Will 'Stars' Align For New Business Model?
Theater chains have long been counting on alternative content and live events as a way to bolster bottom lines. A special 'Fault In Our Stars' event tonight billed as the largest ever live simulcast experience might be a key test case. Deadline's David Lieberman reports.
Technological barriers to offer music, sports, and other forms of video content “are gone” now that most theaters have digital projectors, and many receive content via satellite, Cinemark CEO Tim Warner told investors at the Gabelli & Co Movie & Entertainment Conference. “Now it’s just [about] developing the business model.” He and other execs hope to persuade major studios and other content owners to look at theaters as a kind of pay per view network for non-mainstream movie content on weeknights when most seats typically are empty. Exhibitors don’t necessarily need new relationships. “When you’re talking to ESPN you’re talking to Disney. When you’re talking to Fox Sports you’re talking to 21st Century Fox,” Warner says. Some are willing to experiment. For example, he says, Fox approached Fathom Events to help promote The Fault In Our Stars in a special event tonight. Execs said “Look, let’s do a premiere on the satellite network called ‘The Night Before Our Stars’” which is being billed as “the largest ever live simulcast experience.” Theaters will offer on-screen interviews and musical performances, and give attendees a charm bracelet and poster ahead of a screening of the film — for a $25 ticket price. “It not only pre sold the movie, you got a $25 average ticket price. So this is a great development,” Warner says. “The fact that Fox did this and was so successful, the studios are going to be right behind this….It’s probably a way to help pay for their premieres.”
Related: Regal Gears Up To Add Large Screens And Recliner Seats
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Wall Street usually shows little love for the movie business with its typically low, and unpredictable, profit margins. But in a combined look at the studio and exhibition businesses this morning, MoffettNathanson Research’s Michael Nathanson and Robert Fishman tell investors that it’s time to take a fresh look — as long as they proceed with caution. They lowered profit estimates for major exhibition chains Regal and Cinemark, citing expectations for weaker domestic summer box office results vs 2013. They project a full-year decline of 1.6% to $10.7B followed by a 5% jump in 2015 to $11.3B and then a drop of 2.6% in 2016 to $11.0B. The analysts appeared more upbeat about the studios. “After several terrible years post the popping of the DVD bubble, we believe the film industry is showing signs of health,” they say. “The combination of fewer releases, greater international focus and lower overhead expenses are all driving studio margins ahead of pre-recession levels. These results show that a good crisis wasn’t wasted in Hollywood.” Revenues fell over the last few years at the big four film studios (Warner Bros, Disney, Fox, and Paramount) as they reduced their output. Yet cash flow margins improved to a little under 12% which is “a tribute to their ability to curb bloated studio expenses.” Read More »
UPDATED, 8:50 AM: Following its exclusive multi-year renewal with Cinemark (original story below), NBCUniversal-owned Fandango announced today it has added five new exhibitors, Malco Theatres, Frank Theatres, Goodrich Quality Theaters, NCG Cinemas and Paragon Theaters. That brings its online and mobile ticketing to more than 1,000 screens in over a dozen states, Fandango says.
Related: CinemaCon: Fandango & Veezi Ink Online Ticketing Deal
PREVIOUS, MARCH 24 AM: We’ll probably see a lot of announcements like this one pegged to the exhibition industry gathering this week in Las Vegas. Fandango says that it has a new multi-year deal to be the exclusive third-party provider of online and mobile ticketing services for Cinemark‘s 4,400 U.S. screens. “We have worked closely with Fandango for many years and they’ve been a great partner, helping us deliver many conveniences to our guests,” says Cinemark CEO Tim Warner. NBCUniversal-owned Fandango continues to say that it’s “coming off a record-breaking year in 2013, with record-high ticket sales, web and mobile traffic, and app downloads” as well as “a dramatic 57% increase in mobile ticket sales.” But, as we’ve noted before, it’s hard to say what these statements mean: Fandango doesn’t disclose how many tickets it sold. The impressive growth in mobile sales still is a slowdown from the 171% growth in 2012, and the 73% increase in 2011. Smart phone and tablet users accounted for more than … Read More »
The new arrangement replaces the contract from 2012, when Tim Warner replaced Alan Stock after he retired. That deal was set to expire in April but was subject to a one-year extension. With the new agreement, Cinemark “will continue to benefit from [Warner's] global growth and management experience,” Chairman Lee Roy Mitchell says. The exhibition chain also seemed to anoint Robert Copple as heir apparant, promoting him to President and Chief Operating Officer from CFO. In the new job, Warner says, Copple “will remain engaged in the day-to-day operations of the company and will be more available to help execute global strategic initiatives. Specifically, Robert will direct the efforts of our domestic company’s senior management team, while working more directly and on a broader basis with Valmir Fernandes, President of Cinemark International, on strategic initiatives such as FLIX Media and alternative content.”
EXCLUSIVE: Blue Is The Warmest Color has gotten the Parents Television Council steamed in all the wrong ways, so much so that the watchdog group has veered from small-screen scrutiny to take on the racy feature film. The advocacy group ripped into NYC’s IFC Center for last week’s decision to flout the MPAA’s adults-only NC-17 rating for the 2013 Palme d’Or winner and invite teenagers to view the sexual-awakening tale that charmed Cannes. “The IFC Center’s decision to usurp parental and family authority by allowing unfettered access to children of adult-rated, explicit sexual content is a direct assault on parents and families across the country,” PTC President Tim Winter thundered in a letter sent to IFC Center General Manager and SVP John Vanco. “Your selective unenforcement (sic) of the MPAA guidelines in this instances approaches industrial fraud, in that the system is intended specifically for the purpose of parental reliance, and that reliance has been obviated. We ask that you immediately reconsider this self-serving and undermining business decision, and instead do what is in the right and best interests of parents, families and children. The Parents Television Council will bring its full weight and credit to bear to make a national issue of your decision, via every available means, until it is reversed,” the letter concludes. It isn’t clear how PTC’s full weight will impact a Gotham art house theater; MPAA issues its ratings, but those classifications are voluntary, and theaters are not under any obligation to follow them.
NC-17 Import ‘Blue Is The Warmest Color’ Scores Solid Open
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The exhibition chain’s board says it will pay 25 cents per share each quarter, up from 21 cents. The increase follows the Mexican Federal Competition Commission’s decision last week to reject Cinemark‘s $125M deal to sell its 31 theaters in the country to Groupo Cinemex. Cinemark says it will appeal the ruling. The chain has been making big investments in its Latin American theaters to replace traditional projectors with digital ones. “If Cinemark can raise the dividend now, we see potential for more hikes next year and beyond when this [capital expenditure] bulge rolls off,” says Lazard Capital Markets’ Barton Crockett. With the increase, Cinemark’s dividend yield rises to 3.2% from 2.9% but is still behind Regal’s 4.4%. Last week Cinemark reported record admission revenues in Q2, a strong quarter for the entire industry. Its shares are off about 1% in early trading on a down day for the stock markets.
Barco has scored a hit in the immersive audio turf war previewed at April’s CinemaCon. Global chain Cinemark is siding with the open sound format employed by Barco’s Auro 11.1 over competitor Dolby Atmos. The theater company has committed to deploying Auro 11.1 in over 150 premium Extreme Digital (XD) screens beginning this year in its “tier one” markets, including North America. Dominant sound specialist Dolby has seen its Dolby Atmos system used exclusively on major studio projects including WB’s Man Of Steel, Pacific Rim, and Gravity, Paramount’s Star Trek Into Darkness, Disney’s Marvel’s Iron Man 3 and Monsters University, and Fox’s Percy Jackson: Sea Of Monsters and Wolverine. Meanwhile Auro 11.1′s major native productions thus far are highlighted by DreamWorks Animation’s The Croods and Fox’s Turbo – a modest start. (Sony’s Elysium was mixed in both Auro 11.1 and Dolby Atmos.) But Cinemark operates 467 theaters in 39 US states, Brazil, Mexico, Argentina and 10 additional Latin American countries, and their business means at least a minor victory for Barco’s immersive audio contender…
Related: Rival Companies Prepare For Immersive 3D Audio War
Add Cinemark to the list of exhibition chains licking their wounds from the weak Q1 box office. The company reports this morning that it generated net income of $33.1M, -22.9% vs the period last year, on revenues of $547.8M, -5.4%. The revenue figure was slightly short of the $550.4M that analysts anticipated. But earnings at 28 cents a share beat forecasts for 24 cents. Admissions revenues fell 6.4% to $349.4M as a 6.7% drop in worldwide attendance to 57.4M wiped out the 1 cent gain in the average ticket price to $6.09. And concession revenue fell 4.1% to $172.4M, even as average sales per patron rose 8 cents to $3. All of the fall-off in attendance took place at domestic theaters (-13% to 34.7M) while Cinemark’s international ones were up 4.8% to 22.8M. Read More »
The exhibition company gave Tim Warner — who had overseen Cinemark‘s expansion in Latin America — a nice raise in February 2012, when he took the top job following the retirement of Alan Stock. The CEO’s new package included $700,000 salary, $2.1M in stock awards, $933,310 in non-equity compensation, and $207,655 in other compensation, according to the proxy filed at the SEC today. Stock ended up with $1.6M, mostly consisting of a $1.3M consulting fee. Warner’s compensation equals 1.7 times the median for Cinemark’s four other highest-paid current executives — well below the threshold that causes concern for corporate governance watchdogs. Company shares appreciated 36.7% last year.
Cinemark To Sell Theaters In Mexico
Texas-based Cinemark Holdings will sell its Mexico theaters to Grupo Cinemex and Cadena Mexicana de Exhibicion, the company announced. The Mexico circuit encompasses 290 screens in 31 theaters. Cinemark CEO Tim Warner said the sale would allow Cinemark to concentrate on its remaining Latin American theaters in Central and South America. Cinemark said its Mexico operation’s unaudited revenues for the 12 months ending September 30, 2012 were $73.7 million from 12.9 million admissions with a net income of $7.9 million. Sale of the Mexico theaters is subject to closing conditions and regulatory approval.
Ireland Reauthorizes Film & TV Incentive With 4% Increase
Ireland’s film and TV tax incentive has been signed into law and extended through to 2020. Value of the incentive commonly known as Section 481 will increase to 32% of qualifying expenditures from 28% from 2015. Minister for Arts Heritage and the Gaeltacht Jimmy Deenihan acknolwedged the new law during a visit to the set of Frank, which he described “an example of the excellent work the Irish film industry is producing.” Michael Fassbinder stars in Frank with Domhnall Gleeson and Maggie Gyllenhaal. The project centers on a band fronted by an eccentric leader Frank, played by Fassbender. Currently shooting in Dublin and Wicklow, it’s directed by Lenny Abrahamson and co-produced by Ireland’s Element Pictures and the UK’s Runaway Fridge Productions. Other big-budget projects to benefit from the incentive include The History Channel’s Vikings and BBC’s Ripper Street.
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Here’s yet another indication that movie theater owners are making peace with the idea that their customers also want to spend time being entertained at home. This weekend 24 Cinemark theaters in five markets – San Francisco, Dallas, Salt Lake City, Chicago, and Cleveland — will charge $5 a ticket for matinee showings of Disney’s Lady And The Tramp, Peter Pan and Cinderella. It isn’t just for nostalgia’s sake. The exhibition chain will also sell Diamond Edition Blu-ray discs for each of the movies. Cinemark still sees an opportunity to lure buyers back. They’ll receive an unspecified “free offer from Cinemark and a special gift” tied to Disney’s upcoming Oz The Great and Powerful, Cinemark says. The company’s James Meredith calls it “a very exciting and unique program” to see the films on a big screen “before they return to the Disney vault.”
Cinemark should not be sued in civil court for the shooting rampage and deaths last July in its Aurora, Colorado theater at a midnight screening of The Dark Knight Rises, says a federal magistrate judge. Cinemark moved in late October to have the civil claims dismissed. At the time, the exhibitor argued that each suit “fails to state a claim upon which relief can be granted as a matter of law,” arguing that what happened was not its fault. In a dense 22-page recommendation (read it here) filed Thursday, Judge Michael Hegarty said the consolidated negligence and wrongful death civil lawsuits by victims and their families should be dismissed. Instead he suggests that because the plaintiffs’ “state plausible claims,” they may have a further case under the Colorado Premises Liability Act. ”Absent allegations that Plaintiffs’ injuries occurred other than on Defendant’s property and did not arise out of a condition of the property or by activities conducted on the property, and in accordance with prevailing case law, the Court concludes that Plaintiffs’ claims for negligence and wrongful death are abrogated by the CPLA and must be dismissed,” says the recommendation to the district court. All of the lawsuits cite the lack of proper security at the July 20 opening day midnight screening of The Dark Knight Rises at the Aurora Century 16 … Read More »
The Colorado multiplex where a gunman opened fire in a crowded theater watching a July 20 midnight screening of The Dark Knight Rises is reopening today. A private ceremony is planned for victims, first responders and officials, the AP says. Twelve people were killed and 58 were wounded in the attack. Cinemark said it will open the theater to the public Friday and have it fully operational by January 25. Cinemark reportedly spent $1 million on renovations and has renamed the venue the Century Aurora but has given few other details about plans. Some victims’ family members are upset about tonight’s “special evening of remembrance”, though — Cinemark sent out invitations during the holidays. Outraged invitees publicly condemned the circuit in a letter published January 2 in the Denver Post. “This disgusting offer that you’d ‘like to invite you and a guest to a special evening of remembrance on Thursday, January 17 at 5 PM’ followed by the showing of a movie and then telling us to be sure ‘to reserve our tickets’ is wholly offensive to the memory of our loved ones,” the letter read in part.
Last week, alleged gunman James Holmes had his arraignment pushed back until March 12. He faces 166 counts including for murder and attempted murder.
The accused gunman in the Aurora, Colorado movie theater shooting will now not be arraigned until March 12, a judge ruled today. James Holmes was scheduled for arraignment Friday but Judge William Sylvester delayed the hearing at the request of the suspect’s public defenders. Twelve people were killed and 58 were wounded when Holmes allegedly opened fire July 20th during a midnight screening of The Dark Knight Rises at the Cinemark-owned Aurora Century 16 multiplex. The decision sparked outrage from family members of the deceased and victims as the Colorado-based District Court judge explained that defense lawyers said that they needed more time to figure out the correct plea for their client. On Thursday, the judge had decided that prosecutors had presented evidence of probable cause that Holmes committed the shooting. He is accused of 166 counts, including murder and attempted murder and could face the death penalty if found guilty.
Related: Colorado Theater Shooting Lawsuits Get May 2014 Trial Date
Some family members of victims of the Aurora, Colorado movie theater shooting are outraged over an invitation they received from Cinemark to attend “a special evening of remembrance” and a movie in the theater where their loved ones were killed. The letter, published today in the Denver Post, is signed by eight relatives of victims who say they are particularly upset that the invitation was sent during the holidays. A portion of the letter follows below:
To the Management of Cinemark USA, Inc.:
During the holiday we didn’t think anyone or anything could make our grief worse but you, Cinemark, have managed to do just that by sending us an invitation two days after Christmas inviting us to attend the re-opening of your theater in Aurora where our loved ones were massacred.Thanks for making what is a very difficult holiday season that much more difficult. Timing is everything and yours is awful.
You (Cinemark) has shown, and continues to show, ZERO compassion to the families of the victims whose loved ones were killed in their theater. You, Cinemark, have never once reached out to the families to offer condolences.
This disgusting offer that you’d “like to invite you and a guest to a special evening of remembrance on Thursday, January 17 at 5 PM” followed by the showing of a movie and then telling us to be sure “to reserve our tickets” is wholly offensive to the memory of our loved ones.
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The star-filled concert will be widely shown on TV and streamed online — but this should provide an opportunity for fans who don’t have a ticket to the Madison Square Garden event to enjoy a communal experience with immersive video and sound. National CineMedia will provide a feed of the 12-12-12 benefit over its Digital Broadcast Network to more than 200 Cinemark, Century and Tinseltown theaters. They’ll show it live beginning at 7:30 ET, and charge about the same price the venue would for a child’s movie ticket with all proceeds going to victims of Hurricane Sandy. The concert will feature Alicia Keys, Eric Clapton, Bruce Springsteen, Billy Joel, Kanye West, The Rolling Stones, The Who, and Paul McCartney. Other chains including Clearview and National Amusements also will show the concert in some theaters, but Cinemark appears to be committing the most venues. Read More »
The Aurora, Colorado movie theater where a gunman went on a rampage at a July 20th midnight screening of The Dark Knight Rises will reopen on January 17, 2013. The news came in a December 5-dated letter from Cinemark president and CEO Tim Warner to Aurora mayor Steve Hogan. Now called Century Theater XD, the former Century 16 has undergone extensive renovations in the months since James Holmes allegedly opened fire, killing 12 and wounding 58. The theater will show free movies from January 18 to 20. The city of Aurora had polled residents online earlier this fall about what they wanted to see happen to the theater. The city says a majority said it should be reopened, though some victims’ families have told local media they do not think it should reopen. Cinemark is embroiled in several lawsuits with victims’ families over the shooting – all charging security negligence by the chain at the Aurora theater was partially to blame for the tragedy. The company has unsuccessfully tried to get the suits dismissed. The lawsuits will go forward as one and will go to trial on May 5, 2014 in Denver, a federal judge ordered in late November.
The seven lawsuits filed against Cinemark over the July 20 theater shooting in Aurora, Colorado will go forward as one, and they will go to trial in a year and a half. In a short hearing (read the minutes here) in Denver yesterday, U.S. District Judge R. Brook Jackson set a jury trial date of May 5, 2014 for the cases. The judge also ordered the suits consolidated for the purposes of discovery and motions. All cite the lack of proper security at the midnight screening of The Dark Knight Rises at the Aurora Century 16 multiplex as being responsible for the shooting by alleged gunman James Holmes. The rampage left 12 dead and 58 wounded. On Monday, Jackson gave January 31, 2014 as the cut-off date for discovery and February 15, 2014 as the deadline for dispositive motions. Three victims filed lawsuits on September 21 and four more suits were filed October 11 by victims and their families. Cinemark filed motions in October to have all lawsuits against it dismissed. Kevin Taylor and Kyle Seedorf of Denver firm Taylor Anderson are representing Cinemark in the case.
Cinemark Won’t Address Aurora Questions And Its Fallout
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This is a sad sign of the times: The exhibition chain has decided it must give customers a special incentive to respect the movies, and each other. It unveiled today CineMode — a component within its iPhone and Android smartphone app — that can determine whether the owner uses the mobile device during a film, and send digital coupons to those who leave them alone. “It is important to develop tools that maximize and preserve the movie-going experience,” says Cinemark’s marketing and communications VP James Meredith. He adds that customers have asked the chain to “design an alternative and creative solution” to keep others from lighting up their phones in the dark theater. Before a film starts, Cinemark will flash a message on the movie screen urging customers to launch CineMode. The app will dim the smartphone’s screen and ask users to turn the volume off so incoming calls only cause the phone to vibrate. Customers must stay in CineMode throughout the film. If they do, then the company says it will automatically send a coupon to be stored in the app’s Rewards section. Read More »