digital cinema, that additional time 

might be necessary. In addition, the delayed compliance date would allow small theaters that 

remain analog more time to obtain the necessary resources to purchase the equipment to provide 

closed captioning and audio description. The 15-year, discounted costs for this alternative range 

from $189.4 million to $237.5 million under a 7 percent discount rate, which are higher than the 

total costs for the proposed rule. 

Upon review of the higher cost burden for firms still using analog projection and with 

consultation from the Small Business Administration’s Office of Advocacy, and as previously 

discussed, the Department is considering two alternative options: (1) a four-year compliance 

date for theaters with analog screens (Option 1); or (2) deferring compliance for analog screens
69 | Page

until a later date (Option 2). In making the decision, the Department also took into consideration 

the fact that those movie theaters that have not yet made the transition to digital systems are 

more likely to be small businesses than those movie theaters that are already exhibiting in digital 

format. The Department also considered the fact that movie studios are in the process of phasing 

out analog film, and it is anticipated that by 2015, studios will not be producing analog prints of 

first run films. On the basis of this information, it appears likely that movie theaters that rely on 

first run films for revenue will either convert to digital or go out of business before the four year 

compliance date (sometime in 2018 or 2019), and thus there will actually be many fewer analog 

theaters that will need to comply with the rule if the Department proceeded under Option 1. If the 

Department decides to adopt Option 2 for the final rule and defer application of the requirements 

of the rule for analog screens, the costs for small businesses will be significantly less since the 

rule will only apply to small business digital theaters.). 
70 | Page

Table 44: Movie Theater Firms, Establishments and Receipts by Revenue Category, as Percent of Totals

Number of 

firms

Number of 

establishments

Receipts 

($1,000)

Number of 

firms as % of 

TOTAL*

Cumulative 

total**

Number of 

establishments % of 

TOTAL***

Cumulative 

total****

Total Firms 2,004 4,801 12,391,925 100% -- 100% --

Firms with sales/receipts/revenue less 

than $100,000 333 333 17,404 16.60% -- 6.90% --

Firms with sales/receipts/revenue of 

$100,000 to $499,999 703 712 177,762 35.10% 51.70% 14.80% 21.80%

Firms with sales/receipts/revenue of 

$500,000 to $999,999 318 339 226,243 15.90% 67.60% 7.10% 28.80%

Firms with sales/receipts/revenue of 

$1,000,000 to $2,499,999 386 472 610,584 19.30% 86.80% 9.80% 38.70%

Firms with sales/receipts/revenue of 

$2,500,000 to $4,999,999 109 197 359,542 5.40% 92.30% 4.10% 42.80%

Firms with sales/receipts/revenue of 

$5,000,000 to $7,499,999 40 99 235,543 2.00% 94.30% 2.10% 44.80%

Firms with sales/receipts/revenue of 

$7,500,000 to $9,999,999 24 60 190,897 1.20% 95.50% 1.20% 46.10%

Firms with sales/receipts/revenue of 

$10,000,000 to $14,999,999 23 106 228,332 1.10% 96.60% 2.20% 48.30%

Firms with sales/receipts/revenue of 

$15,000,000 to $19,999,999 13 105 182,585 0.60% 97.30% 2.20% 50.50%

Firms with sales/receipts/revenue of 

$20,000,000 to $24,999,999 6 50 97,729 0.30% 97.60% 1.00% 51.50%

Firms with sales/receipts/revenue of 

$25,000,000 to $29,999,999 8 79 171,327 0.40% 98.00% 1.60% 53.20%

Firms with sales/receipts/revenue of 

$30,000,000 to $34,999,999 2 14 n/a 0.10% 98.10% 0.30% 53.40%
71 | Page

Number of 

firms

Number of 

establishments

Receipts 

($1,000)

Number of 

firms as % of 

TOTAL*

Cumulative 

total**

Number of 

establishments % of 

TOTAL***

Cumulative 

total****

Firms with sales/receipts/revenue of 

$35,000,000+* 39 2,235 n/a 1.90% 100.00% 46.60% 100.00%

*Calculated by dividing the value in “Number of firms” for that size category by the total Number of firms (which is 2,004). 

** Calculated by adding percentage in the column to the right to the cumulative values preceding.

*** Calculated by dividing the value in “Number of establishments” for that size category by the total Number of establishments (which is 4,801).

**** Calculated by adding percentage in the column to the right to the cumulative values preceding.

Source: Number of firms, Number of establishments, and Receipts ($1,000) from Small Business Administration, Statistics of U.S. Businesses, Business Dynamics 

Statistics, Business Employment Dynamics, and Nonemployer Statistics. http://www.sba.gov/advocacy/849/12162 (last visited July 10, 2014). Downloaded 

from SBA Web site December 2013.
72 | Page

9. Appendix
APPENDIX

Pg. 73

OPTION 1: ANNUAL COSTS FOR ALL THEATERS, FOR EACH BASELINE

One-Screen Per Theater

Baseline

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $131.2 $60.7 $1.2 $1.2 $1.1 $4.7 $9.1 $8.6 $4.3 $1.7 $5.3 $14.9 $7.8 $4.7 $3.2 $2.7

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Digital Total $186.2 $77.9 $3.9 $3.7 $3.5 $7.4 $12.1 $11.5 $6.6 $3.7 $8.2 $20.9 $10.8 $6.8 $5.0 $4.4

Total Compliance Costs 

(Digital and Analog) $225.9 $77.9 $3.9 $3.7 $30.6 $8.1 $12.8 $12.1 $7.2 $4.4 $8.9 $21.4 $11.2 $7.1 $6.6 $9.9

Litigation-Based Baseline

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $97.2 $41.6 $1.2 $1.2 $1.1 $3.9 $7.4 $7.0 $3.6 $1.6 $3.9 $9.5 $5.9 $4.0 $2.8 $2.4

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Digital Total $152.2 $58.8 $3.9 $3.7 $3.5 $6.6 $10.4 $9.9 $5.9 $3.6 $6.8 $15.6 $8.9 $6.0 $4.6 $4.1

Total Compliance Costs 

(Digital and Analog) $191.9 $58.8 $3.9 $3.7 $30.6 $7.3 $11.1 $10.5 $6.6 $4.3 $7.5 $16.0 $9.3 $6.4 $6.2 $9.7
APPENDIX

Pg. 74

OPTION 1: ANNUAL COSTS FOR ALL THEATERS, FOR EACH BASELINE (CONTINUED)

NATO-Based Baseline

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $83.1 $34.0 $1.2 $1.2 $1.1 $3.5 $6.4 $6.2 $3.3 $1.6 $3.4 $7.7 $5.1 $3.6 $2.6 $2.3

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Digital Total $138.1 $51.2 $3.9 $3.7 $3.5 $6.2 $9.5 $9.0 $5.6 $3.5 $6.3 $13.8 $8.1 $5.6 $4.4 $4.0

Total Compliance Costs 

(Digital and Analog) $177.8 $51.2 $3.9 $3.7 $30.6 $6.9 $10.1 $9.6 $6.2 $4.3 $6.9 $14.2 $8.5 $6.0 $6.0 $9.5

OPTION 1: ANNUAL COSTS FOR ANALOG THEATERS ONLY

Analog Total Costs

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discounted Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Analog Captioning $31.1 $0.0 $0.0 $0.0 $24.4 $0.0 $0.0 $0.0 $0.1 $0.2 $0.2 $0.1 $0.0 $0.0 $1.2 $4.9

Analog Assisted Listening $2.7 $0.0 $0.0 $0.0 $2.0 $0.0 $0.0 $0.0 $0.0 $0.1 $0.1 $0.0 $0.0 $0.0 $0.1 $0.4

Analog O&M $5.8 $0.0 $0.0 $0.0 $0.8 $0.7 $0.7 $0.6 $0.5 $0.5 $0.4 $0.4 $0.3 $0.3 $0.3 $0.2

Analog Total Costs $39.7 $0.0 $0.0 $0.0 $27.1 $0.7 $0.7 $0.6 $0.7 $0.8 $0.7 $0.5 $0.4 $0.4 $1.6 $5.6
APPENDIX

Pg. 75

OPTION 2: ANNUAL COSTS FOR ALL DIGITAL THEATERS FOR EACH BASELINE 

One-Screen Per Theater 

Baseline 

(No Analog)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $131.2 $60.7 $1.2 $1.2 $1.1 $4.7 $9.1 $8.6 $4.3 $1.7 $5.3 $14.9 $7.8 $4.7 $3.2 $2.7

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Total Compliance Costs $186.2 $77.9 $3.9 $3.7 $3.5 $7.4 $12.1 $11.5 $6.6 $3.7 $8.2 $20.9 $10.8 $6.8 $5.0 $4.4

Litigation-Based Baseline

(No Analog)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $97.2 $41.6 $1.2 $1.2 $1.1 $3.9 $7.4 $7.0 $3.6 $1.6 $3.9 $9.5 $5.9 $4.0 $2.8 $2.4

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Total Compliance Costs $152.2 $58.8 $3.9 $3.7 $3.5 $6.6 $10.4 $9.9 $5.9 $3.6 $6.8 $15.6 $8.9 $6.0 $4.6 $4.1
APPENDIX

Pg. 76

OPTION 2: ANNUAL COSTS FOR ALL DIGITAL THEATERS, FOR EACH BASELINE (CONTINUED)

NATO-Based Baseline

(No Analog)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $83.1 $34.0 $1.2 $1.2 $1.1 $3.5 $6.4 $6.2 $3.3 $1.6 $3.4 $7.7 $5.1 $3.6 $2.6 $2.3

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Total Compliance Costs $138.1 $51.2 $3.9 $3.7 $3.5 $6.2 $9.5 $9.0 $5.6 $3.5 $6.3 $13.8 $8.1 $5.6 $4.4 $4.0
APPENDIX

Pg. 77

ALTERNATIVE 1: 50% COMPLIANCE

ANNUAL COSTS FOR ALL THEATERS (50% COMPLIANCE), FOR EACH BASELINE 

One-Screen Per Theater 

Baseline (50% Compliance)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $57.8 $26.3 $0.6 $0.6 $0.5 $2.0 $3.9 $3.7 $1.9 $0.8 $2.4 $6.7 $3.5 $2.1 $1.5 $1.3

Digital Audio Description $14.1 $7.4 $0.1 $0.1 $0.1 $0.3 $0.5 $0.5 $0.3 $0.1 $0.7 $2.3 $0.8 $0.3 $0.2 $0.2

Digital O&M $20.5 $1.9 $1.8 $1.7 $1.6 $1.6 $1.5 $1.4 $1.3 $1.3 $1.2 $1.1 $1.1 $1.0 $1.0 $0.9

Digital Total $92.4 $35.7 $2.5 $2.4 $2.3 $3.9 $5.9 $5.6 $3.5 $2.2 $4.3 $10.1 $5.3 $3.5 $2.7 $2.4

Total Compliance Costs 

(Digital and Analog) $117.5 $35.7 $2.6 $2.4 $18.2 $4.6 $6.5 $6.2 $4.1 $2.9 $4.8 $10.5 $5.7 $3.8 $3.7 $5.7

Litigation-Based Baseline

(50% Compliance)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $49.3 $21.2 $0.6 $0.6 $0.5 $2.0 $3.7 $3.6 $1.8 $0.8 $2.0 $4.8 $3.0 $2.0 $1.4 $1.2

Digital Audio Description $14.1 $7.4 $0.1 $0.1 $0.1 $0.3 $0.5 $0.5 $0.3 $0.1 $0.7 $2.3 $0.8 $0.3 $0.2 $0.2

Digital O&M $20.5 $1.9 $1.8 $1.7 $1.6 $1.6 $1.5 $1.4 $1.3 $1.3 $1.2 $1.1 $1.1 $1.0 $1.0 $0.9

Digital Total $83.8 $30.5 $2.5 $2.4 $2.3 $3.9 $5.8 $5.5 $3.4 $2.2 $3.8 $8.2 $4.9 $3.4 $2.6 $2.4

Total Compliance Costs 

(Digital and Analog) $108.9 $30.5 $2.6 $2.4 $18.2 $4.6 $6.4 $6.1 $4.0 $2.9 $4.4 $8.7 $5.2 $3.7 $3.7 $5.6
APPENDIX

Pg. 78

ANNUAL COSTS FOR ALL THEATERS (50% COMPLIANCE), FOR EACH BASELINE (CONTINUED)

NATO-Based Baseline

(50% Compliance)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $42.2 $17.4 $0.6 $0.6 $0.5 $1.8 $3.3 $3.1 $1.7 $0.8 $1.7 $3.9 $2.6 $1.8 $1.3 $1.2

Digital Audio Description $14.1 $7.4 $0.1 $0.1 $0.1 $0.3 $0.5 $0.5 $0.3 $0.1 $0.7 $2.3 $0.8 $0.3 $0.2 $0.2

Digital O&M $20.5 $1.9 $1.8 $1.7 $1.6 $1.6 $1.5 $1.4 $1.3 $1.3 $1.2 $1.1 $1.1 $1.0 $1.0 $0.9

Digital Total $76.8 $26.7 $2.5 $2.4 $2.3 $3.6 $5.3 $5.0 $3.3 $2.2 $3.6 $7.3 $4.5 $3.2 $2.5 $2.3

Total Compliance Costs 

(Digital and Analog) $101.9 $26.8 $2.6 $2.4 $18.2 $4.4 $5.9 $5.6 $3.9 $2.8 $4.1 $7.8 $4.8 $3.5 $3.6 $5.6

ANNUAL COSTS FOR ANALOG THEATERS ONLY (50% COMPLIANCE)

Analog Total Costs 

(50% Compliance)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discounted Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Analog Captioning $17.8 $0.0 $0.0 $0.0 $13.9 $0.0 $0.0 $0.0 $0.1 $0.1 $0.1 $0.0 $0.0 $0.0 $0.7 $2.8

Analog Assisted Listening $1.6 $0.0 $0.0 $0.0 $1.2 $0.0 $0.0 $0.0 $0.0 $0.1 $0.0 $0.0 $0.0 $0.0 $0.1 $0.2

Analog O&M $5.7 $0.0 $0.0 $0.0 $0.8 $0.7 $0.6 $0.6 $0.5 $0.5 $0.4 $0.4 $0.3 $0.3 $0.3 $0.2

Analog Total Costs $25.1 $0.0 $0.0 $0.0 $15.9 $0.7 $0.6 $0.6 $0.6 $0.6 $0.6 $0.4 $0.3 $0.3 $1.0 $3.3
APPENDIX

Pg. 79

ALTERNATIVE 2: 2-YEAR DELAY FOR ANALOG THEATERS

ANNUAL COSTS FOR ALL THEATERS (2 YEAR ANALOG DELAY), FOR EACH BASELINE 

One-Screen Per Theater 

Baseline 

(2 Year Analog Delay)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $131.2 $60.7 $1.2 $1.2 $1.1 $4.7 $9.1 $8.6 $4.3 $1.7 $5.3 $14.9 $7.8 $4.7 $3.2 $2.7

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Digital Total $186.2 $77.9 $3.9 $3.7 $3.5 $7.4 $12.1 $11.5 $6.6 $3.7 $8.2 $20.9 $10.8 $6.8 $5.0 $4.4

Total Compliance Costs 

(Digital and Analog) $237.5 $77.9 $37.7 $4.6 $4.3 $8.1 $12.9 $12.5 $7.4 $4.3 $8.7 $21.4 $12.8 $13.7 $6.6 $4.7

Litigation-Based Baseline

(2 Year Analog Delay)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $97.2 $41.6 $1.2 $1.2 $1.1 $3.9 $7.4 $7.0 $3.6 $1.6 $3.9 $9.5 $5.9 $4.0 $2.8 $2.4

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Digital Total $152.2 $58.8 $3.9 $3.7 $3.5 $6.6 $10.4 $9.9 $5.9 $3.6 $6.8 $15.6 $8.9 $6.0 $4.6 $4.1

Total Compliance Costs 

(Digital and Analog) $203.5 $58.8 $37.7 $4.6 $4.3 $7.3 $11.2 $10.9 $6.8 $4.2 $7.2 $16.0 $10.9 $12.9 $6.2 $4.4
APPENDIX

Pg. 80

ANNUAL COSTS FOR ALL THEATERS (2 YEAR ANALOG DELAY), FOR EACH BASELINE (CONTINUED)

NATO-Based Baseline

(2 Year Analog Delay)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $83.1 $34.0 $1.2 $1.2 $1.1 $3.5 $6.4 $6.2 $3.3 $1.6 $3.4 $7.7 $5.1 $3.6 $2.6 $2.3

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $27.1 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 $1.9 $1.8 $1.7 $1.6 $1.5 $1.4 $1.4 $1.3 $1.2

Digital Total $138.1 $51.2 $3.9 $3.7 $3.5 $6.2 $9.5 $9.0 $5.6 $3.5 $6.3 $13.8 $8.1 $5.6 $4.4 $4.0

Total Compliance Costs 

(Digital and Analog) $189.4 $51.2 $37.7 $4.6 $4.3 $6.9 $10.3 $10.0 $6.4 $4.1 $6.7 $14.2 $10.1 $12.6 $6.0 $4.2

ANNUAL COSTS FOR ANALOG THEATERS ONLY (2 YEAR ANALOG DELAY)

Analog Total Costs 

(2 Year Analog Delay)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discounted Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Analog Captioning $40.1 $0.0 $30.4 $0.0 $0.0 $0.0 $0.1 $0.2 $0.2 $0.1 $0.0 $0.0 $1.5 $6.2 $1.2 $0.0

Analog Assisted Listening $3.5 $0.0 $2.5 $0.0 $0.0 $0.0 $0.0 $0.1 $0.1 $0.0 $0.0 $0.0 $0.1 $0.4 $0.1 $0.0

Analog O&M $7.7 $0.0 $1.0 $0.9 $0.8 $0.7 $0.7 $0.6 $0.5 $0.5 $0.4 $0.4 $0.3 $0.3 $0.3 $0.2

Analog Total Costs $51.3 $0.0 $33.9 $0.9 $0.8 $0.7 $0.8 $0.9 $0.8 $0.6 $0.4 $0.4 $2.0 $6.9 $1.6 $0.3
APPENDIX

Pg. 81

SENSITIVITY ANALYSIS: 5% O&M COST

ANNUAL COSTS FOR ALL THEATERS (5% O&M COST), FOR EACH BASELINE 

One-Screen Per Theater 

Baseline 

(5% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $131.2 $60.7 $1.2 $1.2 $1.1 $4.7 $9.1 $8.6 $4.3 $1.7 $5.3 $14.9 $7.8 $4.7 $3.2 $2.7

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $45.2 $4.2 $4.0 $3.8 $3.6 $3.4 $3.3 $3.1 $2.9 $2.8 $2.7 $2.5 $2.4 $2.3 $2.2 $2.1

Digital Total (Option 2 Total 

Costs) $204.3 $79.6 $5.5 $5.2 $4.9 $8.7 $13.4 $12.8 $7.8 $4.8 $9.3 $21.9 $11.8 $7.7 $5.8 $5.2

Total Compliance Costs 

(Option 1 Total Costs) $247.8 $79.6 $5.5 $5.2 $32.6 $10.0 $14.5 $13.7 $8.8 $5.9 $10.3 $22.6 $12.3 $8.2 $7.6 $10.9

Litigation-Based Baseline

(5% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $97.2 $41.6 $1.2 $1.2 $1.1 $3.9 $7.4 $7.0 $3.6 $1.6 $3.9 $9.5 $5.9 $4.0 $2.8 $2.4

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $45.2 $4.2 $4.0 $3.8 $3.6 $3.4 $3.3 $3.1 $2.9 $2.8 $2.7 $2.5 $2.4 $2.3 $2.2 $2.1

Digital Total (Option 2 Total 

Costs) $170.3 $60.5 $5.5 $5.2 $4.9 $8.0 $11.7 $11.2 $7.1 $4.7 $7.9 $16.6 $9.9 $6.9 $5.4 $4.9

Total Compliance Costs 

(Option 1 Total Costs) $213.8 $60.5 $5.5 $5.2 $32.6 $9.2 $12.8 $12.1 $8.1 $5.8 $8.8 $17.3 $10.5 $7.5 $7.2 $10.6
APPENDIX

Pg. 82

ANNUAL COSTS FOR ALL THEATERS (5% O&M COST), FOR EACH BASELINE (CONTINUED)

NATO-Based Baseline

(5% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $83.1 $34.0 $1.2 $1.2 $1.1 $3.5 $6.4 $6.2 $3.3 $1.6 $3.4 $7.7 $5.1 $3.6 $2.6 $2.3

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $45.2 $4.2 $4.0 $3.8 $3.6 $3.4 $3.3 $3.1 $2.9 $2.8 $2.7 $2.5 $2.4 $2.3 $2.2 $2.1

Digital Total (Option 2 Total 

Costs) $156.2 $52.9 $5.5 $5.2 $4.9 $7.5 $10.8 $10.3 $6.8 $4.6 $7.3 $14.8 $9.1 $6.6 $5.2 $4.8

Total Compliance Costs 

(Option 1 Total Costs) $199.7 $52.9 $5.5 $5.2 $32.6 $8.8 $11.9 $11.3 $7.8 $5.7 $8.3 $15.5 $9.7 $7.1 $7.0 $10.5

ANNUAL COSTS FOR ANALOG THEATERS ONLY (5% O&M COST)

Analog Total Costs 

(5% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discounted Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Analog Captioning $31.1 $0.0 $0.0 $0.0 $24.4 $0.0 $0.0 $0.0 $0.1 $0.2 $0.2 $0.1 $0.0 $0.0 $1.2 $4.9

Analog Assisted Listening $2.7 $0.0 $0.0 $0.0 $2.0 $0.0 $0.0 $0.0 $0.0 $0.1 $0.1 $0.0 $0.0 $0.0 $0.1 $0.4

Analog O&M $9.7 $0.0 $0.0 $0.0 $1.3 $1.2 $1.1 $1.0 $0.9 $0.8 $0.7 $0.6 $0.6 $0.5 $0.5 $0.4

Analog Total Costs $43.5 $0.0 $0.0 $0.0 $27.7 $1.2 $1.1 $1.0 $1.0 $1.1 $1.0 $0.7 $0.6 $0.6 $1.8 $5.7
APPENDIX

Pg. 83

SENSITIVITY ANALYSIS: 8% O&M COST

ANNUAL COSTS FOR ALL THEATERS (8% O&M COST), FOR EACH BASELINE 

One-Screen Per Theater 

Baseline 

(8% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $131.2 $60.7 $1.2 $1.2 $1.1 $4.7 $9.1 $8.6 $4.3 $1.7 $5.3 $14.9 $7.8 $4.7 $3.2 $2.7

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $72.4 $6.7 $6.4 $6.1 $5.8 $5.5 $5.2 $4.9 $4.7 $4.5 $4.3 $4.0 $3.8 $3.7 $3.5 $3.3

Digital Total (Option 2 Total 

Costs) $231.5 $82.1 $7.9 $7.5 $7.1 $10.8 $15.3 $14.6 $9.5 $6.5 $10.9 $23.4 $13.2 $9.1 $7.1 $6.5

Total Compliance Costs 

(Option 1 Total Costs) $280.8 $82.2 $7.9 $7.5 $35.6 $12.8 $17.1 $16.2 $11.1 $8.0 $12.3 $24.5 $14.1 $9.9 $9.2 $12.4

Litigation-Based Baseline

(8% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $97.2 $41.6 $1.2 $1.2 $1.1 $3.9 $7.4 $7.0 $3.6 $1.6 $3.9 $9.5 $5.9 $4.0 $2.8 $2.4

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $72.4 $6.7 $6.4 $6.1 $5.8 $5.5 $5.2 $4.9 $4.7 $4.5 $4.3 $4.0 $3.8 $3.7 $3.5 $3.3

Digital Total (Option 2 Total 

Costs) $197.5 $63.0 $7.9 $7.5 $7.1 $10.0 $13.6 $13.0 $8.9 $6.4 $9.5 $18.1 $11.3 $8.3 $6.8 $6.2

Total Compliance Costs 

(Option 1 Total Costs) $246.8 $63.1 $7.9 $7.5 $35.6 $12.0 $15.4 $14.6 $10.4 $7.9 $10.8 $19.2 $12.2 $9.2 $8.8 $12.1
APPENDIX

Pg. 84

ANNUAL COSTS FOR ALL THEATERS (8% O&M COST), FOR EACH BASELINE (CONTINUED)

NATO-Based Baseline

(8% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year

14

Year 

15

Costs (7% Discount Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Digital Captioning $83.1 $34.0 $1.2 $1.2 $1.1 $3.5 $6.4 $6.2 $3.3 $1.6 $3.4 $7.7 $5.1 $3.6 $2.6 $2.3

Digital Audio Description $27.9 $14.7 $0.3 $0.3 $0.2 $0.6 $1.1 $1.0 $0.6 $0.3 $1.3 $4.5 $1.5 $0.7 $0.5 $0.4

Digital O&M $72.4 $6.7 $6.4 $6.1 $5.8 $5.5 $5.2 $4.9 $4.7 $4.5 $4.3 $4.0 $3.8 $3.7 $3.5 $3.3

Digital Total (Option 2 Total 

Costs) $183.4 $55.4 $7.9 $7.5 $7.1 $9.6 $12.7 $12.1 $8.5 $6.3 $8.9 $16.3 $10.5 $7.9 $6.5 $6.0

Total Compliance Costs 

(Option 1 Total Costs) $232.7 $55.5 $7.9 $7.5 $35.6 $11.6 $14.5 $13.7 $10.1 $7.9 $10.3 $17.4 $11.4 $8.8 $8.6 $12.0

ANNUAL COSTS FOR ANALOG THEATERS ONLY (8% O&M COST)

Analog Total Costs 

(8% O&M Cost)

2015 $ Millions TOTAL 

COST

Year 

1

Year 

2

Year 

3

Year 

4

Year 

5

Year 

6

Year 

7

Year 

8

Year 

9

Year 

10

Year 

11

Year 

12

Year 

13

Year 

14

Year 

15

Costs (7% Discounted Rate) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Analog Captioning $31.1 $0.0 $0.0 $0.0 $24.4 $0.0 $0.0 $0.0 $0.1 $0.2 $0.2 $0.1 $0.0 $0.0 $1.2 $4.9

Analog Assisted Listening $2.7 $0.0 $0.0 $0.0 $2.0 $0.0 $0.0 $0.0 $0.0 $0.1 $0.1 $0.0 $0.0 $0.0 $0.1 $0.4

Analog O&M $15.5 $0.1 $0.1 $0.0 $2.1 $2.0 $1.8 $1.6 $1.4 $1.3 $1.1 $1.0 $0.9 $0.8 $0.7 $0.7

Analog Total Costs $49.3 $0.1 $0.1 $0.0 $28.5 $2.0 $1.8 $1.6 $1.5 $1.5 $1.4 $1.1 $0.9 $0.9 $2.1 $5.9
APPENDIX

Pg. 85

DEVICE REPLACEMENT ANNUAL COSTS BY THEATER TYPE

Total

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Megaplex Theaters

Digital $23,345 $0 $0 $0 $2,106 $4,592 $4,292 $1,719 $241 $1,051 $2,128 $2,535 $1,887 $982 $723 $1,089

Multiplex Theaters

Digital $18,722 $0 $0 $0 $1,689 $3,683 $3,442 $1,379 $193 $843 $1,707 $2,033 $1,513 $788 $580 $873

Miniplex Theaters

Digital $7,930 $0 $0 $0 $715 $1,560 $1,458 $584 $82 $357 $723 $861 $641 $334 $245 $370

Analog* $1,526 $0 $0 $0 $0 $0 $0 $156 $341 $319 $128 $18 $78 $158 $188 $140

Single Screen Theaters

Digital $2,731 $0 $0 $0 $246 $537 $502 $201 $28 $123 $249 $297 $221 $115 $85 $127

Analog* $577 $0 $0 $0 $0 $0 $0 $59 $129 $121 $48 $7 $30 $60 $71 $53

*Analog Theaters are not required to have closed captioning and video description until the fourth year after the rule.
APPENDIX

Pg. 86

COST ESTIMATES FOR SONY GLASSES

Sony’s Entertainment Access Glasses and Audio Description receivers are a recent 

entrant into the market; first available in 2012. Sony’s Glasses have multiple capabilities;

including providing closed captioning to the wearer. Because Sony’s Glasses are a new and 

expensive product in a market when other less expensive and more established options are 

available (including similar glasses from USL), they have not been included in the main 

estimation. Instead, preliminary cost estimates for Sony glasses for their captioning capabilities 

are presented in this appendix

While the Sony hardware is only $500, the glasses are retailing (in mid-2013) for $1,250 

each (Table 45).

Table 45: Unit Costs for Sony Access Glasses System

Source: Telephone interview with manufacturer, July 2013.

Sony’s Access Glasses device costs for the individual glasses make the overall per theater 

average capital costs for the first year notably higher than the average USL/CaptiView 

equipment capital costs (Table 46). This is particularly notable for Megaplexes, for which 

Sony’s system would cost an average of $51,500 (mid-2013 retail prices), approximately two 

thirds higher than the average of $31,176 USL/CaptiView (average of the two systems) 

captioning equipment.

Table 46: Average Per-Theater First Year Capital Costs, USL/CapitView Average Costs 

and Sony Access Glasses

Average Cost Per Theater 

Using Average of 

USL/CaptiView Equipment 

Costs

Average Cost Per Theater 

Using Sony Glasses Equipment 

Costs

Megaplex $31,176 $51,500

Multiplex $22,335 $40,500

Miniplex $8,948 $17,000

Single Screen $2,692 $5,500

If all theaters that still needed to purchase captioning systems as estimated under baseline 

scenarios number 2 (Litigation-Based) and number 3 (NATO Survey Based) purchased Sony 

equipment, the total captioning equipment costs for all theaters during the entire 15 years 

following the publication of the proposed rule would likely total between $250.9 and $277.2 

million when using a 7 percent discount rate, and between $310.4 and $341.7 million when using 

Digital Captioning

(one per screen)

Hardware Cost Digital Captioning

(multiple per screen/theater)

Device Costs

$500 $1,250
APPENDIX

Pg. 87

a 3 percent discount rate, as seen in Table 47. The largest single year costs, which would occur 

in the first year, would likely reach between $70.9 million and $83.5 million, depending on the 

baseline conditions. 

Table 47: Total Captioning Costs over 15 Years, USL/CaptiView versus Sony Access 

Glasses, Discounted at 7 Percent and 3 Percent (2015 Dollars)

Under Baseline 

2–LitigationBased

Under Baseline 

2–LitigationBased

Under Baseline 

3–NATO Survey 

Based

Under Baseline 

3–NATO Survey 

Based

(millions $) (millions $) (millions $) (millions $)

Discounted at 7% Discounted at 3% Discounted at 7% Discounted at 3%

Average USL/CaptiView $156.2 $192.5 $142.1 $175.9 

Largest Single Year Costs (Year 

1; USL/CaptiView avg.) $43.7 $36.1 

Sony Access Glasses $277.2 $341.7 $250.9 $310.4 

Largest Single Year Costs 

(Year 1; Sony) $83.5 $70.9 
APPENDIX

Pg. 88

DETAILS REGARDING INTERIM CALCULATIONS FOR IMPACTS ON SMALL MOVIES

THEATERS

To calculate average costs per firm, an average number of establishments per firm was 

calculated using SBA and Census data on Movie Theaters by revenue size. The table below 

presents SBA/Census data for number of firms and number of establishments, by revenue 

category, plus the calculated values for the average number of establishments per firm for that 

revenue category, as well as the percentage of all establishments in the consolidated group and 

the average number of establishments per firm for that consolidated group.

Table 48: Estimation of Average Establishments per Firm

Number 

of firms

Number of 

establishments

Receipts 

($1,000)

Establishments 

Per Firm

% of 

establish

ments in 

category

(Group 

%) of 

establish

ments in 

category

Establish

ments 

Per Firm

Total Firms 2,004 4,801 12,391,925

Firms with 

sales/receipts/

revenue less 

than $100,000

333 333 17,404 1.00 6.9%

Firms with 21.8% 1.01

sales/receipts/

revenue of 

$100,000 to 

$499,999

703 712 177,762 1.01 14.8%

Firms with 

sales/receipts/

revenue of 

$500,000 to 

$999,999

318 339 226,243 1.07 7.1%

21.0% 1.24

Firms with 

sales/receipts/

revenue of 

$1,000,000 to 

$2,499,999

386 472 610,584 1.22 9.8%

Firms with 

sales/receipts/

revenue of 

$2,500,000 to 

$4,999,999

109 197 359,542 1.81 4.1%

Firms with 

sales/receipts/

revenue of 

$5,000,000 to 

$7,499,999

40 99 235,543 2.48 2.1%

10.4% 4.38

Firms with 

sales/receipts/

revenue of 

24 60 190,897 2.50 1.2%
APPENDIX

Pg. 89

Number 

of firms

Number of 

establishments

Receipts 

($1,000)

Establishments 

Per Firm

% of 

establish

ments in 

category

(Group 

%) of 

establish

ments in 

category

Establish

ments 

Per Firm

$7,500,000-

$9,999,999

Firms with 

sales/receipts/

revenue of 

$10,000,000 to 

$14,999,999

23 106 228,332 4.61 2.2%

Firms with 

sales/receipts/

revenue of 

$15,000,000 to 

$19,999,999

13 105 182,585 8.08 2.2%

Firms with 

sales/receipts/

revenue of 

$20,000,000 to 

$24,999,999

6 50 97,729 8.33 1.0%

Firms with 

sales/receipts/

revenue of 

$25,000,000 to 

$29,999,999

8 79 171,327 9.88 1.6%

Firms with 

sales/receipts/

revenue of 

$30,000,000 to 

$34,999,999

2 14 n/a 7.00 0.3%

46.8% 54.85

Firms with 

sales/receipts/

revenue of 

$35,000,000+*

39 2,235 n/a 57.31 46.6%

Based on data from Small Business Administration, Statistics of U.S. Businesses, Business Dynamics Statistics, 

Business Employment Dynamics, and Nonemployer Statistics. http://www.sba.gov/advocacy/849/12162. (last 

visited July 10, 2014). Downloaded from SBA Web site December 2013.

Theater types (Single Screen, Miniplex, and Multiplex) needed to be distributed across 

revenue categories. In the absence of detailed data breaking down revenue groups by theater 

type, we distributed the theater types as presented below in Table 49. (Note that no small 

businesses were assumed to be Megaplexes.)
APPENDIX

Pg. 90

Table 49: Distribution of Theater Size Types by Revenue Category

Running Total of Theater 

Type Based off 2015 

Distribution

Breakdown of Theater Type

Size of firms 

($)

% of 

establishments 

in receipt 

category

Running 

total %

Single 

Screen Miniplex Multiplex

% Single 

Screen 

of 

Receipts 

Category

% 

Miniplex 

of 

Receipts 

Category

% 

Multiplex 

of 

Receipts 

Category

Less than 

$100,000 6.9% 6.9% 6.9% 0.0% 0.0% 100.0% 0.0% 0.0%

$100,000-

499,000 14.8% 21.8% 12.6% 2.3% 0.0% 84.7% 15.3% 0.0%

$500,000-

999,000 7.1% 28.8% 0.0% 7.1% 0.0% 0.0% 100.0% 0.0%

$1,000,000-

2,499,000 9.8% 38.7% 0.0% 9.8% 0.0% 0.0% 100.0% 0.0%

$2,500,000-

4,999,000 4.1% 42.8% 0.0% 4.1% 0.0% 0.0% 100.0% 0.0%

$5,000,000-

7,499,000 2.1% 44.8% 0.0% 2.1% 0.0% 0.0% 100.0% 0.0%

$7,500,000-

9,999,000 1.2% 46.1% 0.0% 1.2% 0.0% 0.0% 100.0% 0.0%

$10,000,000-

14,999,000 2.2% 48.3% 0.0% 2.2% 0.0% 0.0% 100.0% 0.0%

$15,000,000-

19,999,000 2.2% 50.5% 0.0% 0.6% 1.6% 0.0% 27.1% 72.9%

$20,000,000-

24,999,000 1.0% 51.5% 0.0% 0.0% 1.0% 0.0% 0.0% 100.0%

$25,000,000-

29,999,000 1.6% 53.2% 0.0% 0.0% 1.6% 0.0% 0.0% 100.0%

Based on data from Small Business Administration, Statistics of U.S. Businesses, Business Dynamics Statistics, 

Business Employment Dynamics, and Nonemployer Statistics, available at 

http://www.sba.gov/advocacy/849/12162. (last visited July 10, 2014). Downloaded from SBA Web site 

December 2013.

Average capital costs per theater type were estimated by multiplying the number of screens 

by the required analog or digital equipment and the scoped number of devices. These average 

costs are presented in Table 50 and Table 51 below.
APPENDIX

Pg. 91

Table 50: Average per Establishment Costs of Purchasing Digital Closed Captioning and 

Audio Description Equipment

Cost Per Digital Theater Doremi USL Average Digital 

Cost

Megaplex* $40,540 $36,554 $38,547

Multiplex $27,880 $25,798 $26,839

Miniplex $10,920 $10,252 $10,586

Single Screen $3,285 $3,111 $3,198

* Note that the Regulatory Analysis assumes that no small business firm has Megaplexes; this data is presented for 

informational purposes only, to help illustrate the differences in average costs per digital theaters by type.

Table 51: Average per Establishment Costs of Purchasing Analog Closed Captioning and 

Audio Description Equipment

Cost Per Analog Theater Rear Window

Megaplex **

Multiplex **

Miniplex $31,884

Single Screen $8,172

**Note that the RA assumes that all Megaplexes and Multiplexes have transitioned to digital projection systems by 

the time this rule goes into effect.
APPENDIX

Pg. 92

The data on average receipts per firm (estimated from SBA and Census data) and the average 

cost per theater were used to calculate an average cost per firm (based on average number of 

theaters per firm). From these figures, a ratio of average cost/receipts was estimated separately 

for firms using analog or digital projection (Table 52).

Table 52: Estimated Average Receipts and Costs per Firm, Digital and Analog

Digital Analog

Size of firms 

($)

Average 

receipts 

per firm*

Average 

cost per 

theater**

Average 

cost per 

firm***

Ratio of 

average 

cost/

receipts****

Average 

receipts 

per firm*

Average 

cost per 

theater+

Average 

cost per 

firm++

Ratio of 

average 

cost/

receipts+++

Less than 

$100,000 $52,264 $3,198 $3,198 6.1% $52,264 $8,172 $8,172 15.6%

$100,000-

499,000 $252,862 $4,326 $4,381 1.7% $252,862 $11,791 $11,942 4.7%

$500,000-

999,000 $711,456 $10,586 $11,285 1.6% $711,456 $31,884 $33,990 4.8%

$1,000,000-

2,499,000 $1,581,824 $10,586 $12,945 0.8% $1,581,824 $31,884 $38,988 2.5%

$2,500,000-

4,999,000 $3,298,550 $10,586 $19,132 0.6% $3,298,550 $31,884 $57,625 1.7%

$5,000,000-

7,499,000 $5,888,575 $10,586 $26,200 0.4% $5,888,575 $31,884 $78,913 1.3%

$7,500,000-

9,999,000 $7,954,042 $10,586 $26,465 0.3% $7,954,042 $31,884 $79,710 1.0%

$10,000,000-

14,999,000 $9,927,478 $10,586 $48,788 0.5% $9,927,478 $31,884 $146,944 1.5%

$15,000,000-

19,999,000 $14,045,000 $22,436 $181,213 1.3% $14,045,000 $72,219 $583,306 4.2%

$20,000,000-

24,999,000 $16,288,167 $26,839 $223,658 1.4% $16,288,167 $87,206 $726,717 4.5%

$25,000,000-

29,999,000 $21,415,875 $26,839 $265,035 1.2% $21,415,875 $87,206 $861,159 4.0%

*Calculated by dividing total receipts by number of firms (Table 49).

**From Table 50 above.

*** Calculated by multiplying Average cost per theater (this table) by Average number of establishments per 

revenue category (Table 49).

****Calculated by dividing Average costs per theater by Average receipts per firm (in this table).

+From Table 51 above.

++ Calculated by multiplying Average cost per theater (this table) by Average number of establishments per 

revenue (Table 49).

+++Calculated by dividing Average costs per theater by Average receipts per firm (in this table). 
APPENDIX

Pg. 93

Based on data from Small Business Administration, Statistics of U.S. Businesses, Business Dynamics Statistics, 

Business Employment Dynamics, and Nonemployer Statistics. http://www.sba.gov/advocacy/849/12162. (last 

visited July 10, 2014). Downloaded from SBA Web site December 2013.

DIFFERENCES BETWEEN DATA ON SMALL BUSINESS MOVIE THEATERS

Data on firms by revenue category for industries is collected via the U.S. Census 

Bureau’s Survey of Business Owners as part of the Economic Census, conducted every five 

years. The U.S. Small Business Administration’s Office of Advocacy partially funds the Census 

Bureau to produce data on employer firm size including the number of firms, number of 

establishments, employment, and annual payroll and annual sales/receipts/revenue by industry.

49

Data for Motion Picture Theaters (except Drive-Ins) is available on two Federal Web 

sites: (1) the Small Business Administration’s Web site, and (2) the Census Bureau’s American 

FactFinder Web site.

 

The latest industry data for movie theaters is from the 2007 Economic Census. 

50

The following tables summarize some of the differences between the two datasets. The 

dataset downloaded from the SBA Website has a notably larger number of firms with revenues 

of less than $0.5 million.

Although the datasets on both Web sites are from the 2007 Economic 

Census, the two datasets contain different estimates of the total number of Motion Picture

Theaters. The two datasets have different total numbers of firms and different categories for 

which data is presented. The SBA dataset includes a greater number of revenue categories, but 

the dataset from the Census Web site separates firms that only operated part of the year from 

those that operated all year. 

Table 53: Dataset Differences in Number of Establishments

Receipt Size Class Number of Establishments

SBA US Census FactFinder Difference

<$499,999 1,045 820 27.4%

$500,000-$4,999,999 1,008 962 4.8%

$5,000,000-$34,999,999 513 561* -8.6%

*This number was calculated by taking half (50%) of the total number of establishments in the $25,000 to 

$49,999,999 category due to the lack of similar receipt size category with the SBA data.

 

49 See Office of Advocacy, available at http://www.sba.gov/advocacy/849/12162 (last visited July 10, 2014).

50 See SBA’s data on its page for “Firm Size Data,” available at http://www.sba.gov/advocacy/849/12162 (last 

visited, July 10, 2014). Detailed data by revenue group is on the excel file under the U.S. Static data section, 

labeled: “• U.S. data including multiple tables (Microsoft Excel file),” and on the tab labeled “us_rec_detail_ind07”. 

Data directly from Census can be downloaded from Census’ American FactFinder website, available at 

http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml, by selecting “Advanced Search”, then “Show Me 

All”, and under Section 1, entering the topic EC0751SSZ4. (last visited June 11, 2014). Data was accessed 

December 2013.
APPENDIX

Pg. 94

Meanwhile, the dataset downloaded from the SBA Website has lower average receipts 

per firm. 

Table 54: Dataset Differences in Average Receipts per Firm

Receipt Size Class Average Firm Receipts

SBA US Census FactFinder Difference

<$499,999 $188,384 $201,973 -6.7%

$500,000-$4,999,999 $1,471,549 $1,484,995 -0.9%

$5,000,000-$34,999,999 $9,705,377* $12,437,259 -22.0%

*This number does not include the $30,000,000-$34,999,000 category of firms because the SBA data does not 

report the receipts due to confidentiality reasons.
APPENDIX

Pg. 95

SOURCE NOTES

The table below summarized key inputs in the cost estimation and the source for those 

estimates. The table below is not comprehensive with respect to all values used to estimate 

costs; some inputs require discussion and are described in the appropriate section of the Initial 

RA.

Measure/Input Source

Number of Theaters (2009) 2009 Theatrical Market Statistics Report, Motion 

Picture Association of America

Percentage of Theaters that are Digital 

(2013)

Testimony of John Fithian, President &CEO of 

National Association of Theatre Owners, Inc. 

before the U.S, Senate Committee on Health, 

Education, Labor and Pensions. May 14, 2013 

Annual Growth of Theaters (2008-2012) 2012 Theatrical Market Statistics Report, Motion 

Picture Association of America

Captioning Devices Per Theater DOJ Subject Matter Expert 

Audio Devices Per Theater DOJ Subject Matter Expert

Captioning Hardware Replacement 

Schedule

DOJ Subject Matter Expert, based on discussions 

with manufacturers

Audio Hardware Replacement Schedule DOJ Subject Matter Expert, based on discussions 

with manufacturers

Captioning Device Replacement 

Schedule

DOJ Subject Matter Expert, based on discussions 

with manufacturers

Audio Device Replacement Schedule DOJ Subject Matter Expert, based on discussions 

with manufacturers

Litigation Baseline Assumption

Estimated by Department staff based on 2010 

NATO Circuits data and theater companies 

involved in recent litigation pertaining to captioning 

in movie theaters

NATO Baseline Assumption

Testimony of John Fithian, President &CEO of 

National Association of Theatre Owners, Inc. 

before the U.S, Senate Committee on Health, 

Education, Labor and Pensions. May 14, 2013

Analog Theaters Baseline Assumption DOJ Subject Matter Expert

Partial Captioning Compliance 

Assumption

DOJ Subject Matter Expert

Digital Hardware Cost

From manufacturers of USL and CaptiView 

systems, obtained via interviews and web research 

in February 2013
APPENDIX

Pg. 96

Measure/Input Source

Digital Individual Captioning Device 

Cost

From manufacturers of USL and CaptiView 

systems, obtained via interviews and web research 

in February 2013

Analog Hardware Cost

Media Access Group at WGBH, Rear Window 

Captioning Components Cost Overview, August 

2010

Analog Individual Captioning Device 

Cost

Media Access Group at WGBH, Rear Window 

Captioning Components Cost Overview, August 

2010

Digital Audio Hardware Cost

From manufacturers of USL and CaptiView 

systems, obtained via interviews and web research, 

August 2013

Digital Audio Device Cost

From manufacturers of USL and CaptiView 

systems, obtained via interviews and web research, 

August 2013

Analog Audio Hardware Cost From manufacturers of William Sound, obtained via 

web research, August 2013

Analog Audio Device Cost From manufacturers of William Sound, obtained via 

web research, August 2013