Regal Entertainment Group Chairman and CEO Mike Campbell and NATO President and CEO John Fithian chat about theatrical exhibition with The Hollywood Reporter's Carl DiOrio.
Before getting outside the box office, they get right into it:
THE HOLLYWOOD REPORTER: Will summer 2008 set another new boxoffice record?
CAMPBELL: We have a strong slate of films this summer, but what you’re missing is what I’d call the three money-in-the bank films you saw last year in May. There’s a lot of diversity in product this summer, but will it be a record summer? I can’t say that.
FITHIAN: This year we have a few more unknowns. Some of those will surprise on the upside and some on the downside.
THR: And the year?
CAMPBELL: What I would say about the fourth quarter is that last year that was our weakest quarter, so on a comparable basis I think there’s more powerful product in that quarter of this year.
FITHIAN: I don’t disagree at all. I think it’s also important to remember we are coming off two up years in a row.
THR: Exhibitors tend to like less restrictive ratings, yet there continues to be a regular flow of R-rated movies. Are you OK with that?
CAMPBELL: From a selfish, economic point of view as an exhibitor, we do better with PG and PG-13 films, and on any given year you generally see 17 or 18 of the top 20 films as PG or PG-13. There is still a place for R-rated films, but we do better at the boxoffice and at the concessions with PG and PG-13 films.
FITHIAN: I am mystified why everybody in Hollywood wants to be Quentin Tarantino instead of trying to sell movie tickets.
THR: Any other specific advice for Hollywood on the kind of pictures they should make?
FITHIAN: More family titles of any genre. When you take an action film and decided to make it PG-13 instead of R, it does better. And in most cases, if you have a comedy and decide to make it PG-13 it does better, although there certainly is a role for the harder-edge comedies as well. But as the father of a 5-year-old, there are times I am looking to go to the movies with my child and can’t.
THR: You like to encourage “ 12-month releasing.” Isn’t there a limit to how many tentpoles can open while school is in session?
FITHIAN: Yes, but we’re still doing it wrong. Virtually every school in the country is still in session the first weekend in May, and the biggest movies in 2007 were released over the first weekend in May. Yet we leave April almost entirely off the table, and the circumstances of school are very similar in April and May.
There are only so many blockbusters you can tolerate in the year, but in summer when they are so close together we are losing money. With those huge titles last May, we lost— in my estimation —$50 million$100 million because we had them all in one month. If one of those had been in April, I think we would have made a lot more money.
CAMPBELL: We could increase the boxoffice several percentage points by having a release schedule that was spread a little more evenly.
NATO president John Fithian addressed NATO of Wisconsin and Upper Michigan's Geneva Convention Wednesday, touching on the state of the industry, summer movies, the digital transition, 3D and what trimester Jeffrey Katzenberg is in, and more, courtesy of Boxoffice.com, below.
NATO president John Fithian responded to remarks made by Jeffrey Katzenberg about the slow pace of 3D cinema installations. In a Varietyinterview, Fithian previewed a speech he is scheduled to make at ShowCanada today.
Fithian countered that some of the studios can't agree on what they'll pay the top three circuits in virtual print fees and that circuits need to have those fees in place before they can make the costly investment.
He wouldn't name names, but industry insiders say that Disney, 20th Century Fox and Paramount are close to agreement with exhibs, while Warner Bros. is far behind. Universal and Sony are still in talks.
Katzenberg "suggested it is the cinema companies who are dragging their feet," Fithian said. "That is not the case," he added.
Further, Fithian noted that Katzenberg's colleague, Steven Spielberg has been, at best, lukewarm about the conversion to digital cinema.
There was an outcry among theater owners earlier this year when Par suggested it wouldn't supply digital prints of Spielberg's "Indiana Jones and the Kingdom of the Crystal Skull," because Spielberg wanted the movie played only as film on 35mm screens. Filmmakers including Spielberg sometimes balk at having their movies shown in digital when they were shot on film.
Not providing a film like "Crystal Skull" on digital would slight theater owners who have made the conversion, according to exhibs. Theater owners have long argued that there's no reason to make the transition if the product isn't there.
Par changed its position and will be releasing digital prints of "Indiana Jones." Exhibs aren't entirely mollified, though, since digital prints will go only to those houses where all the screens are digital. If there's a mix of screens in a theater, that theater will get only a film print.
Spielberg a print tease? Get your popcorn, the show isn't over. It's only intermission.
The Cinema Buying Group announced today it has chosen AccessIT to be the digital cinema system integrator for the more than 8000 independent screens under the group's umbrella.
Wayne Anderson, CBG managing director, complimented the quality of submissions from all vendors in the CBG’s Request for Proposal process.In the end, he said, “AccessIT offered the winning package of extensive experience, exhibitor choice, and competitive cost.Our mission is historic: ensure that independent cinemas survive and thrive in the digital age—and AccessIT proved its skill and determination to make that happen.”
More, from the press release:
The CBG began as a small buying program for independents—but mushroomed quickly into its current size and significance when it became an advertised vehicle for independents to acquire digital cinema equipment and service.NATO’s vice president and general counsel, Kendrick Macdowell, said, “NATO’s commitment to the broadest possible digital deployment for our industry is well-known.We’re proud to have worked with a man of Wayne Anderson’s stature to ensure that the march of digital cinema does not leave behind the vital independent segment of exhibition.”
Nobody wants a bad economy, but movie theaters are well positioned to do well in tough economic times. In five of the seven recession years over the last four decades, box office revenues have gone up - as much as $670 million in one case. And it's not hard to see why:
Click the image to watch CNN's Brooke Anderson report on why movie theaters do well in recessions. Interviews with NATO President and CEO John Fithian and Media by Numbers' Paul Degarabedian are included.
Village Roadshow sparked quite a bit of interest with its announcement of $35 a ticket luxury cinemas featuring restaurant and bar service. USA Today weighed in almost simultaneously with a story on alcohol service in movie theaters. The story leans heavily on the possibility of underage moviegoers being served alcohol. As part of the permitting process, movie theaters go to great lengths to demonstrate how they will segregate the alcohol service from the more accessible areas of the theater - information USA Today had, but omitted from the story.
A great article in NATO's former magazine, In Focus, covers the problems and prospects for alcohol service in the cinema.
Meanwhile, Fox Business Channel interviews yours truly about luxury cinema:
"The North Atlantic Treaty Organization was once a force to reckon with. During the Cold War, it possessed formidable capabilities and real cohesion. No more. As a serious military enterprise, the alliance has all but ceased to exist. The "other" NATO -- the National Assn. of Theatre Owners -- probably wields more clout."
The Cinema Buying Group, representing more than 8,700 North American movie screens, has narrowed its list of prospective vendors for its digital cinema RFP to four. For this second round, vendors must provide sufficiently detailed cost information which would enable CBG to evaluate the total initial and recurring costs to exhibitors - details that were necessarily lacking in the initial round of proposals.
The vendors, according to CGB's press release - AccessIT, Digiserv, Kodak and Technicolor - will also now need to describe how they will accommodate all CBG members - whether by the creation of different classes based upon different cost structures, different equipment packages, different sequencing, or otherwise.
This request of the vendors is made with the understanding that distributors may not wish to sign open-ended VPFs with four different vendors. According to Kendrick Macdowell, NATO Vice President and General Counsel, and counsel to CBG:
We have asked distributors to execute CBG-specific VPF agreements with the remaining four vendors as expeditiously as possible so that these vendors can crunch their numbers and respond with their final and best offer to CBG members.
These VPFs would likely be conditioned on a winning bid for the CBG project and allow for a competitive final phase of the RFP.
According to CBG managing director Wayne Anderson:
For small theater owners across North America, this process means surviving the digital cinema revolution, and that means not losing access to the big screen in many communities. We're pleased with the quality of the submissions so far, and we hope to move this final selection phase quickly.