WEEKLY CineBUZZ - 28 November 2011 (Revised)

Twilight's Stewart & Greene

GOBBLE! GOBBLE! GOBBLE!

Although they get a A for effort, the kiddie pics couldn't unseat Twilight from the head of the Thanksgiving table.  Nonetheless, there were no turkeys at the box office over the 5 day extended holiday weekend.

Twilight Breaking Dawn - Part 1(Summit) ended its second week with a total box office gross of $61 million.  It has now amassed $221 million domestically and $268 million internationally, not too shabby for a film with a $110 million production cost.
The Twilight saga is on warp speed to reach a franchise total $3 billion.  It will easily score another $1-2 billion in ancillary product and down-stream presentations - and there is still another installment (BD-Part 2) in the hopper for 2012.

The current cinema marquee boasts a cadre of good pics for all ages.  In addition to The Muppets (Disney), which grossed $41.5 million and took 2nd place to Twilight, and should have good legs throughout the pre-X-Mas period. Happy Feet Two (Warners) in its second week, took 3rd and grossed $18.4 million.  Arthur Christmas (Sony) came in 4th and grossed a rather disappointing $16.3 million.  5th place went to newbie Hugo (Paramount) at $15.4 million.
The U.S. cinema has now grossed a YTD total of $9.1 billion with 1.14 billion admissions.  This is in line with 2010's performance.
Sneaks - Do They Work?

War Horse Should Do Well

We Bought The Zoo (Fox) had a sneak preview over the weekend to mixed results but it may help when it debuts on 12/23 against some stiff competition: War Horse (Dreamworks), Alvin & The Chipmonks-ChipWrecked (Fox), and The Adventures of TinTin (Paramount) 3 good family flix.  We'll wait and see how the Zoo makes out.

Sequels -  We Love Them!

Sherlock Holmes #2 out 12/16

Hollywood is all about risk management. And to decrease risk sequels are the way to go. One good pic deserves a follow-up and if possible a 3rd, 4th, and more - until moviegoers tire of the premise.Some sequels are serial, ie. Harry Potter or Twilight, others are new stories with the same characters, like Mission Impossible (the 4th MI film to debut shortly) or Sherlock Holmes (in its 2nd plot).  Either way sequels make sense for the studios - as they limit risk in a very risky business.

Cheers.
Jim Lavorato

CUTTING THE CORD

Termed Cord Cutters, young adults have no intention of becoming $1000+ a year consumers (like their parents) of conventional cable or satellite TV subscriptions.

In conversation, DISH Network CEO, Charlie Ergen, stated that, "Young people who move into an apartment or starter home do not subscribe to any cable or satellite service.  They get their video over-the-top and their network programs from Hulu, Netflix, Roku, or Amazon.  Instead of paying $70-120, or more, per month they get it free or pay $7.99 per month from Netflix or $79 per year from Amazon.This is a long-term macro trend that is a threat to our industry."   Charlie you couldn't have said it any better.

Top 10 Cable Alternatives

Reuters even reported on a "Cord Cutting Holiday Gift Guide" - check it out at www.reuters.com .
 The coming cinema-TV-internet connection is going to be really messy but it is inevitable and unstoppable.


Cheers, Jim Lavorato

GOOGLE GOES HOLLYWOOD

Reported in a recent CMG post - "Disney & Google Team UP", 11/9/11 - Google has earmarked an "initial" $100 million as an incentive pool for storytellers and producers to submit original content which would fuel YouTube and Google's developing on-line TV channels.

Google wants to work directly with celebrities and Hollywood producers as it launches its on-line cable network and Google TV.  YouTube (owned by Google) has 96 shows currently in the works for its foray into webTV - from sports to pre-school childrens' fare.

My guess is that Apple, Amazon, Microsoft and others won't be far behind.  What these tech Kings are doing is training a mobile and global audience to consume premium content on smartphones, tablets, and ultrabooks, in addition to TVs and feeding this growing appetite with millions of views - from feature films to homemade videos.

Cinema owners/operators must be aware of these trends and set so work on adopting, need I say it again, the 5 cinema essentials: Value, Convenience, Quality, Participation, and Experience.

Cheers & Happy Movie Going!
Jim Lavorato

CHANGING THE 'SCRIPT'

Why do people congregate at Apple stores and shy away from Sony stores?

The difference is that Apple has created a store where shoppers can play and interact with all of Apple's products for however long they wish. In contract, at Sony stores the products are locked behind glass doors in a "look but don't touch" display.  Additionally, Apple stores are large and uncluttered, totally the opposite of the big box retailers, such as Best Buy.

Typical Apple Store Layout

In marketing lingo, Apple "changed the script" of electronic shopping and in so doing turned their retail stores into a multi-billion dollar business unrelated to what Apple does - the manufacture of high tech products.

A script is a set of shared rules that govern how we act.  Scripts are unwritten and unspoken, yet greatly influence our day-to-day behaviors. So, in the mundane routines of our lives, experiences that stand out are often those that change the existing script.

This redefinition of our behavior is exactly what is needed at cinemas: a re-scripting of how a typical cinema interacts with its customers.

Coke's New 100 Flavor Self-Servers

When consulting on re-scripting a cinema I key in on the elements from a moviegoers perspective.  For example, I am a big proponent of cinemas' concession being self-serve.  That would include popcorn, soda, candy, and peripheral items like hot dogs and pretzels.  Popcorn and soda purchases should include free refills, no matter the size (which would be two: Large and Extra Large). You will find that most people will not refill and 99% won't steal from the self-serve racks. Any loss from pilferage is more than offset from the substantial savings in staff time/costs. 

Allowing customers to participate in their concession purchase has the effect of increasing sales and builds good relations - you "trust" your customers.  It's their cinema.

At Panera all drinks are self-serve & refillable

I receive a lot of resistance from cinema clients on adopting self-service but it works and consumers are embracing it as more and more fast food outlets - from Burger King to Panera Bread have instituted it.

Self-service is but one change cinemas should adopt in re-scripting themselves.

WEEKLY CineBUZZ - 21 November 2011

Breaking "BIG" - Twilight Franchise Rocks The Box Office

The weekend U.S. box office top 10 movies amassed an awesome $215 million of which Twilight Breaking Dawn - Part 1 (Summit) broke big with 65% ($139 million) of the total and motored to a breath-taking worldwide take of $284 million.  The Twilight franchise is now on its way to accumulating a $3 billion box office.  Given this performance I thought a look at the chronology of a media/entertainment franchise, like Twilight, would be fun.

June 2003 - Stephenie Meyers has a dream about two people in the woods - an "average" girl and a boy who is "beautiful. sparkling, and a vampire." Meyer awakens from the dream and starts writing - calling the main characters "he" and "she" (later she named them Edward and Bella).
October 2005 - "Twilight"  (the first novel) is published and becomes a best selling book that year. Meyer's original dream is Chapter 13.
August 2006 - "New Moon" is published and hits #1 on the NY Times and USA Today best seller lists.
August 2007 - "Eclipse" is published, selling 150,000 copies within 24 hours of release.
December 2007 - Virtually unknown actor, Robert Pattinson is cast as Edward for the "Twilight" films.
July 2008 - "Breaking Dawn"  is published.  The "Twilight" novels become the top four selling books in 2008.
November 2008 - "Twilight", the movie is released grossing over $400 million domestically and $700 million worldwide.
March 2009 - "Twilight" is released on DVD, topping over $197 million in sales.
November 2009 - "New Moon" opens at cinemas, and grosses over $800 million worldwide.
June 2010 - "Eclipse" is released grossing over $30 million just is it midnight show debut.  It goes on to gross close to $1 billion worldwide.
November 2011 - "Breaking Dawn - Part 1" is released amassing $234 million worldwide in its weekend premier.
November 2012 - Tentative release date of the fifth (and final) movie in the saga, "Breaking Dawn - Part 2".

Speaking of Fun Things

Chinese Number One

2011 is called a Lucky or Money Year. First, because the number one appears so much. For example in dates: 1/1/11, 1/11/11, 11/1/11 etc.  Moreover, October contained five Sundays, five Mondays, and five Saturdays, an event that happens only once every 823 years and there are multiple months with five sets of three days.

Now, for those of you born before the year 2000, take the last two digits of the year you were born and add them to your age.  See what I mean!

Consumer Electronic Sales Tops $1 Trillion 2012

The Consumer Electronics Association predicts that worldwide sales of consumer tech products will increase 5% in 2012 and top the $1 trillion mark despite a challenging economy worldwide.  Citing life style changes in the way we receive information for communication, education, and entertainment as the driver for higher and higher sales, the CEA expects mobile devices (smartphones and tablets) as well as Ultrabooks to fuel sales growth.  Over 20,000 new consumer electronic products will be introduced next year on a global basis.

Cheers and Happy Movie Going!
Jim Lavorato

CMG's Predicts Gain Support

Cinema Mucho Gusto has predicted that streaming movie content will eventually lead to the day-and-date release of movies to all sources and devices with cinemas being one source.  Why? Because the numbers are so great that their sheer weight will force this mode of movie distribution and has the benefit of eliminating piracy.  To address this eventuality, cinemas (large and small) need to embrace CMG's five - cinema of the future - essentials: convenience, quality, value, participation, and experience.

Evidence to support this game changing prediction comes in the way entertainment content viewing is evolving.  To that point, the Nielsen Company, the best eyeball trackers in the business, just completed a study which showed that over the last three years the number of online viewers has grown by 26% - but the amount of time spent streaming content has more than doubled over the same period (see chart).

Streaming is becoming mainstream and, more importantly, becoming the preferred way to view on-demand movies, TV, and even live videos on both larger TV screens and on mobile devices.

Streaming will impact both the cinema and traditional TV viewing. Internet delivered content is now winning the - get the eyeballs game - and will continue to do so.  TVs will shortly be sized in terms of feet vs. inches -

Panasonic 12.5 ft. TV

currently an 84" (7 ft.) TV can now be bought for just over $2 grand. These larger TVs are made for movie viewing and video game playing - it's that simple.
Will cinemas exist in the future, of course; but (as we have said in this blog many times) to prosper they will need to change their business model and embrace CMG's five cinema essentials. It should be pointed out that movie exhibitors not look to the Hollywood studios for help in adapting.  For the media giants (that own the studios) will themselves be under intense pressure to adapt to a changing business landscape and some, if not all, will wind up with new owners.  Case in point: Comcast's purchase of NBC/Universal.

Cheers and Happy Movie Going!
Jim Lavorato

STUDIOS RETHINK 3D

Cinema Mucho Gusto coined the phrase "3D fatigue"  when I pointed out (over 3 years ago) that moviegoers would tire of the less than satisfactory 3D product Hollywood was releasing.  Other blogs and entertainment reporters echoed CMG's viewpoint, and now (finally) the studios are realizing their mistake in releasing movies in 3D that abused the format.
Going forward, 3D releases will be decreasing - at least - over the next several years.  This year there will be about 40 3D releases.  According to what the studios are now forecasting, that number will be decreasing by 25% in 2012 to 30 3D releases and to only 15-20 releases in 2013.
"People are feeling burned", states Jeff Bock, box office analyst at Exhibitor Relations (a firm that tracks trends of Theatre Owners) "and all the studios are pulling back on 3D."
This anticipated decline in 3D movies marks a sea-change in how the industry views the 3D technology.  3D was the tail wagging the dog. The studios thought that if you slapped 3D on a movie, presto, you have a hit - they were wrong (of course, this is nothing new, one just has to look at the Digital-cinema fiasco for unbridled stupidity).

The studios are finally learning that they need to be judicious with the use of 3D (and digital) technology. The industry - both distributors and exhibitors - continue to struggle with investments that offer diminishing or no returns.  For example, 3D admissions once totalled 60% or more of a movie's box office take, now the 3D take is less than 40%.  Several studios have even begun advertising that the films are available in "glasses free 2D".

Yes, 3D to 2D conversion

If you look at what works, its the selective 3D - a classic movie like The Lion King - but not every mediocre action pic that comes down the pike and certainly not 3D from 2D conversions.

Readers of this blog know I want the cinema industry to thrive and prosper. To do so emphasis and investment should be placed on improving the movie going experience and not on investments in expensive, non-productive, non-revenue generating digital projection equipment!

Cheers and Happy Movie Going!
Jim Lavorato

TRADE BARRIERS & PIRACY OF U.S. MOVIES

The American motion picture industry not only entertains people in over 140 countries but supports businesses in those countries in the distribution and exhibition of movies - generating billions of dollars in revenue and returning a positive balance of trade in every country in which American films are exhibited.

However, even with these significant benefits, many countries continue to construct trade barriers to limit or even ban the exhibition and/or allow the piracy of  U.S. movies.

It may come as a surprise to find that a number of these trade violating countries are considered to be friendly neighbors to the U.S. Many countries enact restrictive barriers to U.S. film imports in the name of internal cultural protection, but are really intended to ban U.S. movies and essentially violate existing free trade agreements. The worst six that impose restrictive trade barriers and/or do not enforce piracy laws are the following:

Canada - yes, believe it or not, Canada does not have legislation that provides protection for copyright holders.  As such, Canada has become a major locale for illicit websites and a safe haven for Internet pirates.  Canada needs to bolster and re-write its Copyright legislation.

China - no surprise here. China has the most restrictive laws banning U.S. movies and is also one of the worst offenders of copyright infringement and piracy.

Indonesia - which just recently instituted a number of trade barriers against U.S. movies which, if enacted, would essentially ban U.S. motion pictures in the Indonesian market.

Italy - has rampant piracy problems. Italy has one of the highest online piracy rates in the world and the Italian government has done nothing to control this problem.

Mexico - is one of the worst offenders of piracy and is the leader in illegally recorded movies in theatres, which impacts the market throughout Latin America.  The Mexican government does not seem interested in addressing this problem.

Russia - while making some progress in combating Internet piracy over the last several years the practice is still rampant.  Unfortunately, the Russian authorities do not actively enforce its treaties and laws regarding Internet abuse.

IMPACT OF U.S. ECONOMY

The production and distribution of motion pictures and television programs is one of the country's most valuable cultural and economic resources. The media/entertainment industry employs over 2.2 million people and generates over $137 billion in wages.   The industry is comprised of over 95,000 businesses located in every state in the nation and currently contributes over $15 billion in tax revenues.  

Motion picture and TV production is a significant and vital economic force for the U.S. and we should endeavor to support and protect this industry both at home and abroad.

Cheers and Happy Movie Going!
Jim Lavorato

WEEKLY CineBUZZ REPORT - 14 November 2011

HOLLYWOOD'S X-MAS GIFT

With 50+ releases scheduled over the next 10 weeks, Hollywood is definitely not playing the Grinch this holiday season.

The season really starts next week, with Bella's birth of a half-vampire baby in Twilight Breaking Dawn - Part 1 (Summit) and Happy Feet Two (Warner-3D) and the festivities continue with a movie-for-everyone at the local cinemas.   The must-see list includes:

November 23rd - Arthur Christmas (Sony-3D)
                             Hugo (Paramount-3D)
                             The Muppets (Disney)
                        

December 2nd - Answers to Nothing (Roadside)
                           Sleeping Beauty (IFC Films)

December 9th - I Melt With You (Magnolia)
                          The Sitter (Fox)
                          Tinker, Tailor, Soldier, Spy (Focus)
                          Young Adult (Paramount)
                          New Year's Eve (Warners/New Line)

December 16th - Alvin & The Chipmunks -ChipWrecked (Fox)
                            Mission Impossible-Ghost Protocol (Paramount)
                            Sherlock Holmes (Warners)

December 21st - The Adventures of TinTin (Paramount-3D)
                            The Girl With The Dragon Tattoo (Sony)
                            Albert Nobbs (Roadside)

December 23rd - Who Bought The Zoo (Fox)

December 25th - The Darkest Hour (Summit-3D)
                            War Horse (Disney/Dreamworks)

December 30th - The Iron Lady (Weinstein)

January 6th - The Devil Inside (Paramount)
                       Roadie (Magnolia)
                       Red Tails (Fox)

January 13th - Beauty & The Beast (Disney-3D)
                        Joyful Noise (Warners)

January 20th - Haywire (Relativity)
                        Underworld Awakening (Sony-3D)

January 27th - One For The Money (Lionsgate)
                        The Grey (Open Road)

                       
AND THE WINNER IS!

Feb. 26th is Oscar night. Originally scheduled to host the
gala was Eddie Murphy, who has now been replaced
with Billy Crystal - the go-to guy whenever there seems to be a hosting controversy. It seems Eddie made some off-hand remarks about gays.  Eddie would have made a much better host -funnier with much better ad-libing. Billy will most likely gravitate to his old schtick complete with Jack Benny - "I get it" smile.

Early predictions for the only worth watching awards - best pic, actors, and director - have the odds-on favorite contenders as:

Best Pic
The Artist
The Descendants
War Horse
Hugo
Moneyball

Best Actor
Clooney - The Descendants
Pitt - Moneyball
DiCaprio - J. Edgar
Dujardin - The Artist
Oldman - Tinket, Tailor

Best Actress
Close - Albert Nobbs
Davis - The Help
Streep - The Iron Lady
Theron - Young Adult
Dunst - Melancholia

Best Director
Hazanavicius - The Artist
Payne - The Descendants
Spielberg - War Horse
Allen - Midnight in Paris
Scorsese - Hugo

Best and Happy Movie Going !
Jim Lavorato

Disney and Google Team Up

The Disney Company and Google, owner of YouTube, have formed a partnership whereby Disney will produce original videos which will be distributed on a co-branded channel on Disney.com and YouTube.  The channel will also include amateur videos from the thousands uploaded to YouTube on a daily basis.

Swampy and Friends in "Where's My Water?

Disney is aware that its own brand is not powerful enough to draw children (the partnerships main target audience) so in a reversal of its previous go-it-alone web strategy, Disney needs to partner with YouTube.  James Pitaro, Co-President of Disney Interactive, stated, "it's imperative to go where our audience is, we need to bring Disney's legacy of storytelling to a new generation of families on the platform they prefer."  The Disney website has been losing money - over $300 million in the last 12 months as traffic to its site decreased by 5.2 million visits in just the June to September period. - so
Disney management is acutely aware that it needs to create content that can be monetized quickly.

For YouTube, the benefit is to use the Disney brand to gain credibility in offering prime, professionally produced content which can compete with cable TV for ad dollars.  Teaming with a Hollywood studio advances that goal. Google's plan is to create dozens of web channels featuring comedians, sports stars, musicians, and other entertainers.  It is also offering cash advances to prospective producers that total more than $100 million, as Google believes the Internet is the third phase of the television business competing with network and cable TV.

Under the terms of the Disney/YouTube deal, Disney will produce the web videos series, the first of which will be "Where's My Water ?", featuring an alligator named Swampy. The goal is to have eight original series in production at any given time.

WEEKLY CineBUZZ REPORT - 1 November 2011

BOX TOPS

A Nor'easter, Halloween, and the World Series all took their toll on what otherwise would have been a blow-out box office last week.  Even with these headwinds, however, the top ten still managed to amass a $88 million+ domestic take, and left Puss in Boots (Dreamworks), In Time (Fox), and The Rum Diary (FilmDistrict)

last week's openers, a second chance at the gold ring.
After Puss in Boots, which took top honors, Paranormal Activity 3 scored second with In Time taking 3rd with $12.1 million.  Footloose (Paramount) in its 3rd week of release came in 4th and has now grossed over $38 million.
The Rum Diary came in a disappointing 5th with $5.1 million.

Adding Tower Heist (Universal) and A Very Harold & Kumar 3D Christmas (Warners) to the upcoming roster, this weekend should see  summer-like box office grosses.
The U.S. box office has now grossed $8.4 billion YTD with 1.06 billion admissions - still behind 2010 results.  I don't think ticket sales will catch up but dollar gross could easily surpass last year given the strong upcoming release schedule and last year's, not too stellar, holiday box office.

A quick look at the international box office saw Paranormal Activity 3 pull in $22.3 million and take first place last week. And Despicable Me, 3 months after its debut, came in 2nd and has now amassed over $200 million internationally and over $450 million worldwide.

Cheers and Happy Movie Going!
Jim Lavorato