Category Archives: Daily News Roundup

Daily Cinema Digest – Wednesday 29 October 2014

Regal cinemas

“Psst, wanna buy a cinema?” That seems to be the not-so-subtle message from Regal, the largest cinema chain in the United States, which unexpectedly put a ‘For Sale’ sign on the front door. Speculations immediately focused on Alibab’s Jack Ma, though my gut instinct is that he won’t be following in the footsteps of Wanda/AMC, primarily because his background is not real-estate and there are no obvious Chinese-US synergies to be had from such a deal. A sovereign wealth fund if not VC outfit is more likely to be checking Regal’s numbers right now. Variety covers all the other angles.

Regal CEO Amy Miles was tight-lipped about the issue on an earnings call Monday with analysts and media, only offering that the company’s board felt it was “an opportune time to conduct a thorough review of our options.” But in an interview with Variety for a lengthy profile earlier this month, Miles may have inadvertently explained why Regal shifted from bidder to acquisition target.

“We’re all excited about the years 2015, 2016 and I’m going to be aggressive and say even 2017,” she told Variety at the time. “I think that (in the) environment of very healthy strong box office, it’s a natural time to think, ‘OK that might be a good time for an individual to exit.’ Value maximization happens in that environment.”  LINK

Dolby Doremi Logo

The European commission has give its go-ahead to the Dolby-Doremi merger. The approval was expected but was most likely sitting in the IN tray of some EU bureaucrat away on holiday, or it might have gone through earlier.

Dolby Laboratories (DLB.N) on Monday received EU clearance for its acquisition of digital cinema technology group Doremi, the European Commission said.

The Commission, which acts as the competition watchdog in the 28-member bloc, said that while there was overlap between the two companies in the digital cinema servers business, the merger did not distort the market.

“The proposed transaction would not lead to any anti-competitive effects because of the presence of alternative suppliers, the fast-moving nature of the market and the ease of switching for customers,” the Commission said in a statement on Monday.  LINK

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China Cinema Digest – Tuesday 28 October 2014

 

China online ticketing

Beginning in November, China will start reporting box office number and info using social media in an effort to improve transparency. The move is good news for Hollywood studios, but will also provide a better picture of the exhibition market in the world’s second largest cinema territory.

In July, the State General Administration of Press, Publication, Radio, Film and Television introduced an updated ticketing system, which gives better real-time information.

This week, Li Dong, head of a special unit of SAPPRFT which looks at ticketing and box office issues, said the watchdog was planning to release the information through popular social media, such as Weibo, which is similar to Twitter, and WeChat, which has parallels with WhatsApp. It wasn’t immediately clear at what frequency the data would be reported.  LINK

Wanda Cinemas Logo

The re-submission of their IPO prospectus has lead to plenty of coverage of Wanda Cinemas, including the astonishing revelation that the operator can manage the construction of an entire multiplex in just 105 days from start to finish. Lots of data, number and statistics in this article on China’s largest cinema operator, which still “only” accounts for less than 15% of total Mainland BO takings.

Coupling that is pure theater assets invested directly by theaters, cinemas and theaters all assets owned by relying on the model, capital and Wanda Cinema mode as a link for the film, its unified management, unified row theater piece. Since its inception in 2005, grossing Wanda Cinema faster growth each year, in 2011 box office revenue reached 1.785 billion yuan, accounting for the proportion of the movie grossed 13.61%; 2012 box office revenue reached 2.456 billion yuan, accounting for the movie box office income ratio was 14.39%; 2013, box office revenue reached 3.161 billion yuan, accounting for the proportion of the national film grossed 14.52%; 2014 January to June, the box office revenue reached 1.988 billion yuan, accounting for the proportion of movie box office revenue was 14.46%, continue to maintain the country’s first cinema box office revenue.

Wanda market share

Development of Wanda Wanda Plaza cinema into projects and tenant lease non Wanda commercial real estate development business projects, Wanda Cinema is the only strategic partner Wanda Plaza theater format, along with the rapid expansion of Wanda and other commercial real estate projects, Wanda cinema investment flourish, construction accelerated.

Wanda cinema investment and construction process is divided into the project site, theater design and theater construction, single Wanda cinema construction period is usually 105 days or so, in other words, after the completion of the siting and design of the theater, Wanda only three and a half months will be able to Wanda opened a theater. LINK

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Daily Cinema Digest – Monday 27 October 2014


regal-entertainment1
Regal lawsuit

Regal has escaped a major anti-trust lawsuit brought on by a small chain complaining about unfair film booking practices that favour larger cinema chains. Major implications in an age when 35mm scarcity is no longer a reason for denying smaller chains film “prints”. This is bad news for Look Cinema and other small exhibitors.

On Thursday, just a few days after The Wall Street Journal revealed that the DOJ was asking questions about these types of arrangements, a federal judge in California dismissed a lawsuit brought by Starlight Cinemas, the owner of a few independent movie theaters in California, against exhibition giant Regal Entertainment Group.

According to the lawsuit, filed in June, Starlight operates a state-of-the-art 15-screen movie theater in Corona, Calif., but has been suffering because Regal has been having more success licensing the blockbuster films from the likes of Sony and Universal. Regal operates an upscale 18-screen theater in Corona, but is advantaged by the fact that it controls approximately 575 theaters and 7,631 screens. So if studios wish to effectuate a “wide release,” they need cooperation from the likes of Regal. But according to the allegations, Regal demands exclusivity for that privilege.  LINK

Brixton Ritzy

UK – It proved a short-lived victory for the staff of the Brixton Ritzy cinema (owned by Picturehouse/Cineworld), who won the right to a Living Wage, only now to be told that a quarter of them will be laid off.

Picturehouse Cinemas said that the cost of increasing basic wages at the Ritzy Cinema in Brixton to £8.80 an hour would be absorbed by reducing the number of staff by at least 20, with a redundancy programme starting next month.

Two management posts will be axed along with eight supervisors, three technical staff and other front-of-house workers from its workforce of 93.

BECTU, the union that represents cinema staff, today described the move which follows a year of strikes and negotiations as a “kick in the teeth”.  LINK

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Daily Cinema Digest – Friday 24 October 2014

Ymagis and dcinex

The acquisition of dcinex by Ymagis has finally been approved by shareholders. This is the single largest and most important digital cinema consolidation in Europe as dcinex/Ymagis is without a pan-European competitor of similar size, facing instead competition on the national levels. From the translated French-only press release.

“We are convinced that the combination between dcinex Ymagis and will in the short term, create synergies creating value for all shareholders Ymagis” says Bart Diels, outgoing Chairman of the Board of Directors and Partner of dcinex GIMV (1).

Creation of the European leader in digital technology for the film industry

With the acquisition of dcinex, Ymagis performs an operation that will create a European leader in the provision of financial services and technology to the film industry.

Following this acquisition, Ymagis becomes:

The financier No. 1 Park cinemas in Europe deployed VPF contract with nearly 5800 auditoriums in 14 European countries;

The European leader in the sale and installation of cinema equipment operators with a share estimated at 20% of the European market;

Operator No. 1 st European network routing dematerialized content, with more than 3200 theaters in 15 countries connected in Europe;

Technical partner No. 1 Park cinemas in Europe as outsourcing and maintenance contract with nearly 7200 screens (about 36 000) under contract in 21 countries.  LINK

Dolby Logo

Dolby – Quarterly earnings from Dolby show revenue at USD $227 million, which was slightly above their own projections and full year-on-year revenue is up 6%.  Licensing revenue outweighs product and services revenue by more than 11:1 (USD $208.9 million to $18.1 million), so don’t be surprised that Atmos was not the first thing discussed in the earnings conference call (transcript courtesy of SeekingAlpha). They do say that “The amount of revenue we get from the Doremi acquisition in Q1 will depend on the actual timing of the close,” which is still pending approval in Brussels.

Turning to cinema. We’ve seen tremendous growth with Dolby Atmos, increasing our screens by 150% this year to over 750 screens committed globally. Providing content to these screens is a key focus, and we now have more than 200 titles released or announced in Dolby Atmos; which includes content from all of the major studios. 14 of the 15 highest grossing titles in 2014 were in Dolby Atmos and we have a strong slate for the rest of the year, including The Hunger Games: Mockingjay and The Hobbit: The Battle of the Five Armies.  LINK

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Daily Cinema Digest – Tuesday 21 October 2014

The Space Italy

Last week’s big news was the announcement that UK/European exhibitor Vue had acquired Italian cinema chain The Space. Having previously expanded into Germany and Poland, this was a vote of confidence in the troubled south European market – though The Space is the cinema leader in an otherwise fragmented market, plus Italy had unless most other European territories an excellent cinema year in 2014.

European exhibitor Vue Entertainment International said Thursday it has agreed to acquire The Space Entertainment, a cinema chain in Italy with 36 multiplex theaters with 362 screens.

The deal is Vue’s fourth acquisition in the past three years and is supported via a follow-on investment from the firm’s Canadian owners Omers Private Equity and AIMCo. Over the past three years, Vue has more than doubled the number of cinemas and screens under its ownership from 70 to 187 cinemas and from 678 to 1,727 screens.  LINK

Wanda Cinema

China (PRC) – Wanda has re-filed its IPO documents for a listing in Shenzen. So much for the conspiracy theories that the first failure was a face saving strategy to list in Hong Kong or abroad.

Wanda Cinema Line, China’s biggest theaters chain, has re-filed its application for an IPO.

Its earlier attempt to float on the Shenzhen stock market in July was denied by regulators who said that its documentation was insufficient.

The company plans to issue 60 million shares and raise RMB2 billion ($326 million) of fresh capital.  LINK

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Daily Cinema Digest – Friday 3 October 2014

RealD Founders Michael Lewis and Josh Greer

RealD founders Michael Lewis, left, and Josh Greer wear 3-D glasses inside their theater at their Beverly Hills headquarters. (Ken Hively / Los Angeles Times)

RealD shares debuted at USD $16 when the company first went public but are now languishing at less than ten dollars, so this unsolicited take-over bid should not come as a surprise.

RealD Inc. (RLD), the supplier of 3-D technology to cinemas, received a $12-a-share takeover bid from Starboard Value LP, the activist investor that’s pressing Yahoo! Inc. (YHOO) for changes. RealD shares soared.

Starboard holds a 9.9 percent stake in RealD, according to a regulatory filing yesterday. The offer represents a 29 percent premium over RealD’s $9.27 closing price yesterday in New York and values the company at about $600 million. The stock jumped 27 percent to $11.78 at the close in New York, the biggest one-day gain since the July 2010 IPO. LINK

ACGE Conference

Director Sylvain Guy Francois Macerola, Patrick Roy, president of Seville Pictures and Raffaele Papalia, president Cinemas Cine Entreprise

Canada (Quebeq) – French-speaking Canada has a new cinema association: l’Association pour le cinéma sur grand écran (ACGE).

Speakers from all areas of the film industry on the big screen on Wednesday announced the creation of the Association for movies on the big screen (ACGE), whose objective is to promote the cinematic experience.

As President, members ACGE elected unanimously Raffaele Papalia, president of Cinemas Cine Entreprise. The former president and CEO of SODEC François Macerola will act as a strategic advisor to the association.

According to Papalia, now is now conducive to union resources of members of the CGEA, “to analyze the challenges the film industry faces on the big screen.” The objectives of the new association will be to develop new approaches that will favor the revival of audiences, convey a positive and inclusive message to moviegoers and promote the cinema experience on the big screen. LINK

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Daily Cinema Digest – Wednesday 1 October 2014

Billy Elliot

Event cinema has a new hero and his name is Billy Elliot, having grossed more on the day it beamed than The Equalizer, the highest grossing film.

Universal’s live stream from London’s Victoria Palace Theatre last night [Sept 28] danced its way to an extraordinary $3.1m (£1.904m), setting a new record for Event Cinema releases.

Based on figures from Rentrak, in terms of theatre releases, Billy Elliot surpassed the previous best opening set by NT Live: War Horse at $2.5m (£1.6m). War Horse is also currently the highest grossing theatre release at $4.6m (£2.7m).  LINK

Good timing for Variety to cast a spotlight on event cinema, which accounts for almost a fifth of revenue of some art house screens and has saved many a rural cinemas.

Picturehouse director of distribution Marc Allenby says a like percentage of his company’s box office comes from such programming. “What’s remarkable,” he adds, “is that that 18% comes from such a small proportion of screenings.”

In Sweden, not only has the sector been a boon to rural cinemas, which struggle to book new film releases day-and-date with big cities, it also has enabled exhibs to take advantage of new revenue streams.

“A court decision said that when a cinema is screening opera or theater, it automatically becomes an opera house or theater, so legally, we can serve alcohol,” says Rickard Gramfors of Folkets Hus och Parker, which operates 170 cinemas in the nation.  LINK

Both of them will be attending the ECA event in London on 16 October – see our banner and side bar for details.

AMC premium seats

AMC is pushing ahead faster than planned with its re-seating plan of upgrading more of its cinemas to premium quality (and pricing). It will spend USD $39 million more than initially planned in the current year. Smart or desperate strategy? The answer is: ‘necessary’.

The approximately $39 million represents a nearly 20 percent increase from the estimated $200 million in planned net cash outlays in 2014. Actual total capital spending for 2014 will be approximately $265-$285 million, before expected landlord contributions of $35-$55 million.

The additional 2014 capital investment will primarily support the acceleration of recliner re-seat initiatives, additional MacGuffins bars and IMAX screens in AMC theatres. As of June 30, 2014, AMC had recliner re-seats in 44 locations with 505 screens, 74 MacGuffins and 148 IMAX screens, which makes AMC North America’s leading and largest IMAX distributor.

In December of 2013, AMC announced a $600 million, five-year recliner re-seat investment. During the second quarter of 2014, admissions revenues per screen increased by 33 percent and Adjusted EBITDA more than doubled at AMC’s 44 recliner re-seat locations.   LINK

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China Special Cinema Digest – Thursday 25 September 2014

Today we catch up Chinese cinema news from the last couple of weeks, which I was unable to report while travelling. As always, the Google translation is not perfect, but as we do not have a journalist on staff who can translate perfectly from Mandarin (yet!), it will have to do. We are also saving the biggest piece of cinema news to come out of China recently for a separate post.

Chen Xing technology laser

Our favourite Chinese (digital) cinema equipment manufacturer Chen Xing has issues a list of “Seven Rules for Cinema Brand Building” that heavily promotes its own technologies and solutions, while also providing an insight into the company’s thinking and strategy.

Don’t forget what we’ve written about them before: “China’s ‘Last Mile’ Plan for Digital Cinema: Ditch Western Technology.” This is as much true for smartphones and airplanes as it is for cinema equipment – China does not want to keep importing ‘Western’ technologies but build their own (then export it). Such competition and innovation should not be seen as a threat but a good thing.

The Seven Rules are: acoustical design, sound system, laser light source projection, TMS centralized management and control systems, cinema ticketing management system and service quality guarantee system.

Chen Xing talks about the alternatives it will offer up when it comes to laser (illuminated) projection, as well as immersive audio, where its Cinelab has developed 5.1, 15.1 and 17.1 audio which “get rid of the shackles of sources,” and offer “the perfect interpretation of the Dolby (ATMOS) panoramic sound studio truest sound.”

Chen Xing fires a shot across the bows of the other manufacturers by pointing out that while not being part of the original DCI elite, it is one of the largest server/media block deployers in the world today.

Digital Film for film and television industry has brought tremendous changes. Especially in distribution and exhibition side, digital cinema technology has maintained rapid growth in recent years. Of course, these are inseparable from the updated device technology. Regardless nowadays 3D, IMAX, 4K and other high-tech marketing, have become an end shadow vane hall, the market demand for high-tech also “hubbub straight on.” Christie, Barco, NEC, SONY have launched projectors with laser light source, which means Hollywood recommended type of light source laser source trend.

Among them, in the digital cinema systems, as film screenings server core products while always being SONY, GDC, Dolby, Doremi and other foreign manufacturers, “occupation”, but with the development of technology, more and more Chinese national brand manufacturers Chen Xing Technology began as “emerging” by the market influence is also rising. It is understood that the field of the world’s digital projectors DCI-compliant digital cinema server products, market share and influence were sorted by: GDC, Dolby, Doremi, Chen Xing AQ series.  LINK

Imax Tianjin

Imax screens only account for one per cent (1%) of the total Mainland screen count but an astonishing ten per cent (10%) of the box office, according to an interview with Imax’s director in China Yuan Hong. He also reiterates that China’s total box office will overtake the United States, some time between 2018 and 2020. “When will we surpass the United States? Five years ago we did not expect to ask this question, now it is just around the corner,” he observes.

Also at the box office, too, “as the movie, the theater itself is dependent on bringing new grossing film screenings, but also for the huge traffic.” Especially as the Lunar New Year stalls, summer gears up. “It also shows that, for shopping centre developers, the introduction of a cinema format still has a very good future.” At the box office, although high, it brings high turnover, but the scene, Yuan Hong also points out is “broke.” “For the cinema itself the profit margins are very limited, even if the movie is good, it is quicker to make money from popcorn, drinks, toys and other Transformers. ”  LINK

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Daily Cinema Digest – Wednesday 24 September 2014

Iosono lab

IOSONO – when 11.1 speakers just ain’t enough.

Barco is doubling down on its immersive audio efforts by hiring away IOSONO’s audio team and setting up what is now called Barco Audio Technologies [BAT?]. This could potentially mean moving away from a dependance on the Auro brand and Auro Technologies partnership, though the latter is quoted on how thrilled they too are about the new corporate sibling’s arrival.

With 500 screens committed or installed, Barco is now ready to take immersive sound to the next level. The digital cinema leader is adding the team of 3D audio expert IOSONO and its assets to the Barco family to further enhance and customize its object based immersive sound technology. In this way, it wants to help cinema exhibitors bring even more magic to the movie-going experience.  LINK

And since Barco does not have any film immediately lined up to follow “The Maze Runner” for its Escape triptych-screen it is venturing into event cinema, by announcing a concert film with Lady Gaga and Tony Bennett.

Barco will collaborate with Universal Music/Interscope Records and recording artists Tony Bennett and Lady Gaga to bring their performance at the Grand Palace in Brussels into Barco Escape theaters in early 2015.

The performance will be filmed today specifically for the Barco format, the day before Tony Bennett and Lady Gaga’s “Cheek to Cheek” album of jazz and popular standards is set to release worldwide.  LINK

Everstone

The interest in India’s multiplex business is heating up, with yet another private equity company talking to two multiplex veterans about setting up a new cinema venture called Cinemasia, that could be looking beyond just India.

Private equity fund Everstone Capital may team up with two individuals with experience in the entertainment industry to start a venture called Cinemasia, three people familiar with the development said. Everstone is in talks with Shravan Shroff, the former promoter and managing director of multiplex operator Fame India Ltd, and Pramod Arora, who recently quit PVR Ltd as group president, the people said on condition of anonymity.

And:

This would be Everstone’s maiden venture in the multiplex business, which has already attracted other private equity funds. Renuka Ramnath-promoted Multiples Alternate Asset Management Pvt Ltd and L Capital Asia, the third party private equity fund of LVMH Group, backed PVR Ltd to acquire Cinemax India Ltd in November 2012. Before selling off Fame, Shroff also raised capital from India Value Fund and Singapore’s sovereign wealth fund Temasek Holdings (Private) Ltd.  LINK

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Daily Cinema Digest – Friday 12 September 2014

As you may have noticed Patrick von Sychowski is in Amsterdam attending IBC which means you must suffer my attempt at putting together a Daily Cinema Digest.  Be sure to check out all of Patrick’s coverage of IBC after catching up on the day’s (or in this case, week’s) cinema news.

Big Cinemas

Hey, remember when North American exhibitors built way too many multiplexes during the 1980′s and 90′s over extending themselves to such a degree that during the early 2000′s the industry began to consolidate with cinema chains buying each other out or merging?  Well, it seems this is a trend that might be hard to avoid.  India has been going through a huge multiplex boom over the past decade and now it seems has entered the consolidation phase of the business cycle.  Rumors are afoot that Carnival Films is in negotiations to acquire the majority of Reliance MediaWorks theatre chain Big Cinemas.  This would be the third such merger or acquisition for India’s exhibition industry in as many months:

Inox Leisure, India’s second largest multiplex operator, acquired Delhi-based Satyam Cineplexes Ltd for nearly Rs.240 crore, paying Rs.182 crore in cash and taking over its debt in a deal that expanded Inox’s presence to 50 cities, with 91 multiplexes and 358 screens; and Housing Development and Infrastructure Ltd (HDIL) sold its multiplex business Broadway Cinemas to Carnival Cinemas for an undisclosed amount.

If the deal goes through Carnival would end up with 280 screens.  That really seems to be one of the main reasons for all the mergers and acquisitions; more screens a bigger market share of the box office and thus more leverage when negotiating with film producers and distributors over film rental.

According to the omnipresent anonymous source “familiar with the situation” Reliance isn’t looking to completely exit exhibition:

“The contour of the final transaction is yet to be arrived at, but Big Cinemas will not entirely exit the business. It will form a strategic alliance with an existing cinema exhibition chain that will run the daily operations and it will receive proportionate revenues from them as part of the partnership. Reliance MediaWorks will also invest in the venture as part of its growth strategy because it believes there is growth potential in this business.”

Don’t expect the consolidation of the Indian exhibition industry to slow down anytime soon.  Jehil Thakkar, head of the media and entertainment practice at KPMG, told LiveMint:

We certainly do see the cinema multiplex industry continuing to consolidate inorganically as the real growth opportunity lies there… Most of the big players are seeking inorganic growth options and scale is a very important part of this business.”

I just love that word “inorganic”.  Do you think since organic products usually cost more at stores that inorganic ones would cost less?  If so, maybe Carnival could get a discount on Big Cinemas since it would technically be considered “inorganic growth”.  LINK

Megabox

South Korea – The sale of exhibition circuits isn’t limited to India.  Over in South Korea an investment group is looking to cash out on their seven-year investment in Megabox.  Korea Multiplex Investment Corp.

Inside, though anonymous, sources have told various media outlets that backers Korea Multiplex Investment Corp., whose shareholders include the National Pension Service, Public Officials Benefit Association and Military Mutual Aid Association, are pushing for a sale of the company and have been reaching out to potential buyers.

Megabox is one of South Korea’s largest multiplex operators controlling 21% of the screens in the country as of last year. That figure is third to CJ CGV which operates 43% of screens and the film division of Lotte Shopping Company which controls 32%. Korea Multiplex, which owns 50% of Megabox (Jcontentree Corp. holds a 46% stake in the exhibitor), is hoping the circuit will sell for as much as 13 times its current earnings.

In 2013 Megabox netted KRW 25.6 billion (USD $24,745,216) on KRW 206.1 billion (USD $199,218,321) in revenue.  LINK

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