Last week Cinemark, the third largest movie exhibition chain in the U.S., announced that it was not going to exhibit, Tower Heist (Universal), because Universal (Comcast) had stated that it was going to offer the movie via its video-on-demand service just three weeks after the theatrical release.
Well, imagine that. Like this threat from Cinemark really matters to Comcast! It's like I've been saying for 5 years now - not that I like saying "I told you so" - but movie exhibitors have no juice, because they bought into the digital game. Eventually movies will be available day-and-date across the world to everyone as content is streamed on a variety of devices and outlets with cinemas being just one outlet. Cinema exhibitors just don't have the juice in terms of numbers to back up their threats.
The millions movie exhibitors spent (and are still spending) on D-Cinema conversions should have been spent on changing their business models - refocusing their branding and marketing, connecting to their local communities, upgrading their facilities to more sustainable operations, and on and on.
Cinemark is fighting the wrong battle, and one they can not win. In the digital age, movie exhibitors will be marginalized and will become just one of many outlets where films will be viewed. Therefore they must concentrate on basic strategies of improving the movie going experience as it will become harder and harder to compel consumers (who will have a vast array of entertainment alternatives via their connected TVs and other mobile devices) to get off their sofas and pay a visit to the the local cinema. Exhibitors need not only good content but must offer an exceptional out-of-home entertainment experience to survive.
Not to be left out, the studios are also in a precarious position. As the Comcast buyout of Universal, so vividly, demonstrates - the studios are takeover targets for the digital Kings. Apple, Google, Amazon, Microsoft, Netflix, Facebook, and many others, will need content for streaming and it is the premium content, ie. major motion pictures, they will demand. And the best and most efficient way to get premium content is a buyout of a major media company.
The scenario, I've just laid out is inevitable. Movie exhibitors should prepare for it as the survivors will reap huge benefits. But at this stage in the game, not exhibiting films because of collapsing release windows (as Cinemark is doing) will gain nothing except lost revenue and less movie patrons in the future.
F/U to story: As of today, Universal has backed off of its position for the early VOD release of Tower Heist, but it is an omen of things to come. It's a shot across the bow - take heed exhibitors.
Cinema Needs A Comeback
Flat and crowded - that is what the world is becoming. By 2050 the United Nations estimates the world's population will exceed 9.8 billion from today's 6.8 billion headcount. The world is also becoming increasingly flat, as it emulates and pursues an "American lifestyle" becoming smaller as both the information and energy technology age develops.
The U.S. cinema is already flat in terms of box office grosses and decreasing in terms of admissions - but these trends can be reversed if distributors and exhibitors adopt a modern pragmatic and accommodating business relationship as both Hollywood and the exhibitors will need each other's support in the future. A much more streamlined movie entertainment community is in the works so that necessities change.
Cinedigm's Bragging Rights........Not Too Good.
Listed as a penny stock on the NASDAQ, Cinedigm (CIDM) current share price is $1.15 down 55% for its 52 week high of $2.60. After the Virtual Print Fee scheme, Cinedigm will have no value - in fact it has no value now. It lost 18 cents per share last quarter and is, in reality a puppet company for the studios which will dissolve next year.
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