Exhibition industry investors are raising the question today after the No. 1 chain whiffed in its Q4 earnings report last night. Revenues and earnings fell short of expectations. But many are particularly concerned about the disclosure that attendance …
The latest battle in the theater etiquette wars went down Monday in Toronto — of all places, in a Press & Industry screening that pitted press vs. the fest and ended in a call to 911. Shortly after the P&I screening of Ti West’s new thriller The Sacrament began, FirstShowing.net blogger Alex Billington made numerous complaints to festival reps that a patron in the first row was holding a cell phone up towards the screen. When officials refused to take action, Billington called 911 to report a crime of piracy in progress; the 911 dispatcher laughed at Billington’s complaint and the blogger admits now it was a “mistake” to call emergency services instead of a non-emergency number.
The flap is making headlines for Billington’s 911 call, but it revives the hot-button debate over movie theater talking and texting. Sanctioned cell phone use in movies sparked controversy last year at CinemaCon when theater chain owners floated the idea of letting patrons text during screenings. And another journalist in attendance Monday said it appeared the offender was taking pictures of the screen. But Billington says he was told by festival reps that it’s an “unwritten policy” to allow use of any and all devices in P&I screenings. This despite TIFF’s warning ahead of both P&I screenings and public screenings that forbids cell phone use during films.
The premium seating business has boomed in the last few years by as much as 60-70%, vendors tell me. That’s thanks to the new industry emphasis on high end moviegoing and the fact that the costly conversion from 35mm to digital projection is nearly complete across the industry. Per unit prices offered by a half-dozen companies at CinemaCon this year range from $500 to $5,000. Upgrade costs range depending on theater sizing and seating choices but one firm told me their clients’ average spend on seating alone is $200K per theater. Exhibitors of all sizes and regions are taking out standard 18- to 19-inch seats in favor of upgrades as wide as 25 inches or more, even if that means fewer seats in theaters. The polite reason is that “people are getting bigger” and will pay for comfort. (Could candy, food, and supersized soda sales have something to do with that?)
Alamo Drafthouse Cinema’s Tim Reed made the observation this morning at the most refreshingly frank panel about the problems theaters face that I’ve seen so far at the industry event. He says that execs have ”done a horrible job building a fan base for the movie business over the last two decades.” That’s a problem because “we’re in a battle now…We’re brick and mortar. We’ve see a lot of brick and mortar businesses go down. We have to be nimble and find content that will sell to our base” — including young people to “make them movie-going fans.” He and others on the International Cinema Technology Association’s panel agreed that theaters need to become more aggressive about introducing alternative content including live sports and concerts. “This is the year for satellite (distribution) and that whole conversation,” Walt Disney Studios Motion Pictures VP for Strategic Planning Paul Holliman says. But movie distributors have to help by relaxing their terms. For example, Warner Bros International Cinemas President Millard Ochs says studios could just require that a film be shown six nights a week instead of seven after it’s been out three weeks. “We have to change. Everything is changing around us.” Still, Reed warns that alternative content can be expensive and execs don’t know yet what material will pay off. “What we have found is that it’s more market driven on a psychographic level,” he says.
NYC exhibitors escaped Mayor Bloomberg’s attempted soda ban last month. But potential future government regulation of revenue-boosting concessions still has theater owners and operators concerned. And frustrated. “[These] taxations are truly money grabs by the government”, Cinemark Food & Beverage VP Bob Shimmin said at a CinemaCon panel this morning. “They’re not trying to make people healthier, they’re trying to balance their budgets”. Bloomberg’s rule would have limited sales of sugary soft drinks to 16 oz.-sized cups — the smallest portion most theaters even offer. Pushing smaller cup sizes to adults would actually backfire, spins NATO’s Deputy Director of Government Affairs Todd Halstead, because it would lead to more purchasing of refills leading to larger in-theater consumption after all. He insists the NYC soda ban was just the tip of the iceberg: “What better way is there to institute a tax then to connect it to health?”
The upstart exhibitor has expanded its reach since launching in 1997, going from a single theater in Austin, Texas to a mini indie empire with 10 locations in Texas and additional outposts in Winchester, VA, Kansas City, MO, and Littleton, CO. But despite recent moves into San Francisco, Kalamazoo, the Washington DC area and New York, where three new locations are planned for Manhattan, Yonkers, and Brooklyn, Los Angeles has proven a tricky market for Drafthouse to break into. Today LA developer Saeed Farkhondehpour said that Drafthouse is this close to bringing a 30,000-square-foot eight-screen theater downtown where a parking lot currently sits. But reps for the exhibitor caution that ink hasn’t yet been put to paper on a deal. “We have had discussions but no formalized agreement”, an Alamo Drafthouse spokesperson told Deadline.
Bond analysis firm Fitch Ratings offers its bracing analysis of the movie exhibition industry a week ahead of theater owners’ annual CinemaCon trade show in Las Vegas. The company forecasts a “modest” decline in 2013 ticket sales and long-term challenges …
Theater owners don’t want to keep adjusting prices for tickets and concessions based on the movie or time of day, but they also don’t like seeing 88% of their seats left unfilled. That may create an opening for Dealflicks, a Priceline-like service that enables exhibitors to offer discounts tailored to …
Theater owners and investors won’t find much encouraging news in the latest overview of the exhibition industry by Moody’s Investors Service. “Despite an increase of about 6% in US and Canadian movie theater admissions in 2012, the overall trend is negative,” the debt-rating firm’s Assistant VP Karen Berckmann says this morning. Last year’s increase shows that “appealing product will still draw people to theaters.” But attendance remains 15% lower than it was in 2002 when it came close to 1.6B. “Given alternatives for consumers’ leisure time — from video games to Netflix to web surfing — we do not expect a rebound in movie attendance,” she says. Exhibition chains also have discovered that if they continue to raise ticket prices then “they risk turning off customers and reducing attendance.” What to do? Theaters have fattened their bottom lines by improving concession offerings, selling more on-screen ads, showing alternative content (such as concerts and sports events) on slow nights, and generally cutting costs. The premium-priced tickets for 3D movies are probably a wash since they also come with higher licensing costs, but could provide some modest help as studios and theaters experiment with the format.
WESTFIELD, N.J. & VISTA, Calif.– Digital Cinema Destinations Corp. (NasdaqCM: DCIN), a fast-growing motion picture exhibitor dedicated to transforming movie theaters into digital entertainment centers, together with its new joint venture partner, Start Media, LLC, today announced the closing of the purchase of seven theaters with an aggregate of 74 fully digital screens from UltraStar Cinemas.
The acquisition includes six theaters located in the Southern California/San Diego market and a seventh theater based near Phoenix, AZ. Digiplex now operates 16 theaters with 159 screens located in CA, PA, CT, NJ and AZ.
B. Riley & Co analyst Eric Wold is so encouraged that he raised his earnings estimates for Regal, Carmike, and Cinemark this morning — the second time he has done so in less than two weeks. And yesterday Stifel Nicolaus’ Benjamin Mogil upped his projections for Regal and Cinemark, also citing recent theatrical sales. The domestic Q4 box office is up 20.2% to date vs the same period last year. Even if sales cool slightly and the quarter finishes +17.4% then “it would just beat out the current Q4 box office record currently held by 2009, while also representing the sixth highest quarterly box office revenues in history,” Wold says. The good news is that theaters aren’t just benefiting from expected blockbusters led by Sony/MGM’s Skyfall and Lionsgate’s The Twilight Sage: Breaking Dawn Part 2. The $100M+ ticket sales for Sony’s Hotel Transylvania, Fox’s Taken 2, Warner Bros’ Argo, and Disney’s Wreck-It Ralph “demonstrate the continued broad-based strength of both box office and attendance trends even during what could be considered a less-than-optimal movie-going environment (e.g., tough economy and natural disasters),” Wold says.
Theater owners believe they still have a good shot to beat the rule, adopted yesterday by the New York City Board of Health, that would ban sales of large sized sugar drinks in movie houses, restaurants and other …