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Saturday, April 30, 2011


IF YOU'VE READ THIS BLOG FOR ANY LENGTH OF TIME YOU'RE WELL AWARE that I have two parallel interests - the cinema and environmental sustainability.  These two interests merged in 2009 when (with the folks at ScreenTrade) an environmental accreditation initiative specific to cinemas - the Arboreel Group - was launched.

Arboreel has taken stutter steps since its inception, as cinema exhibitors (large and small) don't seem to feel the necessity to initiate sustainable practices in their day-to-day management and operations.  This is unfortunate, as cinemas are large users of energy, water, and disposable products.  Money is the big roadblock, as becoming green means spending green, at least upfront,with investment recoupment in the out years.  However, recoupment is getting faster and faster as energy, water, and concession products get costlier and costlier.

You don't have to be a pathfinder or early adopter to embrace sustainability. Moving to a darker shade of green for a cinema can be gradual and, for the most part, monetarily painless.

Contact the Arboreel Group at 800-448-1656 if you have an interest or for information on the Arboreel Program.

Best and Happy Movie Going
Jim Lavorato

Content Alternatives At Cinemas

THE IDEA OF HAVING CINEMAS BECOME "VIEWING VENUES" where a variety of content is exhibited is nothing new!  In fact, I wrote an article on this topic over a decade ago - Theatres Become Viewing Venues, September 1999, Film Journal International.
Although the notion has been around for over 30 years (in the 1970s boxing matches were exhibited in cinemas via satellite feed) non-movie content has not caught the public's interest and , in our mind, will never be a big revenue generator.  According to Screendigest the U.S. market accounts for 58% of the global in-cinema alternative market which totaled $112 million in 2010.  The most screened content being the Opera followed by sporting events and live concerts.

NCM Fathom and CinemaLive are the major players offering non-movie content to cinemas.  Their goal is to have cinemas go well beyond the Opera and other cultural offerings and move into areas like children's programming.  For example, CinemaLive offers a Junior Series which includes productions by The Wiggles and Dorothy The Dinosaur.

Although the concept is worthy, and I am certainly a proponent of any initiative that increases a cinema's utilization, the notion of non-movie content ever becoming more than "filler" for a slow Tuesday or Wednesday evening or Saturday morning at a cinema is wishful thinking.

Having said that, for years I have harped on the downside ramifications of digitizing cinemas, as, to me, it would introduce the end of Hollywood's reign over the distribution of movies.  Could it be that the giant media congloms (and owners of the studios) don't care about cinema exhibition in light of all the new avenues of distribution for movie content now evolving (PCs, tablets, smartphones, WebTV, and yet to be developed mobile devices) - and are willing to relinquish their control of "film" distribution to the digital domain and a myriad of competitors offering cinemas alternative content.

Think hard Hollywood. Don't wish for a digitized cinema world, you might just be the loser in the end.

Best and Happy Movie Going
Jim Lavorato

Friday, April 29, 2011

You Can Fool Some Of The People ...................

As a postscript to the April Moola Report, I wanted to point out an issue many people seem to ignore or not think about - and that is the effect of a devalued Dollar.

If listening to or viewing a financial show or reading a newspaper you hear or see the great earnings being reported by the large U.S. corporations and how they are all beating their revenue and earning estimates each quarter, and their stock prices are at record levels.   However, one must keep in mind that most, if not all of these large corporations be it Exxon or Coke, generated a large portion (at least 50% and in many cases much more) of their revenue and earnings from their non-U.S. operations.  Therefore with the Dollar at historic lows against most other currencies when locally generated funds are converted back to cheaper U.S. Dollars presto - you get more dollars which in turn unrealistically inflates reported revenues and earnings.

Best and happy investing!
Jim Lavorato

Tuesday, April 26, 2011


                         CMG   TRENDS                         
        Rising                Falling                 Splat   

   Amazon Tune             iTunes                        Napster
       Tablets                    Laptops                           PCs
        WebTV                Set Top Box                     Tivo
      Netflix                       RedBox                    Blockbusters

                               STATS  &  FACTS    

  • In the 4thQ of 2010 30 million Americans accessed financial services via mobile devices.  Up 54% from 2009. Smartphones pushing trend.
  • Disney broke ground on a $3.7 billion theme park in Shanghai last month adding to its overseas parks in Paris, Hong Kong, and Tokyo. Growth for all of the media giants will be overseas going forward.
  • Google ranked number one by BrandFinance Global as most valuable brand in the world. Traditional brand leaders such as, Coke and Marlboro, will continue to lose ground against tech companies.

Monday, April 25, 2011

Digital Cinema/3D Bulletin - Issue #103

Where Is 3D and D-Cinema Going?
As in now stands, the only folks pushing D-Cinema are the equipment manufacturers and the virtual print fee advocates.
  The projector manufacturers (Sony, Christie, Barco, NEC) all now make a full line of projectors to accommodate various cinemas (based on size) from screening rooms to drive-ins. Sony touts their 4k resolution while the others claim easy upgrade of their 2k projectors to 4k.  Either way the public could care less and 4k still doesn't get you to 35mm film's 6-8k resolution.

The server and peripheral equipment producers, including 3D (Dolby, Doremi, Real D, MasterImage, GDC, X-panD, Datasat, Panavision, and others) present nothing new but are reducing prices to entice converts.

The VPF advocates are pushing hard on converting exhibitors to digital but their is no rush for exhibitors as the studios have presented a drop dead date for the program at sometime in 2012.  So, why opt for the VPF scheme now?
The exhibs still have plenty of time, the price of equipment is dropping, and you still have to line up financing to qualify.

So, as things stand right now, the D-Cinema/3D landscape is pretty much as it was 6 months ago.  We'll keep you up-to-date on any changes.

Best and Happy Movie Going
Jim Lavorato

Wednesday, April 20, 2011

CMG Moola Report - April 2011

WITH THE U.S. BOX OFFICE DOWN OVER $600 MILLION (19.8%) YTD THE CINEMA INDUSTRY - from studio mogul to usher - is praying that the summer line-up of films (which starts in May) will produce a tsunami of back-to-the-cinema moviegoers.

YTD Box Office As of 4/15/11      Rio - which broke a string of anemic box
       ($ millions)                            office weekend tallies - is, hopefully, an omen
   This Year - $2,537                     of greater things to come.  Hollywood has over
   Last Year - $3,164                     150 films scheduled for summer release and the
   Decrease  - $627 (19.8%)          roster looks strong. Moola's favorite picks:  
Thor, Bridesmaids, Pirates of the Caribbean, The Hangover II, Everything Must Go, X-Men, Green Lantern, Bad Teacher, Transformers, Captain America, Harry Potter, Crazy Stupid Love, and one or two sleepersWe've got our fingers crossed!

                            CMG STOCK INDEX UPDATE

                                               Share Price       
                                            1/1/11      4/18/11        Chg.   

Ballantyne Strong                $7.77        $6.72        $ (1.05)
Carmike Cinemas                  7.72          7.12           (0.60)
Cinedigm Digital                    1.68          1.88            0.20
Disney                                   37.51         41.35            3.84
Dolby                                    66.70         44.48        (22.22)
Enter. Properties Trust         46.25         46.13         (0.12)
IMAX                                    28.07         30.99          2.92
Netflix                                  175.70      241.55         65.85
Natl' Cinemedia                     19.91        17.00         (2.91)
Rentrak                                  30.16        22.80         (7.36)
Regal Entertainment             11.74        13.57          1.83
TimeWarner                          32.17        35.59          3.42
Technicolor                             3.56          4.89          1.33

Excluding Netflix and Technicolor, the stocks in the CMG index have taken a beating this year bucking the overall stock market which has been on a general uptrend with some sectors seeing double digit earnings growth and corresponding share price increases.

Netflix is the obvious anomaly in the index and points to where the cinema industry is headed. Internet streaming looms large in the future and content may again be King , as there will be many more avenues for distribution as the future unfolds.  Stymied by distribution concentration over the last decade the studios have had a tough go as content distributors ruled. Now the screw is turning the other way. High speed streaming fosters a myriad of distributors and places content providers back in the driver's seat.


Dolby develops and sells audio and video products specific to the entertainment industry.  Its product line is vertically integrated and supports film production, television broadcast, and music production.  Its competition ranges from large entities, such as Sony and NEC to smaller firms like QSC and DTS

Its share price as been on a steady downtrend over the last 52 weeks, going from a high of just over $70 to its current trading range of $45.

Management cut its 2011 outlook recently, citing lower licensing revenues due to lower worldwide PC sales.  Current estimates call for 2011 sales to reach $965 million up from 2010s $878 million level, with EPS at $2,71 vs. $2.47 last year.

Dolby's problem, which is not unlike many other tech driven companies, is in its ability (or lack thereof) to keep pace with products and collaborations in a very quickly evolving digital domain. For example, PC sales will continue to fall as smart phones and tablets act as surrogates for the once dominate PC.

Dolby's competition is changing as well.  Management must contend with an ever increasing array of data streaming and content distribution companies, while addressing tightening margins as they fend off  competitors while continuing product innovation.  Dolby must rely on its old and trusted markets while entering new ones with a variety of new players - not an easy task.

CMG's Outlook For Dolby

Dolby will maintain a steady-state. Share price will hover in the $40-50 range until the market perceives a breakout either due to a technological edge or a strategic collaboration which  drives revenues.  It must concentrate on its  core revenue base, but as its share price reflects, steady-state is not rewarded and it must broaden its scope as the entertainment industry transitions to a web based distribution structure.  Dolby could be viewed as a valued acquisition or merger candidate given its licensing and solid, core business revenue streams.  

Moola Speaks Out: Washington Needs A Wake Up Call

A napping Joe Biden during Obama's economic oratory and snoozing air traffic controllers are an unfortunate metaphor for our government's overall manama attitude to the country's economic woes.

The United States, according to the Federal Reserve, is valued at $60 trillion. The current debt totals $14.3 trillion or over 23% of the country's  net worth.  Unfortunately for us the debt is increasing at a rate 4X that of the economy.

Given the situation and the Government's unrealistic solutions - the
Republicans say their fix-it plan will cut the debt by $5.8 trillion in 10 years, while Obama and the Democrats say their plan would whittle the debt down by $4 trillion in 12 years - can anyone, with even a smidgen of real-world savvy, buy this nonsense !  10 Years? 12 Years?  And we would still be (at best) $8 - 9 trillion in debt. 

Adhering to the Washington crowd's proposals to fix the fiscal dilemma is akin to placing our nation with an endless Sisyphean burden.  The U.S. economy is currently running in sand and staying the present course will produce one of two bad things, either: inflation ( fed by easy money and spending) will run rampant; or stagflation (where prices rise without corresponding economic growth) will kick in. Either way both Wall Street and Main Street lose.  

Sunday, April 17, 2011

Diary of a Drive-In Theatre: Installment #2

In this second installment we cover the most important item for a drive-in's construction - the SCREEN!

Besides the land upon which it is located, a drive-in's screen is it's most important and expensive asset.  Unlike an indoor cinema where vinyl, perforated screens are the norm, a drive-in screen is much larger (typically, at minimum, 40ft. high x 60ft. wide), much sturdier , and made of a solid material.  I should note that over the last decade or so the practice of multiplexing has occurred in the drive-in community.  Feeling the need and desire to increase profits by exhibiting more movies, drive-in owners - using the existing acreage footprint - have added screens. Unfortunately these added screens are invariably much too small (in many cases smaller then indoor cinema screens)  to obtain the true drive-in movie experience. 

Construction of the Screen Tower

Once screen size is determined (based upon acreage and the number of vehicles  it can accommodate) the construction of a drive-in screen normally takes 10 days. Termed a tower, the screen should be positioned like home plate, the projection booth at the pitchers mound, and parking spots in the infield flaring out to left, center, and right fields.

First:  Large holes are dug (typically 4) 6 feet deep. The main tower supports  are then placed into the holes and re-enforced concrete poured in to fill the holes.  It takes 10 days for the concrete to "cure".

Second: After seven days, the construction crew returns and begins building the tower frame. Made of steel, the frame is erected using pieces which were fabricated at the factory to the specifications of the predetermined screen size.  Liken the frame to a very large erector set.  By the time the frame is completed (about 2-3 days) the concrete is 90% cured, and it is now time to install the screen panels.

Third: A drive-in screen is normally made of aluminium panels, factory  pre-painted using a highly reflective white paint.  They are usually 18 inches wide and half the length of the screen height.  Although there are seams where the panels meet, they are not noticeable from a distance and certainly not by the drive-in patrons.  What is seen is a large, bright-white rectangle.

What's Next

Yeah, yeah, I know. You're waiting with the excitement of a child on the eve of their birthday (really, that excited ?) to know what the screen size is going to be for the drive-in upon which this diary is based.  Well, after careful consideration, and the previous statement I made in the first installment that we wanted to go with the largest screen possible - the tower (at the yet to be revealed no-name drive-in) will be: 50ft. high x 70ft. wide.

The  next installment will discuss what  projection and sound equipment a modern day drive-in uses, you'll be surprised!

Best and Happy Movie Going!
Jim Lavorato

Saturday, April 09, 2011


OVER THE LAST SEVERAL YEARS AN EXPENSIVE AND UNSAVORY TREND has emerged in the cinema industry - the charging of onerous fees by manufacturers to attend training courses on their products.

For dealers and exhibitors all manufacturers' training programs should be at the expense of the manufacturer.  Because a dealer is an agent of the manufacturer.  The dealer represents, promotes, sells, and pays the manufacturer for the product.  And then, in most cases, installs, services, and educates the end-user on the proper operation and maintenance of the product.  As for the exhibitor, the same holds true.  Why should an exhibitor pay to train on a product they are purchasing.

Both Christie Digital and Barco Projection offer training courses on their D-Cinema products, costing upwards of  $5,000 per person to attend.  This is the exact opposite of what should be the case.  The manufacturer should be paying attendees to train on their equipment - not the other way around!

This is but one more reason why using a reputable full-service dealer adds value.  The dealer should be technically capable of professionally installing any product they sell and train the exhibitor on how to operate and maintain it as part of the cost of the purchase of that equipment.

If any exhibitor feels the need for training on a cinema related issue they should attend a workshop offered by Cinema Training Central (http://www.cinema-training.com/).  For example, CTC offers a workshop entitled "Digital Cinema/3D - All The Options" for $395.  This workshop covers all of the current D-Cinema projection and related server/software options, plus all of the 3D systems (digital and film based).

Don't be too quick to sign up for training that should rightfully be free with the purchase of major equipment.  And depend on your cinema dealer for training , not the manufacturer.

Best and Happy Movie Going
Jim Lavorato


CINEMA OWNERS/OPERATORS are under the delusion that if they 'buy direct' from a manufacturer they are getting a great deal.  I noticed this - buy direct spiel - being practiced by several manufacturers on the trade show floor during the CinemaCon convention.

Let's set the record straight. Manufacturers normally sell direct to an end user at list price.  Whereas, purchasing that same product through a full-service dealer would be at a discounted price.  For example, a cinema dealer, which represents many different manufacturers, receives discounts which can vary from 35-65% off list price.   In turn, the dealer passes a significant portion of that discount on to the cinema customer.  Why?  Because that full service dealer is also providing other value added services, such as installation, training, and on-going maintenance.  Customers also benefit in other ways.  For example,  Entertainment Equipment, the company I manage, provides free extended warranties, extending any manufacturer's warranty for a full year at no cost to the customer. - a huge plus and savings when purchasing a big ticket item.

So, if you think 'buying direct' saves, think again - you'll be surprises!

Best and Happy Movie Going
Jim Lavorato


THERE WERE HIGH EXPECTATIONS for CinemaCon (the Las Vegas cinema convention which replaced ShoWest) on its inaugural.  It's debut could have easily become a CinemaCon-job but the convention proved otherwise.

Holding the fest at Caesar's Palace was a huge improvement over Bally's - the old and convention unfriendly venue where ShoWest lived for years.  Caesar's is spacious, updated, and offers a variety of dining, shopping, and entertainment options.  So. overall CinemaCon had an auspicious premiere. Can it be improved - yes, but it was a quantum leap from the antiquated ShoWest.

One improvement, that should be given consideration, is to have attendance for the Trade Show free of charge for all those that pre-register. This would substantially swell attendance (currently just under 5,000) and make for a more profitable and robust affair. In tandem with free admission,  the Trade Show should be two full days from 10am-4pm without other event conflicts. Instead of the current two half days and one full day. This would make for a more efficient use of time by the trade show exhibitors and attendees.

Kudos to NATO (the fest's manager) for hosting a new cinema convention which will see CinemaCon-tagion in the years ahead.

Oh, what's up with those tacky orange plastic convention sway bags.?

Best and Happy Movie Going
Jim Lavorato

Thursday, April 07, 2011


As predicted, many moons ago, the days of the DVD rental/sale are numbered.  The last major video store chain, Blockbuster Video, went bust and was up for auction last Monday.

Ravaged by savvy newcomers - Netflix and RedBox, which offered consumers cheaper and easier access to DVDs, Blockbuster was devoured. In turn, as I write this , Netflix is trying to advance its mail delivery strategy by inking deals, as fast as it can, with the movie studios for internet streaming rights. Netflix management knows this will not be an easy task, as it will have to battle with the likes of Amazon, Microsoft, and Apple (to name several) in this space.  RedBox will also have to provide a web-based distribution strategy if it is to survive.

The digital domain is littered with the carcasses of many former robust and profitable entities which, like Blockbuster, have come to their end.  Digital technology ceaselessly progresses and the Hollywood studios should take a hard look at their current strategy of having movie theatres convert to digital projection.  For if the studios lose their control of movie distribution we will begin to witness the end of Hollywood as we know it.

Best and Happy Movie Going
Jim Lavorato

Saturday, April 02, 2011


It seems many are feeling the financial and emotional pain inflicted by this year's dismal boxoffice gate (which actually started to freefall last holiday season).  My previous post - Are We Witnessing The Collapse Of The Cinema - opened a floodgate as I was bombarded with all manner of venting from the digital domain. 

It's quite apparent that many in and out of the cinema industry feel that film distributors and exhibitors are not responding to the obvious lack of interest in moviegoing by the general public.  A phenomenon, I believe,  due to content which is not compelling enough to motivate an expenditure north of $30  (and in some cases much more) for two admissions and concession at the local cinema.


Many of the comments I received were thoughtful and one of the most telling can from Debbie Adams , owner of the Joylan Theatre in Springville, NY.  Her comment centered around not getting access to enough product and would like to see the playing field leveled.  For example, she does not know why Drive-in theatres have access to many more films , with shorter play dates, and double book all the time.  Why can't the Joylan double book and have shorter runs as they play second run most of the time.
Good point. 

This is but one of the situations faced by small exhibitors and there are many others. What puzzles me is if you have an distribution point for your product and customers willing to buy it  why not give the retailer (exhib.) the product to sell, especially since the product (a movie) has a very finite life.


What once worked in the FILM BOOKING business doesn't anymore. The current and archaic movie booking business needs to be restructured.  The whole process should be on-line, straight forward, and exhibitor friendlyI'm sure a process can be devised whereby exhibs. are given access to upcoming films and playdates in a menu driven, secured format controlled by the studios.

I know this will sound like heresy to many in the industry but a complete redo of the movie booking business is way overdue. The current process is seriously out-dated and does not provide an efficient, flexible , or best use of technology.  A revamped and streamlined booking process would provide enhanced profits for both the distribs. and exhibs.  Think about it.

Best and Happy Movie Going!
Jim Lavorato