Sundance Provides A Perfect Environment For Industrial Eavesdropping

Sundance Film Festival 2015

One unique aspect of the Sundance Film Festival is the broad spectrum of industry professionals that attend each year’s event. Producers, directors, editors, screenwriters, craft people, acquisitions executives, journalists, distributor reps, sales agents, talent agents, and exhibitors are just some of those who turn up in Park City, Utah by the thousands hoping to find the next big indie hit.

Like many film festivals, one may spend as much time waiting in lines at Sundance as they do watching actual movies. Because Sundance holds special screenings for accredited press and industry attendees, the odds of standing in line with a contemporary, competitor, client or partner is highly likely.

At Sundance this usually means distributors of all sorts rubbing shoulders, often literally, with the very exhibitors and theatre owners they hope eventually play their movies. This creates an environment which flushes out certain trade activity rarely seen in public; distributors pitching exhibitors on current or upcoming releases and film buyers having to make programming decisions on-the-fly, and worse, face-to-face.

A typical scenario played out on Friday evening in the line for a hastily added industry screening of “The Witch“, a period horror film which has been receiving a lot of attention here at Sundance.

Queuing in the tent outside the Holiday Theatre Gary Palmucci, Vice President of Theatrical Distribution for Kino Lorber, spotted a film buyer for an exhibitor who regularly books his company’s films. Standing on opposite sides of the cattle gates used by the festival to stack audiences in Disneyland-like fashion, Palmucci asked the programmer (who we’ll keep anonymous) about his decision not to book “Goodbye To Language 3D“. The title, being distributed by Kino Lorber, is the latest film from French auteur Jean Luc Godard and is shot in 3D, a format he openly despises.

With the stage set and our characters defined, here is how the scene played out:

Gary Palmucci: Why didn’t you play Godard?

Exhibitor: (Stunned silence with a facial expression that clearly shows he is looking for a valid, non-offensive response).

GP: It’s selling out all its playdates. BAM did 1,400 in two screenings. [Brooklyn Academy of Music is usually a legit theatre]. We did really great there.

Exhibitor: Yeah I heard about that. (Looks to a colleague for assistance on what to say).

GP: Well you should have played it then. I never heard back from you and had to give it to [name of competitive art house] on the other side of town. You probably would have done better with it.

Exhibitor: Really?! [Art house competitor] is going to play the Godard? (Shoots an uncomfortable look to colleague who seems just as surprised at the news).

GP: You really should book it.

Exhibitor: Well by the time [art house competitor] is done with their run… it’s not really worth us playing it then, but maybe.

GP: Well yeah, it will already have played, but it will still get an audience.

Exhibitor: (Feeling trapped). It’s definitely something we can reconsider in a couple months, but not right after [competitor's] run.

Before the conversation (or negotiation) could come to a natural conclusion, festival volunteers began ushering audience members into the screening, the line began to snake forward, pulling Palmucci and the exhibitor apart.

Such exchanges are quite normal when distributors are pitching theatre owners on upcoming titles. However, when conducted in person, tense body language and averted eye contact can quickly make them uncomfortable. In this instance both parties were playing out their respective jobs admirably. Palmucci was pushing his company’s movie and the exhibitor was making (or defending) a valid programming decision.

Read More »

 

Laser, the Next Big Digital Transition as the Xenon Lamp Fades Away

NEC laser projector

This year (2015) is definitively the year the world became completely digital as Sundance Film Festival announced that not one film shown was on celluloid-film. Most of the major markets are now completely digital. If you listen carefully, you can hear tens of thousands of cinema owners letting out a sigh of relief as they think now that the transition is over they can forget about it for the foreseeable future. Unfortunately this is not the case.

The use of lasers as a light source has been an interesting topic for many years. It has taken a change in government restrictions/regulations to put a rocket under laser, and it is literally taking off. We now have Barco and Christie with LPF (Large Premium Format) offerings. But more importantly, it is the NEC BPP (Blue Pump Phosphor) that is of most interest.

Recently Bill Back, now at Barco, did a detailed techical presentation of Laser for SMPTE. After watching this presentation and a number of follow up Emails, it became clear to me that BPP-based laser projectors would flood that market in 2015.

NEC has shown BPP-Laser works well with small screen solutions.  This year we will see the next generation of BPP-Laser projectors based on more effective Blue Lasers allowing BPP-Laser based projectors to replace small, medium and potentially large cinema projectors. It was also made very clear that Xenon, at current prices, would quickly be overtaken by laser, making Xenon solutions obsolete.

This leads to a realisation of another equipment transition. If projector vendors stop making Xenon projectors, this would eventually lead to Xenon lamps no longer being manufactured, and we are back to a similar situation to film.

Read More »

 

Daily Cinema Digest – Monday 26 January 2015

Imax Carnival Vista

USA – Given how large cruise ships have become it was inevitable that sooner or later one of them would get an Imax cinema.

Carnival is partnering with entertainment innovator IMAX® to bring the world’s most immersive cinematic experience to sea with the first-ever IMAX® Theatre on a ship. Guests will take in the latest Hollywood blockbusters, IMAX classics and IMAX documentary content on a screen that’s three decks high. Next door at the Thrill Theater, moviegoers can enjoy a multi-dimensional special effects experience. Both are part of the Carnival Multiplex, a first at sea for film fans, complete with concession stand offering popcorn and movie snacks. The Warehouse, featuring a variety of video and arcade games, is located adjacent to the Carnival Multiplex.

The largest ship in the fleet, Carnival Vista will measure 133,500 tons, 1,055 feet long and have a guest capacity of 3,936 (based on two per cabin). The new vessel will debut May 1, 2016, with a 13-day cruise departing from Trieste, Italy — the first European voyage for Carnival in three years.  LINK

Theory of Everything

Having evicted a man in a wheelchair last week, Odeon is then unable to provide access to a screening of “The Theory of Everything” for – wait for it – a boy in a wheelchair.

An Odeon cinema in Harrogate has told a disabled boy that they couldn’t accommodate his wheelchair for any of its nine weekend screenings of Stephen Hawking biopic The Theory of Everything – including ones on national Disabled Access Day.

His mother Kelly told the Mirror: “He said to me the film was supposed to inspire people but how can somebody in a ­wheelchair be inspired if they can’t see it? I cried when he said that.” The boy, 12-year-old Joe France, said that he was “disappointed”, as “Stephen Hawking is one of my top three heroes. I thought it was going to be a very special day.”  LINK

Read More »

 

Daily Cinema Digest – Saturday 24 January 2015

Art House Convergence

Since 2008, just before the Sundance Film Festival begins in mid-January, art house cinema operators from around North America (and beyond) have been gathering for Art House Convergence. The conference is held over four days in Midway, Utah, not far from Park City where Sundance takes place.

A record 500 attendees showed up for this year’s event, representing independent theatre operators, non-profit cultural centers, distributors, and the many companies that support and work with art houses (think Vista Entertainment Solutions, NEC, Ymagis, Sonic Equipment, etc.). There was more information and news coming out of Art House Convergence this week than we can possibly cover here in the digest, so we’ll be following up on many of the leads gathered there over the coming weeks. Instead, we’d like to focus on two corporate announcements that got those at the confab buzzing.

First up was Tugg, the on-demand-movie service that allows audiences to request screenings of titles at a given movie theatre on a specific date. If enough audience members sign-up ahead of time, the film is booked and played. The three year old start-up is now partnering with New Balloon, which is being described in the media as a cross-platform media venture whose purpose is “advancing innovative storytelling technologies”. If that sounds rather subjective, or confusing, then you’ll likely be thrown by how Anne Thompson of Indiewire describes the initiative the two companies are teaming up on:

They will form a multi-million dollar Event Cinema Fund. Through the fund, both companies will provide high-impact investment capital, expertise, and other resources toward marketing and distributing culturally significant films.

Our suggestion is to read Thompson’s piece on the announcement. It’s filled with the usual buzz phrases found in such announcements like “enhance traditional release strategies”. This is no fault of Thompson, as companies often struggle to convey these types of hybrid, experimental efforts when talking to the media and thus often fall into the trap of using such language.

Thompson, who was one of the keynote speakers at this year’s Art House Convergence (and deservedly so), also reported on a more straightforward bit of news about content distributor Emerging Pictures, which was acquired by 20 Years Media Corp., a digital media company based in Vancouver.

I ran into Ira Deutchman, co-founder of Emerging Pictures as well as chairman of the film program at Columbia University School of the Arts, on the first day of Sundance. He explained the deal was meant to give Emerging Pictures the deep pockets required to take the company to its logical next level. Having helped overcome the many digital distribution hurdles alternative content and niche films often face, the next obstacle Deutchman believes will be marketing.

Read More »

 

China Cinema Digest – Thursday 22 January 2015

Wanda Cinema Line Logo

Sina Finance highlights three pertinent questions about Wanda Cinemas raised during the ‘road show’ ahead of the company’s IPO.

Concerned about the point two: how to face the the new media shocks?

In the conference, another concern is that the new media development, Wanda Cinema traditional marketing model of how to face the competition…

In this regard, Zeng-Mao also said that at present the company a single month counter ticketing and network ticketing of the proportion of month 6: 4, 2013 box office income share 76.74%, network sales at present in a single month accounting for about 40%, network sales accounting for showed a gradual upward trend, company there are Wanda movie network, Wanda movie APP such as its own electronic channels, at the same time also, and domestic professional network of ticketing website cooperation.

At present, Wanda Cinema uses a “cinema system” model of development, Ye Ning said Wanda Cinema business uses a pure asset coupling mode, is currently well-known theaters in only one using the model of the company.  LINK

China cinema box office split

On the occasion of Wanda Cinema’s IPO a good in-depth overview of how the cinema market works in China and Wanda’s role, down to specifics of revenue split and tax, is provided by Win Business Network . Several pages long, but worth reading in full.

Cinemas implement licensing system, the relevant policies and regulations, 15 or more in assets and the distribution for the film in theaters as a link to the different provincial regions, provinces can set up a cinema company. As of the end of 2013 there were 45 theaters license.

Unity in accordance with their respective cinema theater company plans to row reflect the showing of the film.

American film industry chain is the core part of the copyright, movie box office revenues accounted for 30% of the film side (producers and issuers) income is less than, in addition to creating revenue through digital television, Internet video, brand licensing, and other aspects of overseas exports . Because domestic copyright, among other factors, led to 85% of the producers are the cinema box office revenue contribution.  LINK

Read More »

 

Why North American Movie Ticket Prices Rose In 2014

Movie Tickets In Popcorn

A week after the investment firm PricewaterhouseCooper released a survey in which found 53% of its 1,000 respondents felt movie tickets cost too much, the National Association of Theatre Owners (NATO) reports that the average cost of a movie ticket in 2014 rose to USD $8.17.

That figure is a 0.50% increase from the USD $8.13 average cost of a movie ticket in 2013. Movie ticket prices roller-coastered in 2014 from quarter-to-quarter but generally stayed above the USD $8 mark. The second quarter saw price levels topping out at USD $8.33 before declining to USD $8.08 during the third quarter before rising once again to USD $8.30 for the last three months of the year. Fourth quarter prices were actually down year-over-year from USD $8.33 in 2013.

We have found these numbers, taken without considering any context or analysis, can be a bit misleading. For instance, many industry-watchers might assume the cost of a movie ticket declined in the fourth quarter of 2014 because exhibitors were lowering prices to attract audiences during a down year in attendance and box office. While that may account for a portion of the decline, it’s also helpful to look at the releases in theatres during the fourth quarter of both years.

In 2013, “Gravity” was doing blockbuster business on its way to Academy Award nominations and Oscar wins. Because the film was shot in 3D and with IMAX in mind, many moviegoers chose to see it in those formats, both of which come with premium ticket prices. On the other hand, in 2014, we had “Interstellar” on its way to doing decent business, which though popular on IMAX was not released in 3D, and “The Hobbit: The Battle of the Five Armies” which performed weaker than expected.

This of course is assuming that the average ticket price is calculated by dividing the period’s box office by its admissions. Historically however, NATO has conducted a survey of its members to determine the average ticket price for a quarter or year.

Read More »

 

Cinema in China Is Still Headed for Crash – Five Trends Show Why

Taking of Tiger Mountain

With Wanda Cinema’s IPO imminent we thought it would be a good to revisit the article ‘China’s Multiplexes Are Headed For a Crash – Statistics Show Why‘ that we published last April. With another year of strong box office growth in China and no large scale cinemas going bust in the Mainland, were we wrong?

At the time we wrote that “It is too early to say whether Chinese cinema exhibitors are in for a hard crash or a soft landing, but a correction is now becoming overdue.” It increasingly seems like 2015 will be the year that the correction is due, with several troubling indicators making themselves felt.

We will not re-hash the arguments from the original article, which remain valid, so we urge anyone not familiar with it to read it first. We will instead look at some new factors that we did not highlight back then.

It is also worth noting that at the time overall growth in China was slipping below 8% and now it has fallen even more. For the third year running China has missed its export target and as the FT reports,

The missed target comes as China prepares to release annual gross domestic product figures next week that will show growth in the world’s largest economy (in purchasing power terms) came in below the government’s annual target for the first time since 1998.

This is the macroeconomic picture to keep in the back of the mind when discussing the cinema market in China.

In broad strokes, the five trends can be summarised as follows:

  1. Mistaken belief in a demographic cinema dividend;
  2. Unsustainable price-war in micro-blog ticket services;
  3. Inability of Hollywood films to fill a post-quota gap;
  4. Failure of Chinese film production due to censorship;
  5. A ‘hidden’ decline in the growth rate of the box office.

1 – The demographic cinema dividend fallacy

Wanda Cinema is very confidant about the future growth of the China cinema market, as stated in its IPO document, which begins with the bold claim “The company’s main business is the cinema industry, [and] the [cinema] industry has always come out on top”:

Our cinema industry in the future continue to benefit from the rapid growth of the film industry

In recent years, China’s film market continues to maintain a rapid development momentum, the movie industry revenue is expected to usher in the 2015-2016 phase of explosive growth. We believe that our large population, the urban population has a number of screens compared with Europe and other developed countries, a big gap under the background of the geographical distribution of the theater, the per capita number of screens there is a large room for improvement, the cinema industry will continue to maintain a high level of development.

This is a refrain often heard in discussions about Chinese cinema: that the country is under-screened compared to markets in Europe or that cinema attendance is low compared to that in the US. As the market matures it will continue to grow, is the belief.

Read More »

 

Amazon Enters Movie Business With Two Wise First Steps

Ted Hope

Ted Hope was hired as Head of Production for Amazon Original Movies

In a twist of the old adage “give them an inch and they’ll take a mile”, just a week after winning a Golden Globe for television series, musical or comedy for their show “Transparent”, web giant Amazon has announced its intentions to enter the movie business by producing theatrical releases. To show just how serious they are about the new venture, the company has hired indie film veteran Ted Hope as Head of Production for Amazon Original Movies.

Amazon already produces television shows for subscribers of its Amazon Prime program. Now in a strategy that mirrors Netflix, its streaming rival, Amazon is aiming to release roughly 12 movies per year in cinemas starting in late 2015. In a window shrinking move, Amazon will premiere each title on Amazon Prime Instant Video (at least in the United States) only four to eight weeks after their theatrical release.

The tight release window may sound like a deal breaker for theatre owners, and probably is for certain exhibitors, but keep in mind the type of films Amazon intends to distribute. “The movies in this program will be ‘indie’ movies,” Amazon Studios Vice President Roy Price told media outlets in an email. “We will be looking for visionary creators who want to make original, unforgettable movies. We expect budgets to be between $5 million and $25 million.”

As Price hinted at in Amazon’s press release announcing the news, independent films have increasingly been experimenting with day-and-date releases in various forms in hopes of augmenting even the most modest of theatrical releases:

“Not only will we bring Prime Instant Video customers exciting, unique, and exclusive films soon after a movie’s theatrical run, but we hope this program will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience.”

It doesn’t take an industry expert to read between the lines and understand Price is saying if it wasn’t for Amazon coming along, some of these movies might not even get made, let alone wind up in theatres. If indie films is their goal, then the company has certainly picked the right guy to head up the effort.

Hope is a well-known, highly experienced and savvy producer with deep ties to the independent film world. If his name sounds familiar, it should. He’s produced dozens of well known movies, many of them through Good Machine, which he co-founded and ran with screenwriter and the former head of Focus Features, James Schamus. During his tenure as a producer he’s made multiple films with Edward Burns, Hal Hartley, Todd Solondz and Ang Lee, as well as “21 Grams” with Alejandro González Iñárritu. More recently he spent a year running the San Francisco Film Society and until earlier this month was the head of Fandor, an online subscription streaming service that specializes in indie movies.

Read More »

 

Movie Theatres Face An Inevitable Netflix Effect

Diffusion of Netflix

As we begin the new year, I strongly believe we are entering a period of great danger and even greater uncertainty. Events are unfolding within and without the movie industry that are extremely threatening to our studio.

This is how Jeffrey Katzenberg began his now infamous 1991 memo which criticized the Walt Disney Studios, of which he was then chairman, and the overall state of the film business at the time. It’s hard to believe those words were written more than 20-years ago since they are so easily applicable to the current motion picture business.

Katzenberg penned his prophetic memo in 1990 during a rainy Christmas vacation in Hawaii. The end-of-year holidays are often a time of increased introspection on a multitude of subjects that range from personal to professional, from political to religious. A few consecutive days with a couple of extra unoccupied hours and and we all turn into armchair Nietsches. Like Katzenberg, I also came to a bit of a realization during our recent holiday season about the industry we all passionately toil away in.

Actually, if recent introspective pieces by Nick Dager at Digital Cinema Report and Luke Edwards at Pocket Lint are any indication, I’m not the only one who spent the holidays ruminating about the present and future of our business. These constructive assessments present qualitative research to diagnose the recent downturn in moviegoing attendance, attributing the cause to a number of factors, including the emergence of subscription streaming media services. To these treatises I would like to add some academic theorems that can be useful in helping us determine where theatrical exhibition falls on the curve of a typical market’s lifecycle as well as models that are useful in forecasting future market conditions.

Collecting Anecdotal Evidence
Because the mathematics and theories underlying diffusion theory can be dry and didactic, translating them to existing or real-world markets can at times seem confusing. Thus, I will attempt an explanation through an anecdote which initially coaxed my mind down the path of such market musings in the first place.

During the holiday break I witnessed innovation diffusion theory in action through the promulgation and/or unfamiliarity of over-the-top streaming services such as Netflix among extended family members and acquaintances. By applying simplified diffusion theories to this qualitative research I was able to discern the current market complexities and the far-reaching consequences motion picture exhibitors and distributors will undoubtedly face due to growing consumer adoption of online video streaming services.

Read More »

 

Daily Cinema Digest – Monday 19 January 2015

Microsoft smartphone cinema

Has Microsoft discovered a way to make smartphones less annoying in cinemas? For those who can’t bear to switch them off for a couple of hours, this could be the solution.

A patent granted to Microsoft this week could automatically adjust the settings on your phone to make it less annoying in movie theaters.

Granted on January 13, the patent details an “inconspicuous mode” which would automatically adjust brightness, mute sounds and offer reduced information on the lock screen when the owner goes to the theater or is about to head to bed.

Inconspicuous mode would be triggered using sensors on the device when visiting a venue like a movie theater, or could be manually enabled by the user.  LINK

regal-entertainment1

USA – Regal is not for sale. The company has decided against putting itself up for sale. It always seemed unlikely, more like a distraction from two consecutive quarters of bad growth.

Regal Entertainment Group, which operates the nation’s largest theater chain, is no longer looking for a buyer, the company said Thursday.

The Knoxville, Tenn.-based chain announced that its board of directors has “determined that a sale of the company would not be in the best interest of shareholders at this time,” according to a statement. “The board, consistent with its fiduciary duties, remains committed to evaluating any alternatives that would enhance shareholder value.”

Regal said it arrived at its decision after examining strategic alternatives with the advice of Morgan Stanley & Co.  LINK

Read More »