Tag Archives: Arts Alliance Media

Daily Cinema Digest – Friday 13 February 2014

regal-entertainment1

Regal has announced its 2014 Q4 figures, which are up, up, up in all departments, on the back of an improved film slate. Reason enough for it not to want to sell itself any longer. Dividend was also announced.

Total revenues for the fourth quarter ended January 1, 2015 were $799.1 million compared to total revenues of $739.9 million for the fourth quarter ended December 26, 2013. Net income attributable to controlling interest was $46.3 million in the fourth quarter of 2014 compared to $24.0 million in the fourth quarter of 2013. Diluted earnings per share was $0.30 for the fourth quarter of 2014 compared to $0.15 during the fourth quarter of 2013. Adjusted diluted earnings per share (1) was $0.30 for the fourth quarter of 2014 compared to $0.17 during the fourth quarter of 2013. Adjusted EBITDA (3) was $163.5 million for the fourth quarter of 2014 compared to $125.8 million for the fourth quarter of 2013. Results for the fourth fiscal quarter of 2014 and for fiscal 2014 were significantly and positively impacted by the timing of our fiscal calendar which consisted of a 14 week period in the fourth quarter of 2014 compared to a 13 week period in the fourth quarter of 2013 and a 53 week period in 2014 compared to a 52 week period in 2013. The additional week was the week between Christmas and New Year’s Day, a traditionally high attendance week for the company and the industry. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release. LINK

Lotte Popcorn

South Korea – Popcorn profeteering and misleading film start times (actually advertising block) has become a civic cause in South Korea.

South Korean civic groups and the Democratic Youth Federation and the promotion of the Law Society was held in front of the 9pm news conference, said Lotte Cinema, South Korea Studios CGV, Lotte Cinema and theater in general MEGABOX the existence of “popcorn profiteering” and “mandatory advertising,” and a series of injustice, against the interests of consumers. According to the Korea Association of consumer groups last year statistics, the results of the three big companies sell snacks original show that vat of popcorn sells for 5000 yuan (about 29 yuan), but the raw material price is only 613 yuan, the price of the raw material actually 8.2 times the price. One consumer said, can not help but read more than 20 minutes of advertising, movie tickets in actually also includes the cost of 3D glasses, himself unknowingly become “taken for a ride.”  LINK

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UK Film Council’s Digital Screen Network – Looking Back 10 Years On

Steve Perrin

This month marks the 10th anniversary of the UK Film Council awarding the contract for the setting up and running of the Digital Screen Network (DSN) to Arts Alliance Media (AAM), following a competitive tender process. The DSN was arguably the first large-scale digital cinema roll-out that aspired to conform to the specifications that were still in being formulated by DCI in Hollywood. [Full disclosure: I assisted in the evaluation process as a consultant.] Spearheaded by Steve Perrin and Pete Buckingham the DSN sought to promote the distribution of a wider range of films in a wider range of cinemas for UK audiences everywhere. The DSN arguably paved the way for the subsequent mass digitisation of UK cinema industry and started exhibitors on the learning curve that was necessary to fully comprehend what was at stake. For Steve’s achievements after a lifetime in the industry he was awarded an MBE for services to the UK cinema industry in this year’s New Year’s Honours List. Here he looks back on the experience of shepherding this critical project and its subsequent legacy. – PvS

You two must be mad. It’ll never work. What a waste of public money.

                                                                       - Unnamed UK industry academic.

What a great idea. We applaud you.

                                                                     - Unnamed Hollywood studio executive.

Embarking upon a scheme to digitise over 200 screens in the UK in the mid 2000’s was a daunting task. DCI was still working on their technical recommendations, and exhibitors were still yet to grasp the fact that digital cinema was their inevitable future. In short, it was an uphill struggle. What kept Pete and I motivated was twofold.

First, it was the best scheme that we could imagine to fulfil the brief that we had been given by the UKFC Board; a wider range of films in a wider range of cinemas. Second, whereas our aims did not revolve around the promotion of digital cinema ‘per se’, we knew that it was coming and that the DSN presented a unique opportunity for the industry to begin take on board the ramifications that such a change would bring about.

Thus, we set of a journey that might not just be valuable for the industry, but to ourselves in terms of learning and fully appreciating the complex factors involved.

Needless to say, there were a number of ‘naysayers’ that said that it could not be done; that the industry did not need and would never convert to digital and that had set ourselves out on a fool’s errand. In addition, it was claimed by other detractors that all we were doing was to subsidise the studios and big cinema chains and that they should be doing it themselves. No real surprises there; the key point that we were doing this for audiences was totally missed by such commentators. Fortunately, such comments were in the minority, and basically confined to those who made their living from the public purse. Still arrows in the back are always expected by those that start something new and innovative…

More surprising though was the support and enthusiasm that we received from the major US studios when we explained our plans to them. Whereas the DSN strategy was not directly aimed at them, they appreciated what we were planning and offered every support and advice that we might need. Contrary to some in the UK that thought that we were wasting our time, the studios understood immediately what we were attempting to achieve and supported it whole-heartedly. Read More »

Wanda Cinemas Announces 2014 Figures & AAM Tech Deal

Wanda logo

Wanda Cinemas has published its first post-IPO figures for they whole of 2014 and they show overall growth in the number of screens and box office, though the exhibitor’s market share has slipped somewhat.

Win Business Network reports that:

Wanda Cinema’s 2014 box office revenue was 4.21 billion yuan [USD $674 million], an increase of 33.1%, with audiences 102 million patrons, an increase of 30.8%; Up to December 31, 2014, the company has already opened in 182 theaters, with 1,616 screens.

The corresponding data in January 2015 Wanda Cinema is realized grossed 380 million yuan [USD $60.8 million], an increase of 44.1%, with audiences 8,990,000 patrons, an increase of 36.6%, has been opened in 183 theaters, 1,624 screens.

However, Wanda Cinemas’ overall marketshare slipped slightly, after having grown for the previous three years.

In January this year, the State Press and Publication Administration of Radio Film Board has already grossed Chinese film last year had informed: 29.639 billion yuan [USD $4.75 million], an increase of 36.15%. This makes it possible to calculate the Wanda Cinema last year accounted for about 14.2 percent of the market.

Wanda Cinema’s market share data with the previous two years or less. According to the prospectus of the data Wanda Cinema, 2011 to 2013, Wanda Cinema’s market share was 13.61%, 14.49% and 14.52%, both the market first.

It is difficult to compare the figures and total takings with previous years accurately due to tax reforms in the past year that have impacted cinemas’ revenue. This is due to the total box-office deduction of 5% which goes to the “special movie fund”, and then there is a further 3.3% of the tax deduction, and only then do we get the net box office.

Wanda Cinemas continues to benefit financially – and enjoy an advantage over competitors – because of the close ties between Wanda Cinema and Wanda Plaza real-estate. This means that Wanda Cinemas are shielded from rising rents costs that affect other theatres.

However, this sort of arrangement only continue for as long as the real-estate market is strong and Wanda Plaza can afford to play corporate sugar daddy to Wanda Cinemas.

Now that both companies are listed companies there could be questions about this type of arrangement if the fortunes of the two companies start diverting. Though with the majority shares of both companies firmly controlled the Wang family, there is not much other shareholders can do to alter this cosy arrangement.

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Daily Cinema Digest – Monday 15 December 2014

Wanda Cinema Line Logo

AAM Arts Alliance

Perhaps the biggest news announced at CineAsia was Arts Alliance Media partnership with Wanda Cinemas. It would be good, however, to have a bit more specifics on what exactly the deal entails for both parties.

The partnership will see AAM serving as a primary technology partner to Wanda with the aim of creating efficiencies, increasing revenues and improving customer experience across all of Wanda’s cinema operations. The partnership covers both existing business and future developments.

John Aalbers, Chief Executive Officer of Arts Alliance Media commented “I am delighted to announce this wide-ranging, strategic partnership with Wanda Cinema Line. The initial deal represents one of the most significant in cinema software history. What is even more exciting is that Wanda is a global player with big ambitions and we, at Arts Alliance Media, are going to be right there with them making it happen. Being able to work with such a visionary and strategic partner is very exciting, as it will help keep both companies at the forefront of innovation in the rapidly changing cinema industry for years to come.”  LINK

Orange Wednesdays

UK telecoms operator EE is ending its cinema sponsorship deal after more than a decade, though a new sponsor partner is likely to replace it.

Mobile company EE is to end long-running 2 for 1 cinema deal Orange Wednesdays in February 2015 after the company and cinemas could not agree a commerical deal.

An EE spokesperson said take up of the once “massively successful” offer had declined in recent years due to changing viewing habits:

“Orange Wednesday launched over a decade ago and at its peak was a massive success,” read the statement. “After 10 great years our brand has changed and our customers’ viewing habits have also evolved so it’s time to move on.  LINK

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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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Daily Cinema Digest – Friday 29 August 2014

image

The poor US box office is the story of the summer. Weak slate or cyclical? Variety crunches the numbers, compares winners & losers and weighs the opinions. The good news is that “summer” matters much less than it used to and true to John Fithian’s wish, studios are now looking at a 12 month window of opportunity.

Despite an August thaw that saw “Guardians of the Galaxy” and “Teenage Mutant Ninja Turtles” shatter expectations, the summer box office will likely finish at its lowest point in eight years. Ticket sales are running 15% below last summer’s.

Thanks to the magic of CGI, cities crumbled on a weekly basis, defended by a rotating band of masked superheroes. But are these scorched movie metropolises a metaphor for a business being bombarded by newer, snazzier forms of non-theatrical entertainment, or is this a momentary stumble for an industry that’s still soaring?  LINK

Seeking Alpha has its take on the summer and it leans towards the ‘secular decline’ camp.

Box office debate: Secular decline or smashing 2015 on tap? • 8:59 AM

Clark Schultz, SA News Editor

- Cowen Research analyst Doug Creutz thinks the soft summer box office season this year is evidence of a secular decline in domestic attendance as viewing habits evolve.
- The analysis runs counter to the line of thought of some media analysts who think a weak and uninspiring summer slate is the culprit.
- Creutz points out that the number of summer releases is in-line with historical averages, while box office bulls note tent-poles are spread out throughout the year more than in the past making the summer compare tougher.
- On tap in 2015: Blockbuster releases next year include Star Wars: Episode VII (Lucasfilm), Avengers: Age of Ultron (Marvel), Fifty Shades of Grey (Universal), The Hunger Games: Mockingjay Part 2 (Lionsgate), The Good Dinosaur (Walt Disney Pictures), Bond 24 (Columbia).

image

On a brighter note, Italy was up in the first quarter this year compared to same period 2013. (No idea why they are flagging Q1 but not Q2.)

Italy was the only big EU market to grow in box office gross and admissions in 2013. Policy differences between Italy and Spain, discussed in the Q1 2014 Distribution Report, account for most of the box office and production growth.

- 30.3M Italians attended the cinema in Q1 2014, compared to 26.8M in Q1 2013.  LINK

Yet The Telegraph reports that there are fears that the Italian film industry is ‘going into a steep decline’ as only three of the 31 titles in competition at this week’s Venice Film Festival are Italian.

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Daily Cinema Digest – Monday 7 July 2014

Lotte Super Plex G Is The World's Largest Cinema Screen

What is the largest cinema screen in the world? According to Guinness World Records it is now in the tallest building in South Korea. So that’s officially official.

The screen of the multiplex cinema which will open at the Lotte Cinema World Tower, boasts its unparalleled size in the industry: With 622 seats — the largest available number of seats for a screen, the Super Plex G is an ultra large theater which looks like a two-storey opera theater in appearance. In its 34 meters wide and 13.8 meter long screen, 34 adults can lie on it together.

On July 3, a special ceremony was held to commemorate the recognition of the largest screen “Super Plex G” at Lotte Cinema World Tower by the Guinness World Records that confirmed the huge screen has been qualified as the world’s officially biggest screen. LINK

USA: THR asks what is behind the underperforming summer box office in North America, which is down nearly 20% up to the 4th of July holiday. Underperforming titles seem the culprit and no blame apportioned to World Cup (unlike Europe and Latin America).

What’s behind the summer drought? Hollywood studio executives and box office observers blame a lack of mega-grossing tentpoles, a dearth of doubles and triples and no huge animated family film. In other words, a number of films have underwhelmed (or bombed), including Fourth of July R-rated comedy Tammy, which posted a five-day debut of $32.9 million, Melissa McCarthy’s lowest recent opening (as a way of comparison, fellow R-rated comedy Neighbors launched to nearly $50 million in May).

Revenue for Fourth of July weekend hit only $130 million, down 44 percent from last year’s $229.8 million haul. Granted, the holiday fell on a Friday this year, a disadvantage, but revenue managed to reach $160.2 million in 2008, the last time the Fourth was a Friday. One reason for the dramatic downturn is that no big tentpole rolled out, probably because no one wanted to open in the wake of Transformers: Age of Extinction, which debuted June 27. LINK

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Daily Cinema Digest – Wed/Thur 18-19 June 2014

With Patrick von Sychowski still in Barcelona attending CineEurope, I have been tasked with curating the daily digest posts in his absence. Celluloid Junkie readers (i.e. you) have been telling us lately how much you like the daily digest and I’ll do my best to keep it up as best I can.

Needless to say, the past few days have been filled with news coming out of CineEurope. Not only do we have Patrick’s live blog of the conferences panel sessions, but there is no shortage of press releases being published by industry vendors. Here’s a summary of some of the releases which contained new, updated or relevant information:

Technology

JT Bioscopen Hilversum

Artists rendering of JT Bioscopen cinema being built in Hilversum Media Park

Barco: As is their custom during trade shows, the projector manufacturer has had their public relations department working over time during CineEurope. On Tuesday came news that JT Bioscopen will install a Barco laser projector at one of its multiplexes. More precisely, d-cinema integrator dcinex will install the Barco 6 primary Laser3D (6P) laser-illuminated projector at JT Bioscopen’s new seven-screen complex at Hilversum Media Park.

JT Bioscopen is the second largest cinema chain in the Netherlands (behind Pathé) with 21 multiplexes in 19 different cities. The circuit converted entirely to digital in 2011.

Here’s a nice little factoid front the release:

Known as ‘Holland’s Hollywood’, the Hilversum Media Park houses all major Dutch TV and radio stations, production houses, studios and other companies in the audiovisual and entertainment business.

You learn something new everyday. Granted, Barco was probably hoping that their announcement would help educate people about their 60,000-lumen laser projector which, thanks to the company’s Alchemy technology, can show 4K content at 60 frames per second or in 3D, all while minimizing speckle and thus the need for a mechanical vibrating-screen. But that bit about Holland’s Hollywood seemed like a good piece of trivia worth passing along. LINK

Now, while we’re on the subject of Barco, the company also announced that the relatively new Barco Alchemy Integrated Cinema Media Processor (say that ten times fast) is now fully integrated with Arts Alliance Media’s Screenwriter Theater Management System (TMS). Actually, Screenwriter is the first TMS to be support Barco’s new ICMP (which is how all the cool kids refer to the Integrated Cinema Media Processor). The good news is that any AAM customer already using Screenwriter will also get an upgrade featuring the Alchemy integration, not just customers that deploy the software in the future.

Naturally, Screenwriter already supports a multitude of cinema equipment from various industry vendors. It is, after all, a TMS. This is just the latest integration AAM has completed. Rich Phillips, CTO of AAM, explained this much better in the release, stating:

“We support all the key servers and media blocks, enabling exhibitors to use equipment from different vendors in the same facility seamlessly. We are delighted to be able to now offer the same support for the innovative Barco Alchemy product, giving exhibitors the freedom to make technology decisions that are not limited by compatibility with their existing systems.”

Yeah, Mr. Phillips did a much better job of what I was trying to explain.

Speaking of which, since it’s fairly new we should probably tell you that the Barco ICMP is what is known as an integrated cinema processor, or if you want to sound hip, an ICP. The DCI-approved module goes a step beyond decoding encrypted content as a media block and adds the functionally of a media server onto a single board. This is meant to reduce the amount of digital cinema equipment in the booth. Barco is putting the Alchemy ICMP into all of its new d-cinema projectors, though any of the company’s Series 2 projectors can support the technology. Hard to believe all that fits into the device shown below. LINK

Barco Alchemy ICMP

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Howard Kiedaisch Departs Arts Alliance On His Own Terms

Howard Kiedaisch

Howard Kiedaisch

Late last night (or early this morning) before finally closing my laptop and logging off, I sent Howard Kiedaisch a hasty email to see if he wanted to have a quick conversation to catch up before CineEurope. When I had spoken with the CEO of Arts Alliance Media at the end of May he had told me the company would be making a few announcements on the run up to the conference. Though he provided a heads up about AAM’s plans for alternative content (more on that in a moment), Kiedaisch confessed he wasn’t ready to talk about one or two developments that were in the midst of being finalized.

Due to the time difference between London, where Kiedaisch and AAM are based, and Los Angeles, and knowing his replies to email are often swift, the first thing I did this morning was grab my phone check if he had gotten back to me. Indeed, there most certainly was an email from Kiedaisch, the contents of which shook off any remnants of sleep and jolted me awake. To be sure I wasn’t still dreaming however, I reread the press release Kiedaisch had pasted into his email. The one announcing after nine years as CEO of AAM, he would be stepping down from his position on July 7th of this year and will be succeeded by John Aalbers, the former CEO of Volubill, a telecom industry software developer.

Oh, and yes, the release also went on to detail the merger of AAM’s event cinema distribution division with Mr. Wolf, a content production and finance company that, like AAM, was founded by Thomas Høegh. The combined outfit will operate as Arts Alliance Limited and focus its commercial efforts on financing, producing, distributing and marketing event cinema (a.k.a. alternative content).

The integrated company makes perfect sense and combines the production and marketing expertise of Mr. Wolf with the distribution and cinema background offered by AAM’s event cinema division. There are natural synergies between the two companies which offered slightly overlapping services. Additional news and information about the new venture is likely to come out of CineEurope next week.

In hindsight, Kiedaisch stepping down is also completely logical. That’s why he thought of it five months ago and spent the intervening time orchestrating his departure in a way that would set AAM up for success. He explained to AAM’s board at the end of last that the company would have to decide which of its five businesses it truly wanted to support; digital cinema financing and management, network operations, software services, content services and/or alternative content. Kiedaisch rightly felt that the marketplace for some of these businesses was becoming overcrowded and by working in so many areas AAM may giving each short shrift.

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Why Arts Alliance Media Sold Its Content Services Business

Arts Alliance Media Content Services

Last week the digital cinema market continued its predicted consolidation when Arts Alliance Media (AAM), the London based cinema integrator and software developer, sold off its content services business to Motion Picture Solutions (MPS). Founded by managing director Ian Thomas and also based in London, MPS has been building a reputation over the last eight years as one of the leading providers of content services in Europe, competing directly with AAM.

At first glance this looks to be a situation where one company surrenders to a much stronger competitor in the same space, though as the Chief Executive Officer of AAM, Howard Kiedaisch, points out (see below) it’s actually a bit more nuanced and strategic than that.

The news shouldn’t exactly come as a surprise to professionals working in the motion picture exhibition or distribution industries. Over the past few years AAM has been making its name by financing digital cinema rollouts through virtual print fees, developing digital cinema software and distributing alternative content. While AAM also offered content services such as DCP mastering, KDM generation and content distribution, MPS actually focused on such solutions more heavily and has thus become widely known as a reliable provider of digital mastering and distribution services.

You might be asking why AAM would want to exit a business that was, if not an overwhelming profit generator, at least earned revenue. The answer is quite simple; content services and delivery is a very tough and competitive business. Just ask Cinedigm. Oh that’s right, you can’t since the company which was once a market pioneer in the satellite delivery of content to cinemas sold that side of its business to Technicolor back in 2011. No worries, you can always as Arqiva, Deluxe, DSAT, Microspace or Technicolor just how difficult content services can be.

And that’s just it; these days it seems anyone with encoding software and a Mac Pro hangs up a shingle as a content services provider, the market has become over saturated with such entities. Not all of these dozens upon dozens of companies are created equal either. The renown writer and professor Tim Wu refers to this sequence of innovation and openness, fragmentation and gradual commoditization as “The Cycle” in his 2010 book “The Master Switch: The Rise and Fall of Information Empires“. Adding to this is that most large content owners (read: Hollywood studios or major distributors) sign long-term contracts with specific providers to obtain larger discounts. If you miss landing a contract with one such content owner, it could be five years before you’ll have the opportunity to put in another bid.

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