NATO president John Fithian sent a letter to exhibitors today encouraging donations to the Community First Foundation to aid victims of the shootings in Aurora, Colorado and their families.
As we watch the aftermath unfold and try to make sense of this terrible crime, you should be encouraged by the leadership and dedication of the community of Aurora as they comfort and assist their families and neighbors. The courage of the victims, their families and loved ones, the theater employees involved, the responders and hospital staff members has steeled the resolve of the community and its leaders to recover from this tragedy and to emerge even stronger than before.
Our industry, as it has countless times before, stands ready to help those in need. Many of you have expressed your concern and asked our guidance on how best to respond to help the victims and their families. We have been working within the industry and with the community leaders in order to give you some direction.
If you would like to generously donate, please write a check to: Community First Foundation
*Dedicate your contribution to assist the victims in Aurora:
Community First Foundation,
6870 W 52nd Avenue, Suite 103
Arvada, CO 80002
If you would like to make an online donation, please go to:
www.GivingFirst.org .You can donate with all major credit cards (Visa, MasterCard, Discover or American Express) or information from a bank account (personal checking).
If the amount you wish to give is $100,000 or more and you would like to do a wire transfer, you can contact Community First Foundation at 720-898-5900.
To reach this conclusion, he uses the same tool to analyze the success or failure of 3D - the average gross per screen in 3D compared to the average gross per screen in 2D. He shows, quite convincingly, that the average gross per screen for 3D versions of movies is declining relative to the 2D gross. But is this comparison the right one to use? In my September column for Boxoffice magazine arguing against another popular flawed metric - percentage of box office in 3D - I suggest that a far simpler and more illuminating measure is whether movies are making more money in 3D than they were before:
Opening weekend 3D percentage of the gross (movies chosen by Greenfield to illustrate his point and listed in chronological order)
How to Train Your Dragon - 68%
Shrek Forever After - 61%
Thor - 60%
Pirates of the Caribbean 4 - 46%
Kung Fu Panda 2 - 45%
Green Lantern - 45%
Cars 2 - 40%
Transformers 3 - 59%
Harry Potter 7.2 - 43%
Noting the Harry Potter percentage in an investors note, Greenfield flatly states, "3D has collapsed in the United States." Has it?
Opening weekend 3D gross
How to Train Your Dragon - $29.7 mil
Shrek Forever After - $43.3 mil
Thor - $39.6 mil
Pirates of the Caribbean 4 - $42.6 mil
Kung Fu Panda 2 - $30.6 mil
Green Lantern - $23.7 mil
Cars 2 - $27.1 mil
Transformers 3 - $57.6 mil
Harry Potter 7.2 - $72.67 mil
Clearly, the percentage of a movie's gross coming from 3D does not tell us anything useful about whether or not there is "weakening demand" for 3D movies. The seven point slide from How to Train Your Dragon to Shrek Forever After might seem alarming; the 16 point dip from Transformers 3 to Harry Potter 7.2 even more so—audiences are losing interest in 3D! Yet Shrek's 3D box office was 45 percent higher than Dragon's; Potter's was 26 percent higher than Transformers' and 144 percent higher than Dragon's. Also note that Potter and Transformers opened on roughly the same number of 3D screens (4,250 and 4,146, respectively). Twenty-six percent more people going to a 3D movie on only 2.5 percent more screens seems to me to be a pretty strong indicator of increasing demand.
The per screen averages for 3D are also un-illuminating. We do not know, for instance, what size auditoriums were playing in 3D or 2D for any particular movie - in other words, a $15,000 weekend gross in a 350-seat auditorium is a different thing than the same gross in a 100-seater or a 700-seater.
We are also in a completely different environment than we were in a year ago. In August of 2010, there were 6,286 3D screens in North America at 2,558 locations; a year later, there were 12,738 3D screens at 3,015 locations. The number of locations offering 3D increased by 17.1% and the number of screens increased a staggering 102.6%. So what's going on?
A year and more ago, if you were interested in seeing a movie in 3D, you had to see it in a limited number of places, with a limited number of screens devoted to 3D. Consequently, those screens were far more likely to sell out. Today, there are far more screens available to watch a 3D movie - and there might even be more than one 3D movie available for you to watch. What you are seeing, in other words, is the logic of the multiplex.
There are a lot more screens available to show a 3D movie - most of them in locations that already had at least one 3D screen a year ago. What does this accomplish? The same thing that offering multiple auditoriums in a complex with multiple showtimes does with 2D movies - choice to consumers and the possibility of maximizing revenues by making that choice available.
The modern multiplex offers a range of sizes of auditorium, which allows theater owners greater flexibility and the opportunity to maximize each available seat. Consider a single screen with 1,000 seats. That auditorium can offer, say, 4 showings a night (for the sake of argument, 5:00, 7:30, 10:00 and 12:30) for a possible 4,000 ticket sales. In a multiplex, say, with 14 screens, the same movie might be scheduled in four auditoriums with seating 375, 275, 200 and 150, respectively (again, 1,000 seats). With staggered start times, those screens can show the movie sixteen times while offering the same 4,000 possible tickets. This increases the likelihood of selling the maximum number of tickets, because you are offering customers a broader range of choices that matches more precisely their scheduling needs. But you have a lower per screen average.
The only question for him seems to be how big of a flop. The headline for his post gives you some idea: "Is DirecTV's $30 movie rental test a flop of 'Ishtar'-like proportions?" Yikes.
Why he thinks it flopped mirrors NATO's thinking on the issue precisely:
The lesson here? As long as Netflix is around the studios are never going to have any luck getting fans to spend three times what they pay for a regular theater ticket to see a movie 60 days after its release, even in the comfort of their own homes. Once you get past the initial theatrical run, the price of entertainment is heading down, not up. The DVD boom is over. We are fast becoming a nation of renters, not buyers.
Say it with me: "Once you get past the initial theatrical run, the price of entertainment is heading down, not up."
The sky is not falling in the realm of 3D films. There has been much hand-wringing over the last couple weeks as moviegoers have embraced their right to choose to see the latest summer tent-poles in 2D over the higher-priced 3D venues. For the record, over the last two weekends, audiences purchased tickets to Kung Fu Panda 2 and Pirates of the Caribbean: On Stranger Tides in their respective 2D formats at a rate of 55/45. So, despite those films playing in majority 3D theaters (around 65%), 3D ticket sales made up only 45% of the box office for their respective opening weekends. This is not a new issue and it is not cause for panic or rebuttal. Rather, it is a healthy sign that audiences are making an informed choice and that studios are offering a wide swath of moviegoers a genuine option when it comes to their 3D franchise pictures.
Twenty-three prominent directors and producers signed an open letter calling on the four studios involved in the early "premium video on demand" offering from DirecTV. The Hollywood Reporter covers it.
One of the letter's signers, former Fox studio chief Bill Mechanic, speaks at length with David Poland of Movie City News about the value of the theatrical release window, below:
It's a business defined by your stupidest competitor. - Bill Mechanic
“I do feel it’s not wise to erode your core business,” said Mr. Cameron. The problem, he said, is not that on-demand offerings will overlap with the theatrical run, since most films are out of most theaters within a month. Rather, he said, many potential viewers might skip the theatrical experience, knowing that a movie would soon be available at home.
and, in response to the suggestion that high-grossing films like his would not be affected:
“For me, it’s enlightened self-interest,” countered Mr. Cameron, who voiced concern that early video-on-demand would weaken the theater industry, making it harder to release even films as grand as his own.
The Wrap details some of the options theater owners have in response to shortening the theatrical release window for "premium" video on demand.
What stands out for me, amidst the arguments pro and con and the throat-clearing before the main event, is the remarkable logic behind this:
Curiously, the distribution executive TheWrap spoke to Tuesday doesn't seem to have big hopes that the new window will be wildly profitable for the studios.
He said the main goal of the initiative is to "re-establish" the $30 price point for home viewing in the mind of the film-consuming public -- a price point that used to exist with DVD, the executive added, before operators like Netflix and Redbox came in and started offering a "smorgasbord" of content for well under $10.
"The value of content, to me, can easily be re-established by creating this premium window," the executive said. "Whether or not people buy the films for $30 is not important. What is important is that it puts the price at $30 for a viewing."
How, exactly, does one establish a price point at a price that customers show no signs of being willing to pay?
In a stunning suspension of disbelief, many studio executives argue that an enhanced early at-home alternative will encourage MORE people to go to the movie theater -- do people this naive really exist? It sounds exactly like the last ten years of internet gurus and solons calmly insisting that free (stolen) music would encourage higher CD sales. See how well that worked out. Fool me once ... call me a record executive; fool me twice ... what do they think, we're politicians?
Anonymous goes on to offer a truly disturbing view of the current thinking at the studios:
As for the impact on theatrical attendance, I believe it will be devastating. However, among studio execs the best case quoted to me was a 10 percent drop in attendance with the executives insisting that, "Some theaters will close, others will raise prices ... it's all good." The reality is that a 10 percent drop in total attendance, across the board and permanent, will cause 2/3 of all the theaters in the U.S. to close their doors and never open again.
When I brought this up, the response was that movie theaters were just a real estate play anyway so profits didn’t matter to the theater companies -- something which hasn't been true for 30 years. Today, virtually all theaters are in leased premises rented from mall owners with only older, outdated facilities still existing on owned property.
The lack of knowledge of the economics of the theaters is stunning – but it pales in comparison to the lack of interest in hearing any point of view other than their own.
Read the whole thing. It's some of the best analysis of the economics and value of the theatrical space I've ever read.