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Friday, December 31, 2010

NO LONGER A CHEAP DATE !

Going into the holiday season the U.S. cinema boxoffice gross was up slightly over 1% vs '09; however, the holiday movies proved to be a major Christ-miss and the B.O. slid into negative territory ending the year 4% behind as the holiday B.O. ended 44% below 2009's take. Worse still, admissions were down a whopping 6% for the year. Obviously no one in the industry wants this trend to continue, especially in light of grosses being bolstered by premium 3D pricing (for 2010 average ticket prices were up 6%).

The global B.O. mirrored the U.S. results with the only bright spot - you guessed it - China, where the B.O. grew by 60% (addendum below).

What this dismal 2010 performance tell us is that people believe that going to the cinema is becoming too expensive, particularly for films they have no burning desire to view. They believe admission and concession prices are too high and that the movie going experience doesn't provide the entertainment value it once did.

The cinema may be pricing itself out of business irregardless of admonitions from many in the industry that contend going to the movies is still inexpensive as compared to other forms of entertainment. The point they miss is that one shouldn't compare going to the cinema vs. attending a football game but against viewing that same movie via on-demand HDTV - at a much lower cost.

Prognosticating is never absoulte but by analyzing trends you can get a sense of which events will shape the future and prepare for them:

- The conversion of film to digital projection at cinemas will slow. Not required to exhibit 3D, as there are on-film systems available for that. And the quick obsolescence of the rather expensive equipment makes conversion much less attractive for exhibitors.

- Alternative content at cinemas is at best a peripheral revenue generator and will remain so.

- The biggest threat for cinemas in the future will be on-line streaming which will continue to take its toll on B.O. attendance unless Hollywood can contain its greed for ever faster returns on content delivery.

- People still enjoy going to the cinema but more and more it will be because they want to view a movie at a venue that provides them a special out-of-home experience.

- With 30-40 releases scheduled for 2011, the 3D craze could easily turn into 3D fatigue. I believe people will begin to assess each 3D movie as to whether or not it's the type of movie that benefits from the 3D effect and merits their payment of the 3D up-charge.

It's going to be rough sailing for the movie industry going forward. So, every exhibitor must be on their best game and take advantage of every opportunity and anticipate and react quickly to every adversity.

China addendum:

Representing only 6% of worldwide cinema gross B.O., China's share can be expected to increase significantly in 2011 and beyond. It will be lifting its ban on allowing only 20-30 foreign films into the Chinese market each year (part of its deal for admission into the WTO). With only 8,000 screens China has a lot of room for growth (the U.S. has 38,000) and it wants and is starting to develop its own cinema industry.

Best and Happy New Year!
Jim

Monday, December 27, 2010

3D - Cinema Fixture or Fad?

Whether or not you believe 3D is a permanent box office draw or just a passing fad, for now at least, certain 3D films do enhance box office grosses and with over 40 3D flix scheduled for release in 2011 it may be time for movie exhibs to consider 3D if they haven't already done so.

With many exhibs. facing this challenge, for 2011 Cinema Training Central will be offering a new workshop specific to addressing this very issue. Entitled " D-Cinema and 3D - All the Options", this seminar/workshop provides a complete analysis and discussion of all of the D-Cinema projection systems(including the new Kodak laser projector) and all of the current 3D options - four digitally based and the two on-film. Studied are the costs and features of each system and how relevant (or not) they are for each exhibs' cinema.

So, if D-Cinema and/or 3D is in your plans or you are just looking for unbiased information on the latest digital cinema and 3D technologies, this low cost workshop will provide you the information and data necessary to make an educated and confident decision, and perhaps save you a lot of time and money!

For information on this and all of the other training programs offered by CTC go to www.gotoeec.com, or simply reply to this post.

See you at CTC!

10 Years After

Celebrating its 10th anniversary in 2011, the only constant for Cinema Training Central, over the last decade was change! CTC's seminars and workshops were constantly being refreshed, revised, and upgraded to address the fast-paced changes taking place in the cinema industry. Through it all, CTC not only survivied but thrived by enhancing its relevance and reputation.

Although others have tried, today CTC remains the One and Only provider of structured, targeted, and hands-on training for the cinema exhibition industry. Having trained over 800 individuals from all over the world since its inception we anticipate CTC's success and support to continue as we move forward and begin a new decade. CTC will continue to offer new and relevant training to meet the changing and demanding needs of our cinema customers.

Monday, October 11, 2010

Hollywood v. Wall Street

As a follow up to my June post on the battle between Wall Street and Hollywood regarding the trading of box office futures contracts, an explanation of how these financial derivatives are traded and who would benefit or not from their implementation is necessary for movie exhibitors to understand.

HOW FUTURES CONTRACTS WORK

Each movie has it own contract. The price of that contract is based upon the current market consensus of how much a particular movie will earn over the first four weeks of its initial release. Investors profit from either their prediction on the success of the movie (buy long) or its anticipated limited gross (sell short).

Contract pricing is based on 1/1,000,000th of the total Domestic Box Office Receipts collected during the first four weeks after the movie's release. If the movie exhibits longer, any ticket sales will not count towards the value of the contract.

So, for example, if the market determines that a movie will bring in $100 million during its first four weeks and an investor believes that it will do $100 million or more they would buy a contract(s) valued at $100 each. On the other side, if they believe the film will not reach its predicted $100 million gross they would sell a contract for $100.

If-in this example-the movie grosses $200 million the contract seller would lose their $100 investment while the buyer would make $100 and double their investment.

There are two exchanges vying to trade box office futures - the Cantor Exchange and the Trend Exchange. They differ in that the Cantor Exchange would allow traders to buy and sell contracts for as little as $50, while the Trend Exchange will require a minimum $5,000 investment.

Proponents of allowing trading in box office futures believe that it would help Hollywood hedge its losses, essentially offering insurance that would allow risk to be defrayed to traders - similar to a farmer hedging his corn crop. And that such a market would be very useful for, among others, independent movie producers and distributors as they could hedge their movie investment in the event it turns out to "bomb" at the box office.

BENEFIT TO EXHIBITORS

Like the farmer, the movie exhibitor could use the futures contracts as a hedge against a film not producing the box office grosses expected and reaping the benefits of a short seller by selling futures forward. If the movie does not do well the exhibitor benefits by collecting on the contract. If the movie grosses well or even better than anticipated the exhibitor loses the investment on the contract but reaps the rewards from a good box office take. It's essentially buying insurance against a potential risk.

As of today, Hollywood , by active and effective lobbying of the U.S. Congress, has so far prevented the trading in box office futures. However, my guess is that it's just a matter of time before the trading of these contracts becomes reality. There is just too much money at stake in the production and exhibition of movies for it not to happen.

Jim Lavorato

Monday, September 13, 2010

STREAMING - EXHIBITORS' OTHER COMPETITION

Consumers have shifted away from purchasing DVDs to rental and in the home video rental arena - Netflix and RedBox are the only games in town. Both companies saw an opportunity to provide more convenient and less-expensive ways for consumers to rent movies and both have benefited mightily. Movie rental stores like Movie Gallery and Hollywood Video have closed, and Blockbuster is struggling to stay afloat. But the future in home movie viewing is all about internet downloads and streaming, and when it comes to internet distribution Netflix and RedBox (which both have movie streaming initiatives) will face heavy competition from the likes of Amazon, AT&T, Google, and Microsoft to just name several.

I expect physical DVDs to be around for some time but there will be a continuous shift to movies delivered via broadband internet streaming.

So the movie industry is changing and every movie exhibitor should be thinking about the future and making plans now to confront the opportunities and uncertainties the future will bring.

Friday, September 10, 2010

MOVIES RIDING HIGH ON 3D

With a boost from a lackluster economy - as people seek affordable distraction from their financial worries - movie exhibition and home videos are doing well.

A quick look over the shoulder tells us that the global boxoffice hit an all-time high of $29.9 billion in 2009 - up 7.6%. The U.S./Canada market accounted for $10.6 billion of the total, up 10% over '08, while the international B.O. hit $19.3b.

Dig deeper and you find that in 2009 3D films accounted for 11% of the total U.S. boxoffice - compared with just 2% in 2008. Twenty 3D films were released in '09 compared with only eight in '08. Exhibitors, overall, net a 20% profit margin on 2D movies but 30% on 3D. So, exhibitors continue to convert screens to 3D - both digital or on-film systems.

The question becomes - "will there be 3D fatigue"? Will the public tire of too many 3D releases? Well, as always, it all boils down to quality of product - good 3D films will bring in lots of moviegoers. A good test will be "Harry Potter" and the "Tron Legacy" - both would probably be very good 2D earners but in 3D they should be huge smash hits.

With over 40 3D films scheduled for release in 2011 the 3D craze will continue to drive the boxoffice higher even with the huge success of "Avatar" and "Alice In Wonderland" at the beginning of '09.

Look for continued price reductions for both D-Cinema and 3D systems alike.

Thursday, September 09, 2010

CTC TRAINING - NOW MORE IMPORTANT THAN EVER

The movie industry is in a major transition phase as both exhibitors and distributors face new and challenging changes. Some of these challenges require proactive initiatives, others are out of their control - all must be planned for.

Exhibitors must decide to invest in 3D or not - be it digital or on-film. Either way - exhibitors must get the best information and training available - not only in their 3D decision but in dealing with the coming competition from digital streaming of movies to a cache of consumer electronic devices unimagined just a few years ago.

CTC provides exhibitors informed and unbiased training using the most up-to-date information. For example, during the upcoming September training week (9/20 - 9/24) all of the training programs will address the 3D issue in some way.

It is not too late to register for a September course - email us right NOW!

Thursday, July 01, 2010

3DTV - IS IT SAFE?

..."Viewing TV using the 3D function can cause motion sickness, and perceptional after effects. Some viewers may experience an epileptic seizure or stroke when exposed to flashing images - please consult with a medical specialist before using the 3D function."

..."In the event you experience dizziness, nausea, or other discomfort while viewing 3DTV images, discontinue use and rest your eyes."

..."Do not watch 3DTV continuously for multiple hours. When viewing stereoscopic images, please take a break every 15 minutes."

The above three quotes are not from a consumer advocate group or medical association but are warnings from 3DTV manufacturers! In this case, Samsung, Panasonic, and Hyundai respectively. These 3DTV manufacturers' concerns are imminent, as it is estimated that 3DTV sales this year will top 6.9 million sets.

Currently there exists evidence that 3D viewing can cause - at best - fatigue and discomfort and - at worst - serious visual and perception problems. This evidence concerns what is termed the "vergence-accommodation conflict." This is caused by a home 3D viewer's eyes focusing at a distance that differs from the point of visual convergence. In the real world, focus and convergence are correlated, but if you place someone in front of a stereoscope display, that relationship is entirely lost. This conflict can lead to a variety of health issues with prolonged home 3DTV viewing.

The industry believes that reproducing the cinema 3D experience in the home will solve the problem. For example, Panasonic is currently working with the Univ. of Southern California on research to determine the "psycho-physical" effects of long-term 3D viewing at home. Panasonic's V.P. of Corporate & Government Affairs, Peter Fannon, feels "Full 3D display in the home at 120 Hz most closely replicates the experience of natural vision since it effectively presents everything the human eye can see". While Mike Kim, American Sales Director, Hyundai, however, sees the future of 3DTV viewing with passive, circular polarized glasses - like those used in cinemas. "We believe passive glasses result in less eye strain and prevent flicker."

Cinemas need not worry about these issues as the 3D viewing at cinemas is not prolonged; although, a small percentage of moviegoers complain of headaches and sight fatigue.

You'll probably hear and read more on this 3DTV health issue as time goes on, and we'll keep you informed as this issue unfolds.

Monday, June 21, 2010

FEDS APPROVE TRADING IN BOX-OFFICE FUTURES

On Monday (6/14) the Commodities Futures Trading Commission (CFTC) announced it had approved the trading of futures and options contracts tied to the box-office revenue of movies.

Hollywood, including all the major studios, guilds, and the MPAA were vehemently opposed to the trading of these contracts stating that they could impair the performance of films as market traders began looking for ways to affect a movie's opening.

The derivatives would be traded on the MDEX Exchange, aimed at large and institutional investors. The contracts would begin trading four weeks before a movie opened and end trading as the film premiered on its opening weekend.

As of today, the battle continues as Senator Blanche Lincoln (D-Ark.) has sponsored a senate bill - the Wall Street Transparency Act - which would prohibit such futures trading. Backers of the trading argue that movie futures are a way to finance movies and to hedge the risk of movie financing.

I'll continue to follow this development and how it will impact or be used by exbibitors to hedge box-office revenues.

PANAVISION'S NEW 3D SYSTEM

Panavision, Inc., the California based manufacturer of precision camera and related equipment for the motion picture industry announced on Wednesday that it had developed the first 3D System for cinemas that is compatible with all screens - white or silver - and with all projectors - film or digital.

The Panavision 3D System is being introduced next week at Cine Expo - Amsterdam. The System will enable exhibitors to show 2D or 3D content on the same screen - similar to the Technicolor 3D System. The Panavision uses a special lens for film projectors and a filter mechanism for digital cinema projectors, and includes the use of reusable glasses.

No pricing was given for the System or the glasses, nor were any particulars regarding contractual items for the use of the System. Panavision stated that their new System will be available worldwide by the Fall of 2010. I'll keep you informed.

3D SPURS U.S. BOXOFFICE

It appears, that for the foreseeable future, 3D films will be the U.S. boxoffice drivers. Last year, the year-over-year increase in boxoffice revenue was due entirely to 3D films and their accompanying higher admission prices (up to $15 in some locations).

Therefore, the issue for cinema owners/operators is not "if" but "when" to get on the 3D bandwagon. With the publics' current craze for 3D even the single-screen theatre owner must consider installing either the Technicolor on-film 3D System or a D-Cinema platform w/3D System to compete and draw in moviegoers.

Exhibitors should think hard, and in my opinion, get on the 3D bandwagon as soon as possible. For advice and information regarding any aspect of the current 3D Systems
- their required specifications, equipment, cost and financing - contact us at 800-448-1645.

CTC & CATHAY GROUP - LINK-UP FOR ASIAN CINEMA TRAINING

In March, the Head of Training & Staff Development for the Cathay Organization Holdings, Ltd., Anya Loh, visited CTC in Buffalo to attend a training and orientation program. The week-long program included a wide variety of topics - from
3D to concession operations.

Resulting from this visit the Cathay Group has extended an invitation to CTC to conduct training workshops for 50 of their senior and technical staff at their headquarters in Singapore and their offices in Kuala Lumpur, Malaysia. Tentatively scheduled for October 2010 we are very excited about this partnership as it reinforces CTC's preeminent position in the cinema training arena.

This year, the Cathay Group is celebrating its 75th Anniversary in the cinema industry - as film producer, distributor, and exhibitor - and it recently opened the second largest cinema complex in the world in Dubai, UAE.

The international boxoffice grew over 7% in 2009 and now accounts for over two-thirds of the global boxoffice. In contrast, last year, the U.S. cinema market was constant in terms of admissions, while the boxoffice gross increase was driven entirely by 3D films and their higher-per-ticket pricing.

Like other overseas exhibitors, the Cathay Group, is experiencing real growth and this is expected to continue for some time. As such, CTC will be at the forefront in assisting organizations to properly train and develop staff to manage and cope as they grow and expand their cinema operations.

Wednesday, June 09, 2010

BENEFITING FROM THE CINEMA'S LOW ECO-COMMITMENT

These days - in view of the consumer's general cynicism toward business - there are not many initiatives a company can act upon which will positively enhance their sales and brand. However, one way to buck this trend is to be viewed as an environmentally friendly and socially responsible local business.

Virtually every consumer survey I've come across indicates that roughly 80% of the public view environmentally friendly businesses favorably and, as such, would be a business they are more likely to support with their patronage. So, being viewed by moviegoers as an eco-friendly, local business is a major positive in garnering on-going and continued support for your cinema.

As a follow up to my last article, I wanted to continue the theme of adopting sustainability initiatives that, one, can be easily implemented, and two, improve the bottom line while enhancing your cinema's eco-credibility.

WHAT ARE OTHERS DOING

The cinema seems wide open to becoming greener. For example, at this year's ShoWest Cinema Convention I found very little in the way of green products or services being marketed.

Therefore, it is even more advantageous for any cinema to develop, institute, and publicize their green initiatives - essentially becoming a green trailblazer. This would add tremendous value and credibility to your sustainability program and add very little cost to your plan.

This is a unique opportunity for cinemas - all of your environmental actions and initiatives should be "voiced" in all of your marketing, public relations, and sales activities.

BE REALISTIC BUT AGGRESSIVE

Recognize that the real return-on-investment of your sustainability efforts won't happen overnight. That's why it is so important to set realistic and achievable goals that can be built upon. However, you can and should publicize your actions, from the get-go, and continue this promotion. Don't be shy, as a cinema operator you are at the forefront in the greening movement of your industry.

Cinema's have a conspicuous public persona and, right now, is the right time to take advantage of an inevitable trend that is going to continue far into the future. So, be realistic about your goals and plans but once you start be aggressive.

The public is looking to local businesses to be not only good stewards of the environment but leaders in sustainability efforts impacting their neighborhood. View this public concern as an opportunity to re-ignite and rejuvenate your cinema's community relationship - the time is right!

Monday, May 03, 2010

THE BOTTOM LINE IS, WELL THE BOTTOM LINE

Many, who are managing businesses, believe that embracing an environmental sustainability strategy is bad for the bottom line. But, like all business decisions the right decisions are the ones that favorably impact the bottom line and having the right sustainability program will do just that.

A study, just issued by A.T. Kearney, a global management consulting firm, found that companies with a "true commitment to environmental sustainability" outperformed their industry peers. The study found that in 16 out of 18 industries studied, sustainability focused companies outperformed their peers by 15% over the last 6 months of 2009! Those are huge numbers. More importantly, the study found that companies prospering most were the ones with the oldest sustainability programs and it's these companies that are now superior to their peers in terms of competitive advantage and market momentum.

As I've reported to you in the past, any company that makes the decision to adopt a more efficient eco-profile and where the sustainable endeavors become a fundamental part of the business strategy, numerous benefits in terms of profitability, branding/marketing and staff relations will accrue. This is now being validated by studies - like the A.T. Kearney one - which positively conclude that reducing energy and water consumption, recycling, and re-education of staff on sustainability issues are business realities which must not be ignored or discounted.

Corporate environmental policies can no longer be viewed as nice to have prerogatives. Price Waterhouse Coopers, the accounting and consulting firm, has documented that clients - which reported and tracked their sustainability efforts - experienced superior returns on assets than clients that did not. So, it is critical to be able to demonstrate the value and return on investment that instituting environmental reforms can make. Gradual sustainability transformations are much easier to benchmark, track, and report on, so to begin - think small.

To demonstrate, lets go really small and really easy. This month, replace all dry-cell batteries with rechargeable ones (a small investment). Over the next 6 months measure how much was saved in supply costs by switching to the rechargeables and the internal benefits gained by instituting this small recycling initiative - you'll be surprised.

Over the next several issues I will present other actions that can improve your bottom line through sustainability. And remember: tangible results from environmental sustainability efforts won't happen overnight, so it's important to set realistic and achievable goals that can be built on over time.

Good luck!

Friday, April 02, 2010

ShoWest - IT WAS ALL ABOUT 3D

IT SEEMS THE 3D CRAZE IS EVERYWHERE - 3D TVs, 3D VIDEO GAMES, 3D DVDs, 3D SMART PHONES, AND OF COURSE, 3D MOVIES - AND THE CRAZE WAS AT FULL THROTTLE AT SHOWEST THIS YEAR.

RUMORS WERE RAMPANT AT THE SHOW. SO, DID I WALK A AWAY WITH ANY SOLID ANSWERS - NO!

AM I THE ONE WHO HAS TO MAKE THE HARD DICISIONS - NO! IT'S THE MOVIE EXHIBITOR THAT HAS TO MAKE THE HARD DECISIONS, AND THIS YEAR SHOWEST WAS ALL ABOUT DECIDING WHAT NOT TO DO, WHAT NOT TO BUY, WHAT NOT TO EMBRACE, WHAT NOT TO INVEST IN. IT WAS ALL ABOUT TRYING TO DECIDE - BY VIRTUR OF ELIMINATION - WHAT THE BEST COURSE OF ACTION REGARDING WHAT ARE LONG-TERM, STRATEGIC DECISIONS IMPACTING THE MOVIE EXHIBITOR'S BUSINESS.

GO WITH DIGITAL CINEMA AND 3D OR GO WITH THE NEW ON-FILM 3D OPTION, OR GO WITH NO 3D AT ALL.

Wednesday, March 31, 2010

T-3D - WHERE THE FUTURE LIES

FOR MANY EXHIBITORS THE TECHNICOLOR ON-FILM 3D SYSTEM (T-3D) MAY BE THE ONLY WAY FOR THEM TO EXHIBIT 3D FILMS - AND PARTAKE IN THE CURRENT 3D CRAZE. IF YOU ARE INTERESTED IN THE T-3D OPTION CONTACT US FOR FULL DETAILS - IT MAY BE THE OPTION FOR YOU.

APRIL TRAINING WEEK AROUND THE CORNER

Digital Cinema, 3D options, technical issues, management and concession innovations, all of these and many more up-to-the-minute cinema topics will be covered during CTC's upcoming April Training Programs (April 19-23).

For details go to www.cinema-training.com or call us at 800-448-1656. Don't leave yourself wondering about the dramatic changes occurring in the cinema industry and how they (financially and operationally) impact your cinema. Get all the answers and information so you can make the right decisions - visit us at Cinema Training Central - it's easy, economical, and arguably the best and most beneficial decision you can make regarding the future of your cinema (your business).

Monday, March 15, 2010

THE MOVIE INDUSTRY 2010

A sub-sector of the larger Media and Entertainment industry, the 'movies' are under much less pressure from the cyclicality of the global economic downturn as their venerability is driven more by the absence of boxoffice hits than economic weakness. Moreover, movie attendance does not make up a significant enough proportion of a consumer's overall entertainment/recreation spending to be cut dramatically in a downturn.

For 2010 the U.S. cinema's performance, both boxoffice attendance and revenue, should exceed 2009's results with continued hit driven films and the positive impact of 3D - which is still new and novel with the public. Additionally, in-cinema advertising, which grew by 17% in 2009 to over $900 million, will buck the more general slowdown in overall advertising expenditures and can be expected to increase 9-12%, and exceed the $1 billion mark this year.

EXHIBITION - STEADY AS SHE GOES

Exhibitors although somewhat burdened with escalating operating expenses and high fixed costs, carry limited inventory and all sales are essentially immediate (cash or credit card}, making for a very low level of receivables while payables are extended and paid on traditional business terms. Although the movie exhibition business does have some concentration (large circuits like Regal and AMC} there are limited benefits to industry concentration given strong buyer (moviegoers) and supplier (studios) power present in the industry. Exhibitors are highly susceptible to top-line volatality ss they are completely reliant on the studios for the quality and quantity of their product stream, making for limited opportunities to differentiate particularly in the case of the large circuits. However, direct competition for exhibsitors is low, their threat comes from indirect competition - the distribution of movie content through non-traditional channels such as DVD, VOD, and the Internet coupled with a collapsing window of exclusive theatrical release.

Nonetheless, movie going remains popular and affordable, although I would be cautious regarding exhibitors ability to maintain boxoffice and concession pricing increases over the next several years. Therefore, movie operators must pay particular attention to operating costs as debt levels and lease obligations are high on average, as are capital expenditures meaning that excellent cash flow and operating expense management is imperative.

DISTRIBUTION - IN AN UNFRIENDLY WORLD

Digital initiatives, such as Digital Cinema, are not consequential to the movie industry's overall profitability. The introduction of 3D will provide a boost to both attendance and admission revenue (with premium 3D pricing) but it remains to be seen if this trend will continue over time.

3D or not, the movie industry is a hit-driven business The large studios are housed within media/industrial conglomerates (Time-Warner, Disney, GE, Sony, News Corp., Viacom) and are viewed as relatively modest profit contributors to the consolidated operations of these media giants. However, there are huge barriers to industry entry by outsiders, the most notably being control of a global network. Moreover, there is limited direct competition between the studios as they do not compete on price but on content delivery that can fluctuate significantly year-to-year. Quality of film product will continue to be the main driver of movie attendance and revenue. Going forward, I would expect the studios to focus more on titles, characters and stories that can be leveraged into other licensing and ancillary products and outlets. This should be good news for exhibitors as well given that these concept/character-driven movies - particularly the fantasy and superhero films - are the current boxoffice center spikes.

OUTLOOK

Moving forward exhibitors should look to improving operations by increasing productivity and efficiency. Implementing environmental sustainability programs which reduce energy, water, and waste costs, improving local community relations, introducing non-movie (alternative) content and activities, and finding ways to enhance their patrons' entertainment experience.

Distributors must be very careful regarding their adoption of digital distribution as this could lead to the eventual loss of their global distribution control - which exists only because it is film (analog) based. The downside for the media giants would be seeing the film industry succumb to the "digital" fate of the music and publishing industries.

By: Jim Lavorato, President
Entertainment Equipment Corp.

Tuesday, January 26, 2010

BUILDING YOUR GREEN CRED

With an eye on the future, it's important for your business to build its environmental sustainability reputation and credibility. It makes all the difference if your company is perceived as a value player in the green movement - and as we all know - perception is reality.

No business wants to be open to accusations or even worse the perception of green washing. The lesson here is you must foster and demonstrate through positive actions a deep and long-term commitment to sustainability issues and effectively communicate to your customers and community.

To build your Eco-cred follow these steps:

- A company should engage with a variety of different local/national or perhaps even international groups that have sustainability goals in common with yours. This engagement should be accomplished on a regular basis, and is preferable to single issue initiatives as it reaps much more positive results and cumulative benefits.

- Consider paarticipating in local programs. It is not necessarily better to focus on high profile media opportunities. In fact, in many cases, going local is the preferable tact.

- Always research the groups you are working with and/or sponsoring for their credibility as well. What have they accomplished in the past and what are their goals regarding sustainability? Teaming up with an organization - private firm, public entity, or not-for-profit - with a lot of sustainable cred can make all the difference.

- Initiate programs and actions that present your company as a meaningful contributor and practitioner of sustainability practices. Don't fool and don't spin this issue, as a bad reputation is going to be very hard to fix.

To build a truly sustainable business reputation companies must do more, a lot more, than just talk a good show or implement a few superficial energy saving initiatives. The environmental program you adopt must be strategic, long-term, thoughtful, and productive not only for the company but for the community at large, and your customers. Being part of the global ecological initiative and demostrating your commitment to it will bring significant benefit to your firm's eco-credibility and, over time, your firm's profitability and goodwill.

By: Jim Lavorato

Monday, January 11, 2010

CUSTOMERS DRIVE SUSTAINABILITY

Completed in September, a survey undertaken by the Packaging Industry Digest (PID) reported that 66% of companies (across all products and industries) reported that customers are driving their sustainable decisions. However, the survey found that only 21% of companies have formal, written policies on sustainability. This points to a real disconnect between customers/consumers and companies' sustainable practices and policies. Additionally, a full 53% of companies reported they have no measurement tool in place to evaluate performance or track progress of their sustainable activities.

As a counterweight a whopping 93% of the companies surveyed stated that Green Washing - the deceptive use of marketing by companies to spin their products and policies as environmentally friendly - was an on-going problem in their purchasing decisions regarding sustainability.

The PID study which surveyed over 500 companies of various size further reported that 69% of companies expect to receive a return on their investment in sustainable upgrades and capital improvements. With 82% expecting a payback on their investment within 2 - 5 years.

When, not if, you begin planning for your company's sustainability contact the Arboreel Group* - which can assist, direct, provide follow-up, and quantify your progress, savings, and ROI.

*Arboreel Group - Designs, develops and certifies environmental sustainability programs and initiatives for cinemas and is managed jointly by Entertainment Equipment Corporation (entequip@aol.com) and Screentrade Magazine (screentrademagazine.com). Arboreel Group is a member of the U.S. Green Building Council and an EPA - EnergyStar participant.

LOOKING AT CLOUDS

Want to reduce energy costs & consumption - one sure and simple way is to get rid of your computing equipment. If your company is large enough to run various applications on a daily basis look to the clouds for a solution.

Cloud computing is used to store, retrieve, and manipulate company files and data. Cloud computing users only use what they need and pay for only what they use. When a company stores applications in the clouds, money and energy is saved because applications run on shared infrastructure where many businesses are utilizing the same server. Think of your emails - they're in a cloud and do not reside on your PC.

Subscribing to a cloud service provider requires little or no capital. The service is delivered over the Internet for a monthly fee and has the potential of saving a business a lot of money.

Cloud computing has been in existence for several years so any "bugs" cloud providers may have experienced have now been solved, and they are very safe. Cloud providers include Amazon, Microsoft, and IBM to name just several.

Friday, January 08, 2010

THE TECHNICOLOR "OVER/UNDER" 3D

The Technicolor on-film system enables exhibitors (worldwide) to use their current 35mm projectors to exhibit 3D films. The on-screen image is comparable to digital 3D and will allow exhibitors to charge a ticket premium just like digital 3D.

Requirements for the Technicolor 3D are a silver screen and certain lighting and film projection parameters which must be met and maintained to run their system. Technicolor will provide a special lens to each exhibitor meeting the specified requirements. Proper evaluation of each auditorium to comply with Technicolor's projection specifications and installation of the lenses will need to be performed by a Technicolor certified cinema equipment dealer that is also a bonafide technical cinema service provider - such as Entertainment Equipment Corp.

The system works with industry accepted polarized glasses and all of the film prints will be optimized for 35mm 3D using Technicolor's new post-production over/under processing.

Thursday, January 07, 2010

3D BECOMES MORE INCLUSIVE & PROFITABLE

Currently to run a 3D movie an exhibitor needs a Digital Cinema Projection system and a compliant 3D system - costing approx. $100,000. Given this situation, thus far, only a small number of cinema screens (approx. 3000 out of a total universe of 35,000 in the U.S.) have opted for this capability and the ones that have only upgraded one or two screens at each multiplex.

Now Technicolor, a stalwart in the cinema industry, has developed a new on-film 3D System which will be made available to exhibitors in the near future. The cost of the Technicolor 3D will be much less than the current digital based systems and should be viewed as very good news for both the studios and exhibitors.

3D films generate a significantly greater per screen gross vs. 2D versions of the same movie - so distribution of more 3D films should generate higher grosses and attendance. The U.S. boxoffice gross will exceed $10 billion for 2009 - a record, but not a lot of revenue for a major industry. For example, Wal-Mart grosses $10 billion in sales on any given day. However, the cultural footprint of the cinema is huge in comparison to its dollar value. And certainly for big media a movie's theatrical release is only a small portion of a movie's life cycle as a product. By lowering the cost of 3D, Technicolor's new on-film system will be a boom to the movie industry - both for distributors and exhibitors alike and validates the premise of those, like myself, who have been postulating for some years now, that going digital would be the demise of Hollywood as the studios would lose distribution control. And as we all know, in the digital domain, it's distribution, and not content, that is King.