Produced By: Hispanics “Most Important” Ticket Buyers; Theater Owners Testing In-Movie Language Translation App
“Hispanics are far and away the most important consumers at our cinemas,” declared National Association of Theater Owners head John Fithian at Sunday’s Produced By panel on the voracious spending habits of the growing Hispanic population. Fithian described Hispanics as “the most valuable component of moviegoers” and credited them with the 5.8% boost in ticket sales in the family flick-filled first quarter of 2014. A sizzle reel opening the session called the demo “the biggest game changer since the baby boom,” a claim supported by NATO and Nielsen stats with even more growth projected by 2050, when one out of three Americans will be of Hispanic descent.
According to Fithian, 44% of Hispanics go to the movies a few times a month, 63% rent movies on DVD or Blu-ray, and 76% own high quality televisions in their home – all in numbers higher than other ethnicities. Naturally, theater owners would like Hollywood to cater more content to their highest-volume customers. They’re also taking the initiative by testing an in-theater app that can translate English language films into multiple languages live during a movie. “We are testing simultaneous translation, personal devices that sync up with movies with an app while you’re watching a movie,” Fithian revealed.
Encouraging moviegoers to use their smart phones during movies might invite piracy and disturb other moviegoers, obvious downsides that NATO is trying to work around. “We are talking to a couple of companies who will be working with our members to test usability and any possible disruption to other patrons,” a rep for the organization told me. “Since smart phones can also record, we want to make sure the apps are usable when the devices are in your pocket, so ushers don’t have to worry about a lot of people pointing phones at the screen and trying to guess if they are pirating.”
On Tuesday during his annual address to delegates at CinemaCon, National Association Of Theatre Owners president John Fithian caused a stir with a real head-scratcher that has kept resonating among theater owners and some studio executives when he stated he waited to watch this year’s Oscar-winning Best Picture 12 Years A Slave at home, rather than at a cinema, because it was too “unequivocally intense.” For the head of an organization that is meant to promote movie-watching in theaters, singling out the Academy’s choice for Best Picture (with that Oscar distinction traditionally a real magnet to bring customers into theaters) was an eye-opener, and execs at 20th Century Fox to whom I have spoken were furious with the NATO chief for even suggesting, however personal, that the preferred way to see the widely acclaimed Fox Searchlight release was to wait and see it at home. This morning, near the beginning of their studio presentation at Caesars Palace’s Colisseum theatre, Fox shot back. ”All of (our) films are meant to be seen in the best possible venue, the cinema, your cinemas and that includes movies that win the Oscar for Best Picture like 12 Years A Slave,” said 20th Century Fox distribution president Chris Aronson in his opening remarks this morning that contained that not-so-veiled reference and response to Fithian’s comments.
Of course it is no secret that many Academy members were, like Fithian, reluctant to watch the intense film, either in a theater or at home on their screener. That’s one of the reasons Fox Searchlight launched their second-phase “It’s Time” campaign in order to encourage them to view the film that would eventually take the top prize for the studio. But coming from the head of NATO, these remarks really stung, especially since he so publicly supports strict windows between the theatrical release of a movie and when it can be consumed at home. One Fox exec to whom I spoke was, in a word, livid when he heard Fithian’s remarks. Another major theatre chain head who played several runs of 12 Years A Slave and still has it in some theaters (even though it first opened in October) was equally outraged by the suggestion that the film is too intense for their screens. Another said, “It’s like if you were the head of Macy’s department store and urged people to shop in their store, but to buy your underwear online.”
Exhibition execs face several controversial matters, but “there’s peace in the homeland” in their relationships with studios, NATO‘s John Fithian said in his annual joint press meeting with MPAA‘s Chris Dodd at the CinemaCon confab. The lobby group heads always emphasize the positive, but this time Fithian sounds like he means it. He acknowledged that there’s been a friction in previous years — especially 2011 when there was what he calls a “very public food fight” over how quickly studios can release their films on home video. But now “we’re working together instead of fighting. …Since then it’s been dialogue and cooperation.” Dodd says his MPAA members agree that “the best experience for their product is in the theater.”
On one hot-button issue, texting in theaters, Fithian says that his members “have conversations every week” about whether to allow it under certain circumstances. But it’s unlikely that anything will change soon. When some execs said here two years ago that they’re looking at the matter, “They got barraged from moviegoers saying, ‘that is my last refuge of peace.’…Then the 17 year olds respond and say, ‘we have to be connected.’ ” The sense, for now, is that “the vast majority of our consumers go to the cinema to escape” with many looking at moviegoing as “a quasi-religious experience.” But Fithian says “it’ll be an evolving space. Let’s leave it there.”
This “has worked for years in Latin America and Canada,” NATO chief John Fithian says — and could begin as an experiment in one U.S. state by the end of this year. “There are meetings this week about doing a test with a discount.” Although NATO has a state in mind, Fithian declined to say which one is being considered. He adds that studios have to endorse the concept. It makes sense, he says, because “our capacity is so unused,” which is why “we are looking aggressively at it.” Fithian says he can’t disclose much because so many decisions have yet to be made, and to avoid the possibility of violating antitrust laws by appearing to set prices. NATO “could never set what the discount could be … [it] would have to be a concept that this is the day in which theaters discount.”
The 4.7% increase in Q1 admissions and 7.2% uptick in box office shows that it pays to have family friendly films in the early months, NATO‘s John Fithian told exhibition execs at the opening session for the CinemaCon confab. But it’s not enough. “We have a need for more family friendly, quality movies,” he says noting that four hit the top 10 last year vs two the year before leading to a spurt in attendance by kids 11 and under. Fithian adds that “we could sell even more [tickets] if they were spread out…We could still use more calendar diversity.” He also cheered the growth of films featuring diversity in their leading actors, and in the audiences that they target. That’s becoming especially important now that major studios are “shooting for the globe but releasing fewer titles.” But Fithian says he’s encouraged to see Lionsgate rise “to major studio status” while new productions come from the exhibition-backed Open Road, and a new venture led by Bob Simonds. “We will have the titles we need to continue our box office growth,” the NATO chief says.
It sure looks that way as exhibition and studio execs prepare to head to Las Vegas next week for the annual confab. There are no obvious, explosive controversies to address this time out — which is unusual. Since 2011, when the meeting formerly known as ShoWest became CinemaCon, “some big issue has blown up,” Cinemark CEO Tim Warner tells us. “I hope that doesn’t happen [this year] because the business is going so good.” Says National Association of Theatre Owners CEO John Fithian: “Sometimes we go into these conventions we go into this with one or two issues, but that’s not the case this year. We’ll be talking about product supply and movies, and how it relates to product returns. We’ll also be talking about technology.”
This all comes as the exhibition business is poised for dramatic, and possibly painful, changes as owners deal with consumers who say that ticket prices are too high, a creative community that wants better projection and sound quality, studios that want a bigger share of the box office pie, and investors who demand higher dividends.
Cheerleading is to be expected at a trade show, and there’s sure to be a lot as execs look ahead to a tsunami of sequels that could make 2015 a blowout year for box offices. Paramount, Universal, Sony, Fox and Warner Bros will show their product reels. Disney will feature its Jon Hamm-starring sports-themed Million Dollar Arm. Not to be outdone, Lionsgate will feature its sports-themed comedy-drama Draft Day from director Ivan Reitman and starring Kevin Costner, while Universal swings back around with a screening of the comedy Neighbors about newlyweds with a baby who must live next to a fraternity house. And filmmaker Chris Nolan (Inception, The Dark Knight Rises) will take part in a discussion about his career. The late Tom Sherak will also be honored on Wednesday night at The Pioneers Dinner.
On broad-stroke matters, exhibitors can pretty much cross off their top concern from last year: the dearth of family-oriented titles in Q1 followed by a summer onslaught. Exhibitors wanted family films spaced out better. “We had encouraged the studios to think about that more, and they did,” Fithian says. Family fare from this year’s early months included The Nut Job, The Lego Movie, Mr. Peabody And Sherman, and — this weekend — Muppets Most Wanted.
There’s also been progress on exhibition’s call for more small- and medium-budget movies. As the six big studios cut their output by 40%,
EXCLUSIVE: NATO president/CEO John Fithian struck back at Netflix chief content officer Ted Sarandos, who today gave the keynote speech at the Film Independent Forum and charged theater owners with potentially killing the movie business by being inflexible with shrinking theatrical windows. Fithian said that if anybody is imperiling the time-tested movie going experience, it is upstarts like Netflix.
“Subscription movie services and cheap rentals killed the DVD business, and now Sarandos wants to kill the cinema as well,” Fithian said. As for Sarandos’ assertion that studios should offer their films on Netflix day and date with theatrical openings, Fithian said that “The only business that would be helped by day-and-day release to Netflix is Netflix. If Hollywood did what Sarandos suggests, there wouldn’t be many movies left for Netflix’s customers or for anyone else. It makes absolutely no business sense to accelerate the release of the lowest value in the chain.”
Netflix is just the latest party to join the ongoing argument over how movie distribution models should evolve, if at all. TV has grown nimble, with cable systems and networks making it easier than ever for audiences to catch shows so that initial air times are almost irrelevant. In the independent film space, multi-platform releasing continues to grow as a viable alternative to a theatrical model which requires a significant P&A spend. The major chains have largely refused to play ball, and often force multi platform distributors to “four wall” screens, instead of the revenue split formula that is usually the way distributors and theaters do business. Many have argued that it is inefficient for studios to spend huge P&A sums to open films in theaters, and then be forced to wait half a year or more, and spend more money to rebuild awareness for the DVD, VOD and pay windows for films that consumers have long since forgotten about. But the last time a studio tried to buck the system, as Universal did on the Brett Ratner-directed Tower Heist, the major film chains banded together and arm-twisted Universal to shut down a limited test that would have offered day and date VOD viewing at a premium price. The theaters are protecting their own business, after having gone to the expense of building and upgrading theaters all over the country.
Related: Netflix Shares Hit New Highs in Q3
The analysis comes from NATO‘s John Fithian after he was asked at a press meeting why Hollywood produces so many R-rated films — despite the evidence he presented this morning showing that family friendly films typically fare better at the box office. “It’s cool to be Quentin Tarantino,” he says. While lauding the the First Amendment, giving filmmakers the right to produce what they will, he says that there’s “often a little bit of a difference between the movie-making philosophy and the exhibition philosophy” about what sells. MPAA‘s Chris Dodd says that they aren’t that far apart. For the major studios he represents “less than 50% of our product is R-rated.” Still, he noted that the cost of producing a G-rated film “can be higher than an R-rated movie.” But he didn’t bite when asked whether films are too violent. ”Our job isn’t to be movie critics,” he says. The execs added that they didn’t think that Hollywood has become too focused on making movies for overseas markets vs domestic. “Movies that are made overseas work domestically too,” Fithian says. “Our companies operate across national lines” notably since China’s Wanda Group bought AMC Entertainment and Cinemark has become a major exhibitor in …
The film industry’s two chief lobbyists stayed on message at a brief press conference this afternoon that mostly dealt with the movie ratings initiative introduced this morning. The effort to clarify the reasons why a film has a particular rating, and to keep movie trailers in sync with the film that follows, is “terribly, terribly important,” MPAA’s Chris Dodd says. The box that describes a film’s content is better than the current version because “you don’t have to squint to read it.” And the effort to match trailers with films will avoid “a lot of confusion.” NATO’s John Fithian added that his board’s unanimous support for the new system — and an agreement to run ads promoting it — is a big deal because “you’re asking business people to give up millions of dollars to do the right thing.” Is this a response to last year’s school shootings in Sandy Hook, and those who say that excessively gruesome films help to desensitize people — including impressionable kids — to violence? Not exactly, they said. Hollywood has been “constantly engaged with the parenting public,” Dodd says. “We said from the very beginning that we’re willing to be part of the conversation.”
“PG-13 represents the sweet spot” for theaters, National Association of Theater Owners CEO John Fithian told a CinemaCon audience this morning. Last year there were only about a third as many PG films as R-rated ones, but they collectively generated nearly equal box office sales. The message: “Make more family friendly films and fewer R-rated titles,” Fithian says. “Americans have stated their choice.” He also wants studios to spread out their releases instead of focusing on holidays. “Any month can produce a $100M movie” he says noting the success Warner Bros had in October with Argo, Sony had in August with The Bourne Legacy, and Lionsgate had in March with The Hunger Games. “In most if not all of those cases, distribution in off months produced higher returns.”
The exhibition trade show chief also says that studios focus too much on men, and need to make more films for women and minorities. For example, Latinos are the top movie goers on a per capita basis. Fithian says that theaters are doing their part by diversifying the concessions they offer. “In many locations it is not dinner and a movie, it’s dinner at the movies.” And he …
Attendance takes off when there’s a diversity of films and it was “just not there” in the beginning of 2013, National Association of Theater Owners chief John Fithian said in a conference call to discuss the MPAA’s report on business trends in 2012. “We have not performed as well as we’d like, we’re down about 12%….If you look at January in particular we had a lot of movies rated R that included a lot of violence. And those movies can sell, but not when that’s all you’ve got to offer.” The dearth of family fare in early 2013 contrasts with the last few months of 2012 when “we had comedies, we had dramas, we had family and we were up over 15% in that quarter.” Looking ahead, though, he’s “pretty confident about the remainder of 2013.” The upturn won’t take place right away: Last year had an outsized success with Lionsgate’s The Hunger Games. ”That was a $400M picture out of nowhere,” Fithian says. But by summer “the comps are strong and the fall period is strong, too. In 2012 our summer and fall were not record breaking types of numbers. It was the first quarter in 2012 that was out of control record breaking.”
The former senator made the comment as he defended the trade group’s ratings efforts. They came under fire when the MPAA initially gave Bully, a Weinstein Co documentary about teenage bullying, an R due to characters’ use of profanity. The rating would have made the film off-limits for the very teens the movie was designed to help. (The producers ultimately cut a few of the words, and won a PG-13 rating.) Although Dodd says that the public should have a clearer sense of what goes into the decision making, he told reporters in a meeting that the people who make the judgments have “a thankless job” in a system that basically “works well.” National Association of Theatre Owners CEO John Fithian concurred. If the MPAA didn’t take on the assignment then it could result in government censorship or local ratings. That would result in havoc because “what people care about in LA is vastly different than what they care about in Omaha.” Although the ratings process results in lost ticket sales, “the alternative is far worse.”
The CEOs of the MPAA and the National Association of Theatre Owners used their opening addresses to the exhibition industry’s CinemaCon convention today to advocate a new spirit of cooperation between the embattled and often warring businesses. Last year’s convention “ended on a sour note,” NATO CEO John Fithian said, when word spread that three studios planned to launch a premium VOD experiment — they let DirecTV offer some movies two months after their theatrical release for $30 a viewing. That threatened to give audiences an incentive to stay at home, theater owners feared. But Fithian says that the experiment “was not a resounding success.” Now, he says, theaters and studios are “talking about how to grow the business together.” MPAA chief Chris Dodd also talked up the need to persuade audiences that “the movie-going experience remains something special, something to be savored and enjoyed, something so innovative and creative that it cannot be duplicated at home no matter how many boxes they have.” He also thanked theater owners for supporting a big issue on his agenda: legislation to combat movie piracy. The MPAA ended up with a black eye this year when it failed to persuade Congress to pass the controversial bills that would have empowered the government to block sites run by overseas pirates. “I urge you to continue to be a part of a thoughtful and rational solution to protecting intellectual property,” Dodd told theater owners. He added that he remains “committed to doing all I can to achieve a satisfactory resolution to the protection of intellectual property” and is trying to build bridges to the tech industry which opposed the bills.
MPAA head Chris Dodd and John Fithian, president/CEO of the National Association of Theatre Owners, brought their lobbying on behalf of content creators to a packed house at the Sundance Film Festival today. Both admitted to the panel they were blindsided by the swift backlash their organizations faced in their effort to pass the U.S. House of Representatives’ Stop Online Piracy Act and the U.S. Senate’s version Protect IP Act. The panel’s moderator called the MPAA and NATO to task for the legislation’s effective defeat: “You got your butt kicked.” It follows heavyweights like Google, Wikipedia, and thousands of websites joining forces and protesting what they claimed was a move to suppress free speech.
NATO’s Fithian said he had never witnessed such a reversal in momentum considering the legislation’s passage seemed all but assured in October. “This was the most amazing turnaround of public opinion in the 25 years I’ve been a professional lobbyist. We were up there since Day One and took 25 of my [exhibitor] CEOs and met with 50 members of Congress. We asked each member of Congress if there was anything they need to make the legislation clear and nobody said anything. Google read the legislation at the same time and didn’t say a word. But in November the greatest backlash ever occurred.” Fithian described the pushback as scare-mongering that convinced the public the legislation would shut down the internet. “For people who have spent …
Some of Washington’s most powerful lobby groups ramped up their fight today over the Stop Online Piracy Act, which was just introduced in the U.S. House of Representatives. The Independent Film & Television Alliance echoed points that MPAA chief Chris Dodd made in a speech today — that the bill empowering the government to block overseas websites that traffic in copyrighted content would protect jobs. It’s needed to stop “drastic damage to the legitimate marketplace … measured both in films that cannot be produced and in lost returns on investment in films that have been,” IFTA CEO Jean Prewitt said. National Association of Theatre Owners CEO John Fithian adds that the legislation “is an important step to protect the jobs of 160,000 movie theater employees and sustain one of the vital engines of the nation’s economic growth.” The plan also was supported by a collection of unions including the American Federation of Musicians, American Federation of Television and Radio Artists, Directors Guild of America, International Alliance of Theatrical Stage Employees, International Brotherhood of Teamsters, and Screen Actors Guild. If the bill doesn’t become law, they said in a joint statement, then “rogue sites will continue to siphon away wages and benefits from members of the creative community, greatly compromising our industry’s ability to foster creativity, provide opportunities, and ensure good jobs.”
But Consumer Electronics Association CEO Gary Shapiro warned that if Congress passes the bill — also known as the Protect IP Act — then “the notoriously litigious content industry could simply accuse a site that it is selling a product that could ‘enable or facilitate’ a copyright infringement, thereby allowing accusations to shut down sites vital to the Internet economy.” He says that “could lead to mass shutdowns of websites and Internet-enabled services.” The group plans to bring several Internet venture capitalists to Washington tomorrow to make that case.
The battle lines are starting to harden around who’ll pay for those lame-looking 3D glasses. I’ve learned that other studios might line up behind Sony’s decision to stop paying the average 50-cents a pair fee beginning in May. Rival studios tell me Fox is on board. “We’re studying our options, but haven’t made any decisions yet,” denied Fox Filmed Entertainment spokesman Chris Petrikin. Remember, Fox was first in line to try to stop paying for glasses back in 2009 when it released Ice Age. But then had to abandon that effort after theaters rebelled. Sony was technically correct today when it said in a statement that “there never has been” a formal agreement stipulating that studios would shoulder the cost of 3D glasses. But it’s easy to understand why exhibitors are stunned by Sony’s stoppage. Because it changes an understanding that’s been in place since 2005 when Disney’s Chicken Little kicked off the 3D movie phenom.
“It is a radical departure from what the practice has been,” National Association of Theater Owners President John Fithian tells me. Now Regal CEO Amy Miles warns that if studios end the practice then it could “result in fewer screens exhibiting 3D films”. That’s bad news for Hollywood, which plans to release 39 films in 3D next year, vs. 36 in 2011. Exhibitors might encourage consumers to bring their own 3D glasses. That may be the future anyway. But BTIG analyst Rich Greenfield says if theaters require payment for 3D specs on top of the typical 3D surcharge ($3.25 to $4 a ticket), then “the U.S. moviegoer will reject this as another way for exhibitors to milk them and further decrease their interest in 3D (and perhaps going to the movies in general)”.
The fight is over glasses manufactured for RealD which it, in turn, supplies them to theaters. RealD’s stock price was down -14.7% today on the Sony news. The 3D tech company won’t disclose
Washington, D.C. (September 7, 2011) — The National Association of Theatre Owners (NATO) today announced summer 2011 box office reached a new record of $4.4 billion. Summer admissions were up an estimated 1.0% over summer 2010 to 546 million. 2011 also marked the fifth consecutive summer in which box office revenues exceeded $4 billion. (Summer is defined as running from the first full weekend in May through Labor Day of each year.)
NATO president and CEO John Fithian stated, “In the midst of 9% unemployment and a continuing weak economy, it is striking that the movie theater industry can continue to grow revenues and admissions. Along with our distribution partners, movie theaters offer compelling entertainment in state-of-the-art facilities at reasonable prices. In a weak economy or strong, the movie theater remains the first and most affordable choice in out-of-home entertainment.”
Both box office and admissions have rebounded strongly since the difficult Q1 comparison with 2010. Second quarter box office outstripped the same quarter in 2010 by 4.4%. Admissions were ahead by 2%. The -21% first quarter gap has been nearly erased, with year-to-date box office behind 2010 by only 4.3% and a likely very strong fall and holiday period ahead.
Theater Owners Fight Premium VOD In Canada, As Chris Nolan, Quentin Tarantino And Others Join Outcry
In a keynote speech at industry confab ShowCanada, NATO President & CEO John Fithian today urged Canadian movie theater operators to be vigilant in their focus on theatrical release windows. Challenging a recently announced proposal from four Hollywood studios to release movies early to the home on “premium” VOD, Fithian explained the dangers of the model. “Early VOD releases to the home could damage the movie industry in two significant ways,” Fithian asserted. “Early releases will reduce movie ticket sales, and will exacerbate movie theft by giving pirates an early pristine copy of movies.” Fithian also reiterated NATO’s call for the participating studios to release sales data from their experiment. “How can the industry evaluate the studios’ test if they continue to hide the facts.”
Fithian’s remarks at ShowCanada marked an expanded, global phase in NATO’s work to preserve the theatrical release window. Beginning with Canada this week, moving to Europe later in the month and onto Australia in August, Fithian will hold dozens of meetings with leading international exhibitors on the topic. “We hope that this early VOD experiment begins and ends in the U.S.,” Fithian continued. “But if not, we want exhibitors everywhere to be prepared.”