The average consumer outlay for tickets, from the National Association of Theatre Owners, is down 0.6% vs the same three-month period in 2013 — mostly due to a drop in attendance for premium-priced 3D and large-screen films. Box office for the quarter was down 6.6% as tentpole films including The Amazing Spider-Man 2, A Million Ways To Die In the West, and Captain America: The Winter Solider fell short of some analysts’ expectations. Janney Capital Markets’ Tony Wible, for one, noted that in Q2 “64% of tentpoles underperformed [his forecasts] and offset stronger performance by Maleficent, Transformers, 22 Jump Street and Godzilla.” The $8.33 average price in Q2 was up 4.6% vs the first three months of the year, a period when studios typically release few 3D films. Consumers paid an average of $8.13 for a movie ticket in 2013.
Interstellar director Christopher Nolan has long been a vocal champion of film over digital. This week, asked to play Nostradamus in a WSJ op-ed on the future of moviegoing, the filmmaker has made predictions for the “bleak” digital future months after appealing to theater owners at CinemaCon.
Studios have already largely phased out film prints in favor of digital files. Nolan writes that the digital future of exhibition risks reducing films to “content” that can be easily viewed on mobile devices and other alternative screens “and the idea would be that movie theaters should acknowledge their place as just another of these ‘platforms,’ albeit with bigger screens and cupholders.”
With content digitized, theaters of the future will be able to track best-selling films and program accordingly: “A movie’s Friday matinees would determine whether it even gets an evening screening, or whether the projector switches back to last week’s blockbuster. This process could even be automated based on ticket sales in the interests of ‘fairness.’” As a result, he says, it’s smaller films that will wind up with the short straw as audiences opt between home viewing and the more “familiar” studio fare.
But Nolan predicts consumer desires can shift back again as moviegoers seeking the shared experience of going to a theater and theater owners entice them back with upgrades. “The theatrical window is to the movie business what live concerts are to the music business — and no one goes to a concert to be played an MP3 on a bare stage.” It’ll be spectacle event films and new filmmaker voices that entice moviegoers back to the grand theaters of the future, he says.
Like, say, Interstellar?
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.”
That’s up just 2 cents vs the same period in 2013, and down from $8.35 in Q4 according to domestic numbers out this morning from the National Association of Theater Owners. The drop from the end of the year mostly reflects the fact that theaters in Q1 were filled with kids’ films including Frozen, Mr. Peabody And Sherman, and The Lego Movie. They typically drive the ticket averages down because they include a lot of low-priced children’s tickets and matinees. Remember that several factors influence the average price — including how many people pay a premium to see a film in 3D or on an IMAX screen. The Q4 number included 3D hits with Warner Bros’ Gravity (80% of its domestic gross came from 3D venues) and The Hobbit: The Desolation Of Smaug, and Disney’s Thor: The Dark World. The quarter also had several popular films targeted to adults including Paramount’s The Wolf Of Wall Street and Sony’s American Hustle. The average outlay for a movie ticket in 2013 was $8.13.
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.
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom catch up on the many highlights from earnings season announcements, beginning with those by possible dance partners Comcast and Time Warner Cable and what their news might mean for Comcast’s takeover bid. They also take the market temperature on Viacom and tech giants led by Google — which sold off its Motorola Mobility unit after owning it just two years — and Facebook, Apple, Yahoo and Amazon. They also look at exhibitors’ demands for shorter movie trailers and whether studios will play along.
Looks like Variety got carried away this afternoon with a story that says “several prominent exhibitors” are rejecting the National Association of Theatre Owners‘new voluntary guidelines calling for a two-minute cap on movie trailers. The site named two chains – Cinemark and AMC Entertainment — saying that their defection raises ”the question of why NATO is pushing the issue at all.” Just one thing: AMC denies the story’s claim that it “has reversed its position” after its rep on the NATO board voted for the new guidelines. “AMC Theatres is in full support of the voluntary NATO In-Theatre Marketing Guidelines, which at their core are about the more efficient and effective use of our industry’s marketing resources,” the company says. “Recently published letters, articles and commentary we’ve seen throughout the industry badly misrepresent the intent of these guidelines. As has always been our practice, this and all studio dealings will be handled directly with our distribution partners as we seek to maximize the box office performance of their films, and we expect that practice to continue.”
Average ticket outlays were slightly lower than in Q2 when they hit $8.38, according to the National Association of Theater Owners. Still, the trade group’s latest number is up 3.7% vs the same period in 2012, making it the biggest year-over-year quarterly jump since early 2010. For the full year, consumers spent an average of $8.13 for a ticket, a new high that’s +2.1% vs 2012. Remember that several factors influence the average price — including how many people pay a premium to see a film in 3D or on an IMAX screen. The Q4 number was expected to be relatively high: The quarter had 3D hits with Warner Bros’ Gravity (80% of its domestic gross came from 3D venues) and The Hobbit: The Desolation Of Smaug, and Disney’s Frozen and Thor: The Dark World. The quarter also had several popular films targeted to adults including Paramount’s The Wolf Of Wall Street and Sony’s American Hustle. Ticket prices for adult-themed films are typically higher than they are for children’s fare.
On Saturday, Netflix chief content officer Ted Sarandos outraged NATO when he slammed theater owners with potentially killing the movie business. Here’s Sarandos’ keynote speech at Film Independent‘s 9th annual confab at DGA HQ.
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 average was 0.8% higher than in the same period last year, and a dime lower than in 2011′s Q3, according to data just out from the National Association of Theater Owners. The relatively small increase likely reflects the anemic performance of many premium-priced 3D films: The average price reflects the amount that consumers paid for tickets, not just the price that theaters charged for, say, a 2D admission. Domestic box office revenues were up about 6.5% to about $3B in Q3 led by releases including Universal’s Despicable Me 2, and Warner Bros’ We’re The Millers and The Conjuring. Ticket prices typically fall from Q2 to Q3 and this year was no exception. Moviegoers paid a record $8.38 for each admission in Q2.
(Washington, D.C. and North Hollywood, Calif. – 8 October 2013) The National Association of Theatre Owners (NATO), announced today the election of new officers to two-year terms by the Executive Board of Directors at the association’s annual meeting, October 2-3, 2013 at the Park Hyatt hotel in Washington, D.C. Prior to the meeting, on October 1, NATO members took part in Hill Day visits to senators and representatives on Capitol Hill, even as the federal government shut down over political gridlock.
This is the highest average price we’ve seen in years. The National Association of Theater Owners‘ Q2 stat is +5.5% vs Q1, and +3.2% over last year’s Q2. NATO‘s numbers can be a little confusing: They represent the average consumer outlay for a ticket, not the average price of, say, a ticket for a conventional 2D film. The number often fluctuates to reflect the demand for premium priced 3D and large screen movies. And in Q2 there were more hits than in the period last year, as well as more hits released in IMAX or that ran in theater chains’ proprietary large screen formats. Some seven films generated more than $100M at domestic box offices in Q2 vs three that did so in the same period last year. Overall box office sales were +7.8% year-over-year helped by crowd-pleasers including Disney’s Iron Man 3, Warner Bros’ Man Of Steel, and Paramount’s Star Trek Into Darkness. Combined with the average $7.94 ticket price in Q1, NATO says that theaters typically charged $8.16 in the first half of 2013.
The price the average moviegoer spent for a ticket in the first three months of 2013 is down from last year’s average of $7.96 and Q4′s $8.05, according to the National Association of Theater Owners. Prices also were basically flat vs early 2012 when buyers spent an average of $7.92. Ticket outlays peaked at $8.12 in last year’s Q2.
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 …