Tag Archives: NATO

Fithian Keynote Kicks Off ICTA Tech Conference

January 20, 2010

John Fithian of NATO

Not even a record setting rain storm could keep cinema professionals away from the Universal Hilton in Universal City yesterday where the International Cinema Technology Association was holding it’s annual tech conference. After a Monday evening cocktail reception, the program began in earnest with a keynote address from John Fithian, President of the National Association of Theatre Owners.

In a speech billed as a “State of the Industry” in the conference schedule, Fithian covered a wide range of hot button topics not all of which were geared strictly to many of the motion picture engineers in the room. He began by recapping the box office records that were shattered in 2009, a year which saw North American combined grosses surpass the USD $10 billion mark. Fithian was quick to point out that such earnings were not due to just the rise in ticket prices, but rather an increase in the number of patrons visiting cinemas nationwide. In fact, decade-over-decade, the average number of moviegoers rose from 995 million in the 1970’s to 1.13 billion in 1980’s upwards to 1.28 billion in the 1990’s settling at 1.44 billion for the decade which just ended.

A good portion of Fithian’s talk was focused on many of the reasons 2009 was such a spectacular year for the cinema business and how the industry might continue to grow even more. He detailed three key drivers he believed were responsible, not the least of which was the major studios getting better at understanding there are 12 months in the calender. Fithian stated:

For years we put out everything in the summer, we put out everything in the holidays and you couldn’t find an person in the cinema in February or September. That is no longer the case…. we’re getting good pictures that appeal to different demographics with different genres spread throughout the 12 months and that’s fantastic. That’s what we have to have.

Affordability of movies as a form of entertainment was the second reason Fithian gave for 2009’s growth. Despite the increase in ticket prices over the years, and even with the premium for 3D films, the price of a movie ticket has not outpaced inflation. In 1969 the price of a movie ticket in the U.S. was USD $1.42. In 2009 that price had risen to a nationwide average of roughly USD $7.56. If ticket prices had kept up with the rate of inflation, then starting with USD $1.42 in 1969, we should presently have an average ticket price of USD $8.37.

Popularity: 5% [?]

Posted in Events

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The MPAA’s Motive In Upsetting Exhibitors Over Release Windows

By J. Sperling Reich

November 9, 2009

Last Thursday when the Motion Picture Association of America made public an ex parte communication they sent to the FCC in defense of a waiver request it caused a flurry of headlines about studios going to war with exhibitors over release windows. To be sure, the letter sent by the MPAA’s lawyers, as well as the press release they sent out the same day directly refer to release windows. The headline of the press release boldly reads “MPAA Seeks FCC Okay For Transmission of First Run Movies Directly To Consumers”. However the MPAA may simply be hiding behind the concept of protecting content during shortened release windows as camouflage for their true motive; securing high definition digital content as it is distributed into the electronic ether of the home by controlling which devices can playback and display the content.

The MPAA’s letter was sent as a rebuttal to a communication sent to the FCC in October by Public Knowledge arguing the waiver not be granted. PK (as they are often referred to) is based in Washington D.C. and considers and is a public interest group that focuses its efforts on digital technology. The second paragraph of the MPAA’s letter and third paragraph of the press release reads in part:

As MPAA has detailed throughout this proceeding, grant of the waiver would for the first time allow millions of consumers to view high-value, high-definition theatrical films during an early release window that is not available today. MPAA has explained that release of this high-value content as part of an earlier window, especially with respect to movies released for home viewing close to or even during their initial theatrical run, necessarily requires the highest level of protection possible through use of SOC.

Ignoring the reference to SOC for the time being (I’ll get to it in a bit), one can see how the phrase “close to or even during their initial theatrical run” might make motion picture exhibitors angry enough to storm MPAA headquarters. It didn’t help that outgoing MPAA Chairman and CEO Dan Glickman is quoted in the press release saying:

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Popularity: 10% [?]

Posted in Organizations

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Setting The Record Straight On ShowEast

By J. Sperling Reich

November 6, 2009

Let’s face it, while mainstream media might be screaming about an economic recovery, times are still tough for many businesses all over the world. That is especially true for trade shows. No matter the industry focus, attendance at global conventions has dropped in 2009 by more than 25% in most cases. Just look at attendance at some of the annual confabs the motion picture industry holds; the Sundance Film Festival down 11%, ShoWest down 15%, NAB down 20%, the Cannes Film Festival down 30% and IBC in Amsterdam down at least 7%. That may be why at ShowEast, which was held in Orlando, Florida from October 26th to October 29th, the talk amongst delegates was as much about the trade show’s attendance as it was about 3-D, digital cinema and the upcoming blockbuster release “Avatar”.

While such conversation tends to feed on itself ultimately making mountains out of mole hills, Robert Sunshine, the Vice President of Nielsen Film Group which organizes the event, readily admits attendance at this year’s ShowEast, like most conventions around the world, was down roughly 20%. “It’s numbers that we don’t like to see,” said Sunshine. “We attribute it to the economy and we also attribute it to the fact that there are lots of [industry] conventions, there’s the major convention, ShoWest, and certain people don’t have the money to attend all of these shows so they are picking and choosing where they go.”

Another factor Sunshine might not be considering is that digital cinema is maturing, growing out of its infancy and into adolescence. The technology is responsible for one of the greatest, if not most disruptive, transitions the motion picture exhibition industry has ever seen. By now, there has been some shakeout in the number of companies who entered the digital cinema space, and those that remain are naturally looking to augment their marketing plans. This is a common trend in emerging markets and industries, though unfortunately this phenomena is taking place in digital cinema during a record setting recession.

Popularity: 10% [?]

Posted in Trade Shows

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NATO Nabs Mitch Neuhauser For Trade Show

By J. Sperling Reich

August 25, 2009

Ever since March of 2008 when the National Association of Theatre Owners (NATO) announced that they would be holding their own trade show in 2011 just before NAB the question has been, who will the organization get to put the event together. Speculation was that Bob and Andrew Sunshine who have been producing NATO’s official trade show, ShoWest, since 2001. After all, the Sunshine’s, who originally started out as the Sunshine Group Worldwide before being sold to Nielsen, have tons of experience organizing annual exhibitor conferences such as ShowEast, Cinema Expo and CineAsia.

Such a guess would not have been far off given that earlier today NATO announced they had hired Mitch Neuhauser to be the Show Manager of their official trade show, the first of which will be held in March of 2011. Presently, Neuhauser works with the Sunshines as Vice President of Nielsen Film Group. He is also already involved with NATO in some capacity as the assistant executive director of NATO of New York.

If you’ve ever been to any of the four trade shows Nielsen holds for exhibitors and distributors each year than you definitely know who Neuhauser is. Read More »

Popularity: 13% [?]

Posted in Organizations, People

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NATO Reviews D-Cinema Requirements With Vendors

By J. Sperling Reich

January 29, 2009

After the positive response the National Association of Theatre Owners received from their meeting last June with manufacturers and service providers to review their Digital Cinema System Requirements, they decided to hold another meeting last Friday in Burbank, CA to go over version 2.1. Brigitte Buehlmann , NATO’s Industry Issues Liaison, organized the meeting which was moderated by Michael Karagosian, a NATO consultant who oversaw the drafting of the latest requirements document. [Full Disclosure: I attended this meeting on behalf of my employer, DTS Digital Cinema.]

Version 2.1 of the Digital Cinema System Requirements was published in December of 2008, just ten months after version 2.0 was published and two years after version 1.0. This is a much speedier turnaround then the nearly three years it took the studios to update their phonebook size DCI Specification from version 1.0 to version 1.2, the latter of which was released in March of 2008. No doubt, the dialogue NATO and its members began with manufacturers and service providers back in June expedited their ability to put a little meat on the bones of the first version of their requirements.

Indeed, version 2.1 of NATO’s Digital Cinema Systems Requirements is 21 pages in length, up from 14 in the previous draft. And while there are definitely remnants of version 1.0 in the document, it’s remarkable how different this latest draft is in certain areas from the one that preceded it. Read More »

Popularity: 16% [?]

Posted in Digital Cinema

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Paramount Goes Direct-To-Exhibitors With D-Cinema Deal

By J. Sperling Reich

January 22, 2009

On the eve of the National Association of Theatre Owners’ meeting with equipment vendors to review digital cinema requirements on Friday, Paramount Pictures has thrown the exhibition industry a curve ball in the hopes of resuscitating the stalled rollout of the technology. Rather than work solely through integrators such as Digital Cinema Implementation Partners (DCIP) and Cinedigm (formerly AccessIT), Paramount has become the first Hollywood studio to offer North American exhibitors financial assistance for digital cinema installations.

What’s significant about Paramount’s announcement is that previously studios have refused to cut deals to reimburse exhibitors for digital cinema installations directly with exhibitors for fear of future anti-trust litigation. Instead, they relied on digital cinema systems integrators to provide a buffer between themselves and theatre owners. But, with the digital cinema rollout at a near stand still, Paramount seems to be throwing caution to the winds.

Paramount has a vested interest in seeing digital cinema take off, specifically to increase the number of 3-D capable projection systems. This March the studio will be releasing Dreamworks Animations’ “Monsters vs. Aliens” in 3-D and presently the United States and Canada only have about 1,200 screens properly equipped with 3-D systems. Paramount has been promoting the film heavily for nearly a year at industry trade shows and will be airing a 3-D commercial for the movie during the upcoming Super Bowl telecast.
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Popularity: 58% [?]

Posted in Digital Cinema, Distributors

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Cinemas: “Recession? Bring it on!”

By Patrick von Sychowski

July 16, 2008

Recession is now a fact, but cinemas appear fairly nonplussed. Is this wishful thinking or actually born out by past experience? The UK’s The Guardian seems to think the latter, pointing out that box office takings rose in five out of the last seven recessions in the US:

“Hollywood gets bump from slump” was the trade bible Variety’s front-page headline, and industry analysts believe the relatively low cost of going to the cinema and the prospect of offering an escape from financial concerns for two hours will give cinema chains some resilience.

In Britain, box office revenues and cinema attendances continued to rise throughout the late 1980s and early 90s as the multiplex revolution swept through the country and going to see a movie again became a viable, low-cost leisure option for millions.

“Box office revenues definitely came up in the early 90s. As far as I can see there’s very little evidence to show cinema attendance suffers in a recession. If anything, it does quite well,” said David Hancock, head of film and cinema at Screen Digest.

This sentiment was echoed by the heads of both NATO and Regal cinemas in a recent interview in THR.com:

THR: Exhibition tends to be recession-resistant, but wouldn’t a spreading recession hurt concession sales?

Campbell: This is the most affordable out-of-home entertainment option that consumers have available, but at some point, do people stop buying concessions? I don’t think so. At some point, people may be a little more selective in some of their purchases, but at this point in time we haven’t seen that.

THR: Do hard times hurt smaller chains and mom-and-pop exhibitors more?

Fithian: I don’t believe there is a different impact on smaller chains in hard economic times. In fact, it is often the consumers in smaller markets who are most challenged during recessions. So they don’t take the vacation. Higher gas prices mean they don’t go for long drives to theme parks or other places. They stay closer to home, and when people stay closer to home, they tend to go to the cinema more often.

The optimism seems to be backed up by numbers from screen advertising in the US, again from THR.com:

CAC president and chairman Stu Ballatt predicted that the industry’s double-digit percentage growth path would continue “for the next few years at least.”

He said a sluggish U.S. economy does not seem to slow marketers’ willingness to put money into cinema promotions. For example, Ballatt cited increased activity across many sectors, with cinema ad spending by packaged goods and retail companies showing particularly strong growth during the past six to 12 months.

Cinemas and Hollywood are ‘fortunate’ in the sense that the past couple of years stagnation and even slump (once you look at actual attendance, as opposed to BO growth) could be blamed on poor films, whereas this summer’s crop has performed better - and this is before the fantastic Dark Knight opens (we’ve seen it and we know it is going to make Iron Man look like Tin Man when it comes to both critical and audience acclaim).

But there are those that doubt that cinemas will escape the brunt of the recession unscathed. Foremost amongst them The Guardian’s resident Hollywood contrarian Jon Patterson:

As for the benighted ticket-buyers, I wonder this time if they’ll display the same bovine sense of product loyalty the moguls depend on when times are tight. During the Depression, a movie ticket bought you a cartoon, a newsreel, a B feature and a marquee-topper - something like four hours of entertainment for a nickel (the price of a gallon of gas or a pack of smokes back then). A bargain if you needed to escape your troubles or just eat up dead unemployment time - and the movies were good enough that around 5bn tickets were sold between 1934 and Pearl Harbor. It was hard to feel Greatly Depressed when Astaire and Rogers, Gary Cooper, the Marx Brothers or Eddie Cantor were living it up on screen.

But things are different now, and films aren’t nearly the draw they were then. In 1938, the movies competed only with such distractions as booze, sex, God, the radio or political agitation; there was no streaming online video, no computer games, no 60in plasma TVs, no home-movie market whatsoever. If the economy collapsed tomorrow, would seeing Transformers 2 alleviate your misery or simply compound it? Dear viewer, you have options!

In the insurgent spirit of that turbulent decade, let’s call for a Netflix Revolution: we just stay home and watch as many movies as we like for 13 bucks a month. Those moguls could use a little sojourn in Hooverville - it might improve their movies, too.

Cineflix or Netflix - the choice is yours. Let’s see where the tally stands at the end of the summer.

Popularity: 57% [?]

Posted in Analysis

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NATO and Warner Bros. Duke It Out

By J. Sperling Reich

July 15, 2008

Even before the ink was dry on last Thursday’s Los Angeles Times article about the struggle Hollywood studios face in finding enough digitally equipped screens to distribute 3-D movies, The Hollywood Reporter published a story that had key industry executives debating who is to blame for the slow rollout of digital cinema. Representing distributors was Dan Fellman, Warner Bros.’ president of domestic distribution, while exhibitors were repped by John Fithian, the president of the National Association of Theatre Owner. The article has the two exchanging verbal barbs, each blaming the other side for the lack of digital cinema installations.

The Reporter makes it seem as if Fithian was responding to statements Fellman made at a public forum, however they don’t say whether Fellman’s quotes come from any specific event or speech or simply an interview they conducted. It was the pending release of Warner Bros.’ 3-D flick “Journey to the Center of the Earth” that brought the issue to a head, which is why the distribution exec opened with:

“3-D is the future, so why is exhibition dragging its feet? I’m pleased ‘Journey’ will be the biggest digital 3-D release to date. But it is disconcerting that since November, the 3-D screen count has only gone up. . .”

Fellman’s quote is abruptly cut off by The Reporter - presumably a typo. Fithian was quick to answer however, in saying:

“It is particularly ironic and frustrating that a senior executive from Warner Bros. would accuse exhibition of ‘dragging its feet’ on 3-D when Warners has been the absolutely slowest of all major studios to come to the table with support for the d-cinema rollout. If Warners believes there are an insufficient number of 3-D screens in the marketplace today, they have no one to blame but themselves and they know it.”

What Fithian is referring to is Warner Bros. reluctance to enter into virtual print fee (VPF) agreements that provide an exhibitor a subsidy for the installation of digital cinema equipment. In essence, the studio will pay a fee for every screen one of their movies play on and that fee will go toward the purchase of D-cinema equipment. System integrators such as Digital Cinema Integration Partners and Access Integrated Technologies have been trying for some time to negotiate a VPF deal with studios and Warner has proven one of the few holdouts. The studio has only signed one agreement with XDC for rollouts in Europe. Because that deal pegs the VPF at USD $850, many in the industry have argued that Warners was simply trying to remove doubt they were serious about digital cinema by signing the cheapest contract they could find.

Whatever Warner Bros. reasoning for shying away from VPF deals, Fellman believes the studio has firmly supported D-cinema:

“Warner Bros. has released more films digitally than any other studio, without question. Our discussion is with exhibition, circuit by circuit, and John has never attended one business session at which any Warner exec was present. . . We are continuing to serve every digital theater that request a (digital) print. We stand by our record.”

Despite Warners’ track record, Fithian definitely faults the major studios with holding hope the world-wide digital cinema roll out:

“Exhibition stands ready to provide our patrons in the U.S. and around the world with wider access to exciting 3-D technologies as soon as all of our partners in distribution come to agreement on the level of support they will provide for the underlying digital cinema infrastructure. You cannot have 3-D without D-cinema. And we cannot have digital cinema by ‘negotiating’ through the media.”

Negotiating?! Seems more like they are arguing to me. Though that could well pass for negotiating in Hollywood.

Popularity: 20% [?]

Posted in Digital Cinema

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Stop Whining And Be Grateful For Those Cheap Cinema Tickets

By Patrick von Sychowski

April 28, 2008

Borat movie ticket The LA Time’s cinema columnist ‘Projector’ has a humorous op-ed piece echoing the NATO/MPAA song that going to the cinema is still the cheapest form of entertainment. Not just compared to going to a sporting event or visiting the opera, but even compared to trips to the picture palace of yesteryear. But he doesn’t fall for the popcorn merchants propaganda hook-line and sinker:

Of course, Projector is too savvy to entirely buy the exhibitors’ assertion that movies “remain the most affordable form of out-of-home entertainment.” They never considered a brisk 5K jog around the Rose Bowl, nor open-mike poetry night at many coffeehouses.

And movie popcorn and other snacks are notoriously pricey, which explains why theaters generate roughly 20% of their revenue but 40% of their profit at the concession stand.

Ironically, the high cost of goodies helps moviegoers, according to new research from Stanford University and UC Santa Cruz, because concession revenue enables theaters to keep ticket prices in check. Projector, who only went to a state school, can’t argue with that logic.

There is even some advice for the savvier cinema goer:

Frequent filmgoers can save several hundreds of dollars a year by selecting theaters and showtimes carefully. Sure, the Rolling Stones’ concert movie “Shine a Light” is worth $15 a ticket on a large Imax screen at the AMC CityWalk Stadium 19, but if cash is tight, consider a $5 matinee of whatever is playing at the pleasant-enough, single-screen Vista Theatre in Los Feliz. Some chains also offer bulk ticket discounts, but beware of any restrictions.

If your movie is showing at the mall, you can live dangerously by smuggling in a Mrs. Fields cookie or a packet of sour gummy worms, thereby supporting a broader swath of the economy. Projector, of course, can’t condone such a potentially flagrant violation of theater policy. He’s just sayin’.

Those interested in the Stanford University and UC Santa Cruz concession revenue report can find out more here. From the press release:

The findings empirically answer the age-old question of whether it’s better to charge more for a primary product (in this case, the movie ticket) or a secondary product (the popcorn). Putting the premium on the “frill” items, it turns out, indeed opens up the possibility for price-sensitive people to see films. That means more customers coming to theaters in general, and a nice profit from those who are willing to fork it over for the Gummy Bears.

Indeed, movie exhibition houses rely on concession sales to keep their businesses viable. Although concessions account for only about 20 percent of gross revenues, they represent some 40 percent of theaters’ profits. That’s because while ticket revenues must be shared with movie distributors, 100 percent of concessions go straight into an exhibitor’s coffers.

Although if distributors could decide they would get a share of that revenue and profit as well. Equally interesting is another finding:

In another study examining Spanish theaters, the researchers discovered: Moviegoers who purchase their tickets over the Internet also tend to buy more concession items than those who purchase them at the door, by phone, at kiosks, or at ATMs (the latter option has not yet hit the United States). More research is needed to figure out why, but for now this suggests that theaters may want to be sure to partner with an Internet service to make such ticketing available–or even take the function in-house.

People who come to the movies in groups also tend to buy more popcorn, soda, and candy, Hartmann and Gil found. While this, too, merits more investigation, it may be that such groups comprise families or teenagers. “If that turns out to be the case, it may be that theaters will want to run more family- or adolescent-oriented movies to attract a more concession-buying crowd,” Hartmann says.

No surprise there either that John Fithian is arguing for more PG films. He knows which side his popcorn are butter coated on. Those wishing to download the research paper can find it in PDF form here.

Photo credit: www.mobilnews.cz/blog

Popularity: 34% [?]

Posted in Concessions, Market Research

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AccessIT Wins Cinema Buying Group Bid

By J. Sperling Reich

April 2, 2008

After months of industry speculation, the Cinema Buying Group (CBG) has finally announced which digital cinema integrator they will be going with to help roll out the emerging technology to its more than 600 members in the United States and Canada. The buying program put together by the National Association of Theatre Owners (NATO) for small and independent theatre operators announced that AccessIT was their choice to provide digital cinema equipment and service to more than 8,000 screens.

When CBG initially sent out their request for proposal back in the first half of 2007 it quickly sent digital cinema integrators and equipment suppliers into a frenzy. Of the ten vendors that submitted initial proposals, CBG slimmed the list down to four finalists by November of last year; AccessIT, Digiserv, Kodak and Technicolor. Another round of information gathering occurred before CBG made their decision public earlier today.

Popularity: 24% [?]

Posted in Digital Cinema, Integrators

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