HOLIDAY GREETINGS & ADVICE from CMG

Fight For Your Right To Party

Happy Holidays Everyone!  Taking a page out of Lindsay Lohan's party etiquette book may not be appropriate but I thought, what the hay, I'll gift a little wisdom to go along with my holiday greeting - you guys deserve it.

Now, I know, many of you will be celebrating and partaking in festivities that include attending parties which can breed temptation and misbehavior.  Not to worry, because this year CMG is providing you a Gentleman's (Woman's) Guide to Party & Self-Behavior, whether at a home or office holiday gathering.

1. Stay Away From Drunks - You of course, remain above the fray, but you may be confronted with inebriated friends, family, or acquaintances.
Best: remove yourself from their presence. Use the tried and true,"Oh, I hear my phone's ring tone. It must be Santa calling". Particularly in a business setting being "seen" with a drunk is never good for career advancement.

2. Kiss Up - Here's your opportunity to put a face to all of your memos, emails, and tweets - go for it!  A quick suck-up can go a long way in cementing your relationship with a higher up.  Have a game plan. Know before the party starts who your targets will be. Happy hunting.

3. No One Likes A Kill-Joy - Be sure not to gossip, gripe, or air your frustrations (business or personal - we all have them).  I know it can be difficult but you must demonstrate that upbeat and "can do" spirit. Here's where taking that Drama class finally comes in handy.  Complaining is natural to you, so fighting the urge to expunge may take some doing. Practice at being positive and remember, never philosophize or moralize - these are real downers.

4. Keep It Light - Small talk is the rule. Upcoming vacation, holiday plans, light-hearted topics are best. Stay away from politics, religion, and personal issues - no one cares anyway and you'll be cast as an opinionated and bigoted zealot.

5. Lay On The Charm - Your boss's significant other (and overseer) is numero uno on your charm list.  Give them special attention but don't over do it.  Strike up a conversation. Stay cool and don't spill your drink on them, and don't eat while your talking.

6. Watch What You Wear - Cleavage is touchy. Go with it or conceal? Best- reveal but tastefully.  Experiment with colors, never wear all black.  Go with bright colors or color accents - you want to be remembered but in a good way.  Worst mistake: the strapless dress. You look naked to the people sitting across from you at the table.

For you men-folk, What can I say - go with a more-than-normal (for you) festive look and never, never wear a Reindeer sweater or Santa hat.

7. Prep Your Party Partner - Even the best of back-slappers can be undermined by a drunk or obnoxious partner.  Prep your partner before hand.  Share info on the pecking order.  If a female, inform her of the cleavage rules, if male enforce the two punch bowl visit limit.  Tell them to smile and nod.  They are your surrogate and their behavior reflects on you.  Best: skip the partner and soldier-on solo.

8. Beware The Sweaty Right Hand - Parties and handshakes go - dare I say it - hand-in-hand.  You will be shaking a lot of hands.  Go easy.  Refrain from bear-hugs and don't go too Euro on the cheek kissing. Keep drinks or other objects in the left hand, a sweaty or wet shake is always frowned upon.  Have Purell at the ready, use it discreetly but often.

9. Show Appreciation - Thank the hosts before leaving even if you had a miserable time.  It's not their fault, given current economic conditions, that party expenditures have been pared.  Beer v. vodka, ChexMix v.canapes, spinach dip v. caviar, its all a sign of the times.  Show appreciation for the effort if not the substance.

10. The Follow-up - This is why you went in the first place.  Schmoozing, intro'ing yourself to the office hottie, making that cool but critical impression, cementing the connection.  Follow up with a short email and suggest a lunch or coffee date.

Merry Christmas and Happy New Year!
Jim

Future Bright For Video-on-Demand, Says CEO Benya

In Web-chat Bob Benya, CEO of In Demand - the pay-per-view and video-on-demand content distributor - talks about his company and what the future holds.

For 2011, In Demand generated $1.3 billion in revenue and down-loaded approximately 175 million on-demand movie buys.

Bob Benya

What does 2012 look like for In Demand, Bob?

We're doing a lot of things with the release windows and trying to get more and more movies.  We're also trying to give customers a 48 hour rental window and doing a lot of packaging.  Having the customer purchase 3 or 4 movies at once at a lower price per movie.

In Demand had a very good year, what was that performance based on?

One, was to get day-and-date releases with DVD releases, which is now virtually 100%. Second, increasing the number of titles available for 48 hour rental. Third, is the Netflix hold-back, and we've been talking with the studios about extending Netflix's and other streamers hold-back. And finally, the continued expansion of acquiring independent films to fuel the VOD platform.  We are now working with over 50 independent film studios.  We've seen a substantial increase in the overall independent film business, and we are getting these titles the same day as theatrical release.

What's the future look like?

In Demand will be getting a lot broader and deeper on price testing and really looking at it in a much more sophisticated way.  I think the studios are definitely interested in optimizing their return on investment for movies, and I think they are going to release product earlier.  The other issue, we are big-time in favor of, is the studios offering 10 minute previews of movies to allow viewers an opportunity to watch before purchase - it's really good for our business.

Thanks Bob.

In Demand is owned by Comcast Inc., Cox Communications, and Time Warner.

Cheers,
Jim Lavorato

GAMING CONSOLES MOST POPULAR FOR MOVIES

Nielsen Company, the pre-eminent media eyeball counter, reported last Wednesday that consumers are increasingly using their gaming consoles - Xbox, Wii, and PS-3 - for streaming movies and TV shows.

Gaming consoles readily connect to the Internet so they are used to access VOD services like Netflix, Hulu, YouTube, and other streamers including ESPN and the Major League Baseball Network for sports.
Nielson found that gaming consoles and AppleTV were the most popular ways people chose to view movies on their HD-TVs. Proven to be very effective in accessing Netflix, Nielson found that half of Netflix users utilize streaming from game consoles.

Streaming video accounted for 14% of the average time spent using the X-box, for the PS-3 it was 15%, but for the Wii 33% of owners spent their time streaming movies or TV content.

Both Xbox and Sony's PS-3 consoles are also popular as DVD players with the PS-3 capable of playing BluRay discs. Sony last week stated it would exceed its forecasted sales of PS-3 and expects to sell 1.5 million of the consoles in fiscal 2011. 

Cheers,
Jim Lavorato

SILICON vs. CELLULOID



Tech Kings Fight Back

As anticipated, the battle between the silicon valley Kings and the celluloid Moguls has begun - and somewhat sooner then even I expected.

In their effort to block anti-piracy legislation, Internet companies, including Google, Facebook, Amazon, and even Bloomberg are lobbying Washington hard saying that the Hollywood backed piracy measures - to curb trafficking of illegally copied music and movies - would amount to on-line censorship.

The legislation, as proposed, would allow the Justice Dept. to seek court orders requiring Internet service providers, search engines, payment services, and advertising networks to block or cease business with non-U.S. websites linked to piracy.

Anti-piracy poster

For its part, Hollywood has been waging its own rigorous campaign. For example, last week a delegation led by the Motion Picture Assoc. of America and consisting of executives from Fox, Warner Bros., and others descended on Washington, D.C. for meetings with members of the House Judiciary Committee, V.P. Joe Biden, White House Chief of Staff, Bill Daley, and Valerie Jarrett, a senior advisor to President Obama.  They reject the tech companies' accusation that the proposed legislation amounts to on-line censorship.

The Web honchos, however, say that the anti-piracy laws would require them to police the Internet and "threaten the growth of the U.S. technology industry".  To bolster their case they are also flexing their political muscle. Google and Facebook have increase their spending and presence in Washington to cope - not only with the pending on-line piracy legislation but consumer privacy and antitrust issues as well.  Google has hired 19 new lobbying firms this year alone, and Facebook just added two new lobbyists to its army.

The tech firms are pushing for alternative legislation that would make the U.S. Intl' Trade Commission versus the Justice Dept. the major arbiter of piracy issues.  The U.S. ITC has the power to block the import of products found to infringe on intellectual property rights. In a statement, the Consumer Electronics Association,  asserted "the alternative would provide effective remedies without creating new liabilities for lawful, U.S. technology companies."

As of now, an amendment the the House and Senate bills has been added which calls for an "inter-agency study on the legislation's impact on the Internet."  So, for now, there is a truce putting the battle on hold, allowing the opposing groups time to re-arm.

My Take

First, U.S. anti-piracy laws have no clout overseas and are not enforceable. And second, Hollywood is fighting the last battle, as the only way to stop piracy is to release movies day-and-date across the entire world accessible to all projection and mobile devices simultaneously. And we will reach that point in the future.

Best and Happy Movie Going!
Jim Lavorato

VENDING MACHINES THAT KNOW YOU

Better Than Humans For Customer Recognition

If you read CMG with any regularity you know that I am a big proponent of self-serve concession at cinemas. So, the next stage in the development of vending machines (which, I might add, have recently made huge in-roads in regards to customer interface) is of great interest to me.

Face Recognition Improves Sales

A new concept vending machine developed by Sanden Corp., in cooperation with Okaya Electronics and Intel incorporates a 65" full HD display with a "transparent" touch screen.  The display can show custom graphics, product & merchandizing information, and functions as a large clock when not being used.

Human Inter"face" Literally

The major development however, is that this vending machine offers facial recognition so it can display customized menus based on an individual's prior use.  And, if it doesn't recognize the face, it will display products based upon what it THINKS the customer would want - performing a quick profile based upon age and gender.

Although not currently being sold, this is the cinema "concession sales clerk" of the future. 

Cheers & Happy Movie Going!
Jim Lavorato

EXHIBITORS BATTLE OVER A SHRINKING PIE



In Legal Battle Over "Circuit Dealing"

As I mouse around very nook and cranny of the cinema industry I sometimes come across befuddling situations that defy logic. Case in point: the lawsuit between independent theatre owners of Palme d'Or Cinemas  and the Cinemark Group.

A few years ago, a group of independent theatre owners upgraded a rundown 7plex in Palm Desert, CA into a modern cinema complete with French cafe and named it Palme d'Or, after the Cannes fest award. Their dream was to have the Theatre be "the desert's premiere address for cinephiles" exhibiting a selection of art house, specialty, and foreign films.  But the owners weren't just any old film buffs, but included: Bryan Cranston, star of TV and movies, and Emmy winning actor of "Breaking Bad" and "Malcolm in the Middle"; Hollywood producer Alise Benjamin, who among others co-produced the Oscar winning film "Ray"; and Steve Mason, nationally known ESPN talk-show host

Palme d'Or Cinema

They are now in a legal battle against Cinemark, the third largest U.S. theatre chain, claiming that Cinemark along  with the studios illegally restrained trade by not allowing the Palme d'Or to play certain films. The suit, initially dismissed in a Los Angeles civil court, was recently reinstated by the California Appellate Court.

"It's like they're Starbucks and we're a small coffee house and they're preventing us from getting coffee beans", states Cranston, from Toronto where he is on set for the film Total Recall. "We're fighting for our existence."  It is expected that the industry's top studio distribution honchos will be called to testify about their behind-the-scenes Hollywood release practices.

The Palme d'Or owners realized how unfair release practices were when they had to fight with Universal Pictures to get a print of "Ray" even when one of the owners co-produced the movie.

For their part, Cinemark, in a statement said, "the Court of Appeal's ruling was flawed and flies in the face of established modern antitrust law" and it would appeal to the California Supreme Court if necessary.  The suit claims Cinemark engages in "circuit dealing" - where large chains leverage their size and buying power to pressure distributors from booking movies in small theatres. Circuit dealing was outlawed in 1948 by a U.S. Supreme Court ruling.

Here's my take:

Exhibitors have little market power as it is and as competition via the Internet intensifies - and it will - the large cinema chains burdened with heavy overheads and fixed costs will become more desperate.  I envision the large chains getting smaller over the next decade as the cinema business model changes to one where large corporate structures cannot be supported.  Exhibitors should stop fighting between themselves and get down to the real task at hand in changing their entire business model and embracing CMG's five cinema essentials: value, quality, experience, participation, and convenience.

Best and Happy Movie Going!
Jim Lavorato

'HUNGER GAMES' PUZZLE HUNT- Get Started!

CMG Has Piece of the Puzzle

To promo "The Hunger Games" movie franchise, Lionsgate is conducting an on-line jigsaw puzzle hunt.  The one-sheet (cinema lingo for a movie poster) for "Hunger" has been cut into 100 jigsaw pieces.  When the first person to amass and solve the puzzle (and posts it to the "Hunger Games" Facebook page) the poster will be released - and the winner given a prize.

The puzzle pieces are being made available in the greater digital domain. So, if you have a lot of time and are a "Hunger" crazy you can start collecting by emailing me. That's right, Cinema Mucho Gusto has the #40 piece which I will gladly email to you upon request. I'm waiting.

Best & Happy Movie Going!
Jim Lavorato

WEEKLY CineBUZZ - 13 December 2011

BOX TOP

I know I said box office action tends to slow the weeks before Santa arrives but last week was a total box office bust - and I remain somewhat skeptical about this week's.  Hopefully, new releases: Alvin & The Chipmunks: Chipwrecked (Fox) and Sherlock Holmes: A Game of Shadows (Warners) will provide the elixir to get ornery moviegoers out of their lackadaisical, no mas movies, state of mind.

At numbero uno was star-studded (really ?) New Year's Eve (Warners) which struggled mightily to get into the teens ($s millions) as box office attendants sat lonely and dreamily at their talk-thrus.  New Year's take was just $13 million and richly received an instantaneous Twitter "no go" from under-struck viewers.

Number 2 was The Sitter (Fox) which garnered a measly $9.8 million (production cost: $55 mil.). Jonah Hill isn't funny - period!  The Sitter is a sea-of-sameness and now that Hill has lost a ton a weight (needs more loss) are we destined to see him in romantic roles?  Please Hollywood, for all that is holy, say NO!

At 3rd was deep-keeled Twilight (Summit) which is the gift that keeps on giving - totaling a domestic b.o. of $260 mil. and a jaw-dropping $633 mil. worldwide.  Without Twilight Nov./Dec. b.o. would have been a no-show and we need a replacement(s) for it.

In 4th was The Muppets (Disney) which came in just a tad under $7 mil.  Although grossing over $66 mil. thus far (grossing next to nothing in the overseas markets) and a production cost of $80 mil. - Disney is counting on strong DVD/VOD sales.   In 5th came Arthur Christmas (Sony) at $6.5 mil.

Lately a trip to the cinema has become much like a visit to a rummage sale. Picking through the junk in the hopes of finding a treasure (or just a nice memento).

Margin-to-Mainstream
Unless you're taking survival lessons from Ted (Uni-bomber) Kazinski, you are probably aware of .xxx - the new Internet designation to be used by porn sites.  Well, doesn't this monumental development - the removal of the last fig leaf (digitally and figuratively) - beg the question (which is at the top of all movie lovers' minds): is .xxx good or bad for the cinema? 

Who Knows? Anyone for Saketinis?

Cheers and Happy Movie Going!
Jim Lavorato

GOING TO THE MOVIES - BUT WHERE?

Are Concessions Too High?

Affordability should be the new mantra for cinemas.  Americans are finding it harder and harder to justify a trip to the "movies" given other options on how to spend their "viewing" time and money.  And cinemas aren't the only ones, cable/satellite TV subscriptions are in a downward trajectory as well (see post - "Cutting The Cord", Nov. 27, '11).

Sales in most markets is a zero sum game. So, how do cinemas give their current and potential customers a clear and compelling reason to continue their patronage?  Consumers are beginning to perceive the cinema as just another "place" to view a movie - and not necessarily "the place". High admission and concession pricing, (not to mention aging buildings and infrastructure)  force the perception that cinemas are "not giving best value for cost".

Most cinemas don't sell on perceived value because they haven't taken the time to define it.  They don't understand it. So how could they possibly relay this to customers?  They can not.  When competition increases, weaker (less valued) companies lose market share and this is what is happening at U.S. cinemas.
The music industry should be a great cautionary tale for the cinema.  Cinemas need to get ahead of what they will be competing against in the future.  The tech Kings, such as Apple, Amazon, Google, Microsoft and many others have already entered the media and cinema industries.  These tech giants are in the business of disruption and they are going to have a profound impact on the cinema.
There are essentially two ways of building a business.  One is to work very hard at convincing customers to pay high margins for your product or service; the other, is to work very hard to offer customers low margins - both work.  Cinemas, by their nature are in the second camp but are currently operating as though they were in the first.

A perfect illustration of this is: www.studios.amazon.com . What this represents is Amazon's new way of making movies!  How it works is that Amazon crowdsources (sourcing tasks normally performed by specific individuals to a group of people (crowd) through open call) the production of a "test movie" until it reaches the point where a real studio takes over.  Warner Bros. has a first-look agreement with Amazon.  Whether or not this concept of movie making will fly is anyone's guess - but Amazon certainly thinks it will, and Amazon is all about low margin.  More importantly, it gets Amazon's nose under the movie content tent and all of the complications this presents to the current modus operandi of the cinema industry - and the studios are powerless to stop it.

I believe anyone in the cinema industry is blind if they do not recognize the toll that higher admission and concession pricing and the disruptive nature of the digital domain is manifesting on the cinema. If you are a cinema owner/operator and are not in conversation and not sensitized to these realities in the business decisions you are making - you will probably not survive in the cinema industry of the future.
Cheers,
Jim Lavorato
Cinema/Media Consultant

GETTING AHEAD OF THE TECH CURVE

CINEMA SHOULD EMBRACE MOBILE PAYMENTS

It's On The Way

The trend of consumers paying at retail site via their smartphones will really start to pick up in 2012. Discussed in prior posts (see Weekly CineBuzz - October 5th, Ten Years After - July 10th, and Moola Report - June 19th) mobile payments will become very popular.

Near-field communication (or NFC) is the technology powering mobile payments via smartphones but it will soon trickle down to other devices, and this is not just me talking.  In-Stat, the top-notch media research firm, is predicting that NFC chip production "will reach 1.2 billion by 2015".

Google is using NFC for its Google Wallet mobile payment system and eBay, through its subsidiary PayPal (which at present focuses on payments via mobile apps, credit cards, and phone numbers) will also be using NFC technology in the future. In fact, virtually all mobile devices will carry the NFC chip.

Cinemas Need This Now!

Next year, you'll be seeing major retailers launching marketing programs that integrate "smart payment posters" into their in-store, web, social network, print, and out-door advertising which will feature the use of mobile payment.

Cinemas should get ahead of this technology and adopt its use NOW!

Cheers and Happy Movie Going
Jim Lavorato

WEEKLY CineBUZZ - 5 December 2011

BOX TOPS

Twilight, still strong

Traffic at cinemas normally slows down the weeks before Christmas and although there were 20 (by my count) new debuts this weekend, none had wide release, providing an opportunity for current marquee names. Hugo (Paramount) and Arthur Christmas (Sony), which didn't post very well on their openings last week were given a second chance.  However, it was not to be, as the weekend box office was a repeat of the last, as Twilight (Summit) took top honors for the 3rd week running with a gross of $16.9 million (it has now grossed over one-half billion worldwide) and The Muppets (Disney)  came in #2 for the 2nd week in a row with $11.2 million.

Rounding out the top five were: Hugo taking in $7.6 million, this movie has been a big disappoint, Arthur Christmas (Sony) at $7.4 million, and Happy Feet Two (Warners) at $6.0 million.  Besides, Twilight, the biggest grosser over the last month was Puss in Boots (Paramount) which came in 9th over the weekend. In its  6th week of release, Puss has raked in over $139 million domestically and $228 worldwide.

Even with the stellar performance of Twilight, November's box office was down year-over-year.  Total domestic gross was $863 million or about 4% below 2010's performance and 13% below 2009s level - this in light of much higher admission pricing.  It will become harder and harder in the U.S. to get consumers to the cinema and my rant continues regarding the re-scripting of the cinema business model.

One movie I wanted to comment on was Shame (Fox) which generated uber  buzz and kudos at film fests (Fox purchased it at the Telluride Fest) and got loads of critical acclaim.  Shame -  a 99 minute biopic written/directed by Steve McQueen (no relation to "the" Steve McQueen) - mustered a pretty respectable $362,000 in it debut release at 10 locations over the weekend. Really very good for an NC-17 rated pic.

McQueen - whose cinema forte includes holding ultra long camera shots, giving actors free-range, and using extreme closeups - is the " nouveau" filmmaker to some cine-aficionados.  Problems is, they are the only believers.  Trying to gain cine-cred as the new Fellini is fine but not by being touted as such by a cadre of entertainment rags, blogs, and websters. The film should speak for itself.  Showgirls, the all time high NC-17 grosser at $20.4 million, puts Shame to shame. Fact is, at its current pace Shame won't even make it into the NC-17 top 10.
Shame's premise centers around a thirty-something guy living in NYC who likes getting laid - Surprise! Yes, I know, he's suppose to be addicted to sex but that's pretty much it for the film. Anyone for The Muppets?

DISNEY BRAND NEEDS A REFRESH

Mouse Club No Longer Relevant

The Disney brand ain't what it use to be.  Boomers grew up with Disney from the weekly Disney TV show and The Mouseketeers to the opening of Disney Land and Disney World complete with futurist Epcot Center -  it was all part of greater America.  However, younger Americans don't have that affinity and view Disney as, well, old and stodgy.

Disneys' Aulani Resort, Oahu, Hawaii

Case in point: After five years of pushing its plan to develop a stand-alone hotel/resort and retail center Disney, last week, announced it has scrapped plans on the Disney-branded Potomac River complex near Washington, DC. This, coming on the heels of Disney's newly constructed hotel/timeshare in Oahu - The Aulani - which opened in August at a cost of $850 million and ran into some unintended financial miscalculations. It seems Disney management underestimated the operating costs of the resort and will now be forced to subsidize early time-share buyers for the next 50 years.

In addition to the Hawaiian fiasco, two new cruise ships and park expansions have ballooned Disney's capital budget to over $3 billion for 2012, so putting the kibosh on the Washington project was necessary.

Disney to build Avatar Lands

And other deals are coming up. The main one being the Shanghai - Disney Land project which carries a price tag of $4.4 billion. Also Disney recently acquired the theme park rights to the Avatar film franchise.  As party to that deal, Disney is required to build Avatar-themed "lands" at multiple parks around the world - beginning with a $500 million investment at the Animal Kingdom in Walt Disney World, Florida.
Disney can no longer rely on it brand for instant success, especially as it expands away from its core businesses of movie making and theme parks. The Disney brand needs a refresh but that takes investment in innovative projects that were the initial spark that made Disney so special. Investing in commonplace upscale stand-alone resort hotels is not the answer and I think Disney management knows this - at least now they do.

FEDS BUST PIRATE WEBSITES

Millions of Chinese work in pirated media trade

On Cyber Monday, Federal ICE & FBI agents seized the domain names and shutdown 150  websites selling counterfeit products and pirated movies & TV shows. Although registered in the U.S. the bogus websites were being managed from abroad - primarily from China. Although impossible to prosecute most offenders, five people in Virginia were arrested and indicted.
Constant vigilance is required  as these bogus sites siphon off revenue and jobs from the movie industry.

Cheers and Happy Movie Going!
Jim Lavorato

ADS JUST FOR YOU - Customized Commercials

GETTING YOU TO WATCH COMMERCIALS

Sitting in a movie theatre yesterday and watching the pre-feature ads -which I had seen before and pretty much mentally blocked out - begs an answer to the age old issue of how to get viewers to watch ads?

Problem: Viewers hate commercials.

Solution: Let viewers choose the ads they watch.

Can we pretty much agree that viewers hate commercials.  Yet the business models of broadcasters and webcasters alike depend on ad revenue for their
very being.  However, this is about to change!

Both Hulu and YouTube are experimenting with formats that give users the option of clicking an "ad swap button" and replacing the commercial they are watching.  Not only swapping but once the webcasters get enough profile data on which ads a viewer likes they will be given choices that are of interest to them. 

Icons on a Hulu screen allow for "ad swapping"

On the flip side, advertisers will have options as well. For example, giving viewers a choice at the beginning of a show to endure 2-3 minutes of ads and then be ad free. Another format offers the option of playing a trivia quiz or puzzle, sponsored by the advertiser, in order to earn a commercial-free viewing.

YouTube offers "skippable ads", where users are allowed to end the ad after five seconds, and no replacement follows, the program simply resumes. Under this format, the advertiser is charged only when users have chosen to watch the ad.  Advertisers like this, as they are assured that viewers who stuck around to watch the ad did so by choice.

Related "ad swap" options from a single company

Of course, webcasters have the option of going ad-free and turning to a subscription based model.  Hmmm, isn't that what the cable companies promised back in the eighties.

Whichever model is used, I am sure that individualized advertising will be in all of our futures.  Collecting data on what we purchase, where, and how and customizing ads around our "digital' profile is inevitable.

Best & Happy Shopping
Jim Lavorato