ShoWest 09 marked a change in programming. Monday has in recent years been "International Day," but with the increasing interconnectedness of the industry, it no longer made sense to separate out the international programming. Hence, Monday became the official opening day instead of the traditional Tuesday.
Fox's Jim Gianopulos kicked off the Opening Day luncheon with an overview of the health of the exhibition industry:
Gianopulos' Keynote Address was a speech laced with charts and graphs showing how the theatrical moviegoing experience continues to grow despite the recent economic upheaval and recession. He noted that despite the dramatic increase in home technology like HD televisions and Blu-ray, those who own five or more pieces of home theater technology are still more likely to go to the movie theater every weekend than less. He mentioned that movie attendance continues to be the #3 choice for most people going out for their entertainment and that it made up a larger audience of those going to sporting events, Broadway theater and other activities, which tend to be more costly. International growth was also a large factor, noting that North America made up roughly half of the over $18 billion grossed at the box office worldwide in 2008, and that there was a lot of room for growth.
A picture of James and the Giant Graph is here. A chart showing how people who use 5 or more home entertainment technologies go to more movies is here and another one showing what the inside of my brain looks like is here.
Moderated by G. Kendrick Macdowell, VP, general counsel and director of government affairs at NATO, the panel featured two studio execs who have pledged support in the form of virtual print fees to individual exhibitors. Mark Christiansen, executive VP of operations at Paramount Pictures, deemed his studio’s plan “incredibly easy…something you can do now.” But Fox exec VP of digital exhibition Julian Levin, who is also reaching out to individual cinema owners, bluntly criticized the streamlined Paramount offer document as having “a lot of holes,” contrasting the Fox approach as that of “a grown-up business.”
Even more contentious was exhibitor George Solomon, CEO of Southern Theatres. Dismissing the role of third-party integrators like Cinedigm and Digital Cinema Implementation Partners, he declared, “I believe that mid-size circuits should be able to negotiate virtual print fees directly or have their own consortiums… I don’t believe in giving a cut to an integrator.”
The plain-speaking Solomon, whom Macdowell at one point compared to a crafty Southern lawyer, proved not much of a champion of the digital revolution. “35mm is still better,” he contended. “What’s the difference between a hard drive and 35mm film? Forty pounds!” Arguing that the benefits of digital accrue mainly to the studios, he challenged, “If distribution wants 2K, give us the money!”
Utah Governor Jon Huntsman has vetoed H.B. 353, an amendment to Utah's Truth in Advertising law, that would declare that a deceptive trade practice occurs if a business publicly states that it will not sell a product labeled with an age restriction or advisory to anyone under the age specified and then in fact makes a sale to someone under that age.
Publicly touted by perennial (and disbarred) anti-video game gadfly Jack Thompson, the amendment would allow patrons to sue retailers and movie theater operators after the third offence. The obvious problem with the bill is that the most likely solution open to retailers and movie theaters is to stop posting notices that the voluntary industry rating system will be enforced rather than risk a lawsuit over the most inadvertant failure to enforce them.
NATO, along with the Entertainment Merchant's Association and the MPAA lobbied vigorously for the governor's veto. In NATO's letter to the governor, NATO's Vice President, General Counsel & Director of Government Affairs Kendrick Macdowell noted
H.B. 353 destroys that private partnership and substitutes the specter of government-imposed liability for mistakes or intermittent errors by theater employees-all based upon exhibitors promoting ratings enforcement. H.B. 353 effectively takes what everyone agrees is good and constructive conduct by business and makes it the basis for vexatious lawsuits and expensive liability. What rational Utah exhibitor would fail to hesitate before ever again promoting ratings enforcement and inviting rounds of lawsuits? While we understand and respect the impulse of Utah lawmakers to promote age-appropriate restrictions on access to entertainment products, H.B. 353 would perversely have the opposite effect-encouraging silence on ratings enforcement.
Utah Association of Theatre Owners president Dick Cornell testified to that likely response of Utah's theater owners before the legislature.
The industries most affected by this new requirement indicated that rather than risk being held liable under this bill, they would likely choose to no longer issue age appropriate labels on goods and services. Therefore, the unintended consequences of the bill would be that parents and children would have no labels to guide them in determining the age appropriateness of the goods or service, thereby increasing children's potential exposure to something they or their parents would have otherwise determined was inappropriate under the voluntary labeling system now being recognized and embraced by a significant majority of vendors.
Box office is booming, and ABC News takes a look on the Friday before the Oscar telecast.
If you look closely, yours truly has apparently gotten a new job as spokesman for the previously unknown "National Association of Theatregoers". Aside from the really ugly acronym (NATg), they don't exist. We really like theatregoers, but we don't speak for them.
The Hollywood Reporterweighs in with 2008's projected box office tally from Nielsen EDI (the official keepers of the box office numbers for the MPAA and NATO) and it looks mighty sweet:
Meanwhile, buoyed by good weekday numbers and potentially strong holds over the holiday weekend, overall domestic boxoffice is poised to set a record. As of Sunday, 2008's year-to-date boxoffice stood at $9.45 billion, according to Nielsen EDI. By the close of business Sunday -- bringing down the curtain on the boxoffice year -- 2008 should surpass 2007's record haul of $9.62 billion by a couple of percentage points.
The final admissions tally won't be known until the end of January, when the year's average ticket price is calculated, but we expect it to be a little behind 2007.
Digital Cinema Implementation Partners (DCIP), a consortium of exhibitors Regal Entertainment Group, AMC Theatres and Cinemark, announced they have struck a deal with five Hollywood studios to support their digital cinema rollout. According to AP:
Five Hollywood studios have agreed to help pay for a $1 billion-plus rollout of digital technology on about 20,000 movie screens in North America, a precursor to showing movies in 3-D.
Digital Cinema Implementation Partners, a consortium of major theater chains, announced the deal Wednesday. The rollout in the U.S. and Canada, covering about half of all screens, is planned to start early next year.
DCIP topper Travis Reid noted that the rollout remains contingent on securing financing for the deal - a difficult task in the midst of the ongoing credit crisis.
"We'll be needing to execute in the debt markets and we hope to do that during the fourth quarter," Reid said. "We don't believe that the markets will be closed forever."
With a deal in place for the largest U.S. theater chains, it is time to conclude a similar digital cinema agreement for the hundreds of independent cinemas and thousands of screens not covered by this agreement. It is imperative for the health of the industry and for the millions of moviegoers in small towns and cities that the benefits of digital cinema be spread as widely as possible.
NATO, through the Cinema Buying Group (CBG) and its selected digital cinema integrator Access Integrated Technologies, Inc. (AIX), continues to work with the studios to ensure that CBG members, who are smaller and independent exhibitors, often in small towns, are not left behind.
The answer lies in the fact that the studios, either by happenstance or by design, are taking a very passive-aggressive approach in their negotiations with DCIP. Several studios are demanding higher virtual print fees, which exhibitors insist they can’t afford. Other studios are demanding that exhibitors convert to digital now in order to justify the costs of the 3D features due out next summer.
In some cases that passive-aggressive attitude exists in the same studio. In interview after interview Jeffrey Katzenberg, CEO of Dreamworks Animation has led the charge all but demanding that exhibitors waste no time in converting to digital, this of course so that his 3D movies can make more money. Yet his long-time partner Steven Spielberg tried to block the digital release of Indian Jones and the Kingdom of the Crystal Skull. In a recent story on the topic reported in the Chicago Tribune Spielberg is quoted as saying, “Making a film on celluloid, as I like to do with all of my pictures, but then transferring it and releasing it and projecting it digitally is a very inferior image.”
Where does that leave the transition to digital cinema, and by necessity, 3D?
Scylla, meet Charybdis:
John Fithian, president of the National Association of Theatre Owners, says the situation has placed exhibitors squarely between a rock and a hard place. "Several studio leaders currently hope to reduce substantially the virtual print fee support they are willing to provide for the digital cinema transition, at the same time that several other studio leaders demand that exhibition install many systems rapidly for the 3D slate in 2009,” he says. “And at the same time one of the industry's filmmaking icons refuses to release a big summer picture on digital cinema screens except for locations where that is the only option. So, should we or should we not move faster with the digital roll out? How do they possibly believe that exhibitors will do anything less than push back? Maybe they should get their act together first before they try to tell us what to do."
So when do we put the "budge" in budget? Insiders differ. Some suggest the deals are dependent on a successful resolution to SAG/AMPTP negotiations, others ascribe the hold-up to the credit crunch fueled by the home mortgage meltdown.
What seems crystal clear (and you don't need special glasses to see it) is that the delay is all about the Benjamins. The 2009-2010 3D slate has only upped the urgency of resolving the basic calculation with a concrete and near-term demonstration of how much (and whose) money is at stake.