HAPPY NEW YEAR !

Yes, another new year has arrived. A new year - a new day - a fresh start. Time for a change?  About 45% of Americans make a New Year's resolution, but only 8% keep them.  Women are 10% more likely to succeed in keeping their resolutions than men.

And, 47% of all resolutions target self-improvement.

The Top 10 Resolutions for 2013 are:
-Drink Less Alcohol
-Eat Healthy Food
-Get a Better Job
-Lose Weight/Get Fit
-Manage Stress
-Quit Smoking
-Reuse,Recycle,Reduce
-Save Money/Manage Debt
-Take A Trip
-Volunteer Time to Help Others

Moviegoers have voted.  The 10 Most Overlooked Films of 2012 were:
-Being Flynn
-Hello I Must Be Going
-Jeff Who Lives At Home
-Haywire
-ParaNorman
-Lawless
-Save The Date
-Sever Psychopaths
-Goon
-2 Days In New York

The 10 Most Disappointing Films of 2012:
-Dark Shadows
-Prometheus
-The Watch
-Brave
-Savages
-John Carter
-Flight
-Looper
-The Bourne Legacy
-Les Miserables

Best Wishes for a Great New Year!
Jim Lavorato

2012 SETS RECORD BOXOFFICE

2012 was the highest grossing year for movies on record, and ticket sales actually increased - which has not occurred since 2009! The U.S. box office grossed over $10.8 billion, a 6% increase over 2011, with admissions up 5% at 1.3 billion.

Not surprising, CMG predicted a stellar summer and winter box office, but the fall grosses also held up as good film product was steady and kept moviegoers coming.

Can 2013 equal or exceed 2012 ?  CMG believes so, for two reasons: people are looking to escape and the product roster looks great.

There will be a new Star Trek, Superman, The Hobbit-Part II, and Iron Man 3. There will be a new Thor, Fast & Furious 6, Hangover III, Hunger Games II, and lots more. Not to mention a plethora of  alternative content that will become more and more accessible as digital cinema becomes the norm.  2013 will be killer for the box office.

What do you think? Let us have your thoughts and comments.

Best and Happy Movie Going!
Jim Lavorato

KODAK - FINALIZES SALE OF PATENTS

In CMG's continuing coverage of the Kodak story, last week showed a way out and new life for the 'old gal'.

On Wednesday, Kodak agreed to sell and license its digital imaging patents for $525 million.  A consortium organized by Intellectual Ventures Management, LLC, and RPX Corp. were the purchasers.  The Bankruptcy Court must approve the transaction but once approved will lead the way to Kodak's emergence for Chapter 11 bankruptcy which it entered into in January of this year.

The funds provide for exit financing and resolution of U.S. retiree non-pension benefits and liabilities.  The $525 million will be paid by 12 intellectual property licensees organized by Intellectual Ventures Mgnt. and RPX, whose names were not disclosed but filed reports indicate that Apple and Google were among the group of 12.

"The proposed transaction enables Kodak to repay a substantial amount of its debtor-in-possession loan, and provide new financing for its commercial imaging business for growth and success," said Antonio Perez, Kodak Chairman & CEO.

The sale of the 1,100 patents includes 700 patents covering image capture, processing, and transmission technologies related to the design and operation of digital cameras and other devices, including smartphones and tablets.  The remaining 400 patents cover image analysis, manipulation and tagging, and network-based services - such as image storage, access, and fulfillment.

Hopefully Kodak will reinvent itself as a viable and profitable entity and become the dominent player in the commercial imaging business through innovation and research.

High Frame Rate - What's All The Fuss

The hot topic within the Hollywood production community is High Frame Rates (HFR).  Shooting and exhibiting movies at frame rates from 48 frames per second (fps) to 60 fps and even up to 120 fps.  But, why? Why use HFRs ?  Will the average moviegoer even notice the difference ?

The technology to advance the HFR concept exists.  Most digital movie cameras can easily be adjusted to accommodate shooting in HFRs and all Series II digital cinema projectors and servers can accommodate at least a 48fps playback.  But the question remains.  Does running more frames through a lens actually improve the viewing experience ?

The 35mm film standard of 24fps was developed because the studios didn't want to pay for more film that using a higher frame rate required.  For example, at 48fps twice the film would be required for the same movie released in 24fps.  The reason 24fps was chosen was because 16fps (the original standard of silent films) was not fast enough to support sound on film.

Hollywood proponents of a HFR standard claim that it eliminates strobing during near lens pan shots and provides a smoothness to physical movement denied to 24fps images.  But some Hollywood production honchos question HFR's universal applicability.  Some, like famed cinematographer, Doug Trumbull find that HFRs "look a little too vivid" and that real action in high contrast sunlight starts to "look hyper real".  Trumbull's recommendation is to use HFR selectively, using it for action shots but returning the motion blur of 24fps when appropriate. " You can use HFR throughout the movie, changing frame rates for every scene, every object, every pixel, just as you would for brightness or color timing" , says Trumbull. For many viewers, HFR looks 'too real'.  For others, it looks 'too much like video' and not like a regular film.

Ready For HFR

It appears that Hollywood's production folks and their content aequisition equipment are ready to accommodate high frame rates, it's just a matter of its value and need. Is a higher frame rate better? Yes. Does it make a huge difference from the viewers perspective? Probably not.


Best and Happy Movie Going
Jim Lavorato
Comments Welcomed

EXHIBITORS' 12 DAYS of CHRISTMAS

Tis that time of the Year when dreams come true and sugar plums dance in your head, or if you are a movie exhibitor your wish list may look like this:

On the first day of Christmas my true love gave to me .........
A Boxoffice Line A Block Long
Two ... Popper Popping
Three... 'Avitar' Sequels
Four ... 'Twilight' Sagas
Five Thousand ... Gift Cards
Six Hundred ...Fandango Admissions
Seven ... Concession Combos
Eight ... Free Digital Conversions
Nine ... Midnight Showings
Ten ... Premium 3D Movies
Eleven ... Pre-feature Promos
Twelve ... Blockbuster Hits

Happy Dreams and Merry Christmas !

Best!
Jim Lavorato

FILM BOOKERS - DO THEY HAVE A FUTURE?

Does the independent film booker have a role to play in the digital cinema age?  Will the film booking business model follow the fate of the video store or travel agency - or will they continue to operate unscathed by the digital domain?

My thought is that film bookers will have to dramatically change their modus operendi - or they will become victims to the relentless change the cinema industry is undergoing in its digital transition.

Film bookers are paid by theatre owners to make distribution contracts with movie studios on their behalf.  Historically, the most important term of the contract was the percentage of ticket sales that went back to the studio.  The booker also negotiated the commitment that applies to each movie.  The commitment being the minimum number of weeks that a theatre must screen the movie.

The purpose of a film booker is to advocate for his client (the theatre owner). To accomplish this the booker has to have a very good working knowledge of what movies 'play well' based upon each theatre's demographic.  They must also 'spot' sleepers (movies with unrecognized potential) to maximize their client's profits. Traditionally, the job of the booker also included the overseeing of the shipment of the film to the theatre (the cost of which is incurred by the theatre owner).

Film bookers aren't required to be licensed and work under a variety of arrangements. For example, it is very uncommon for a film booker (unlike a talent agent) to work for a percentage of ticket sales.  It is much more common for a film booker to either be a salaried, in-house employee for a cinema chain or be an independent booker.  Independent bookers charge a flat fee for their service - usually so much per screen per week or per movie.

The 'edge' bookers have is that they are booking for any number of cinemas which should give them 'buying power' with the studios.  However, that power has diminished with the industry's transition to digital operation to a point where 'buying power' is almost non-existent.  More and more, there is no negotiation between the booker and the distributors.  The distributor simple sets the terms and its "take it or leave it".  Even the traditional 'gross split' which went in favor of the exhibitor as the movie played-out is gone.  Replaced now by the 'aggregate' rule - whereby a flat percentage of ticket sales is charged for the entire run of the movie.  The aggregate is very prevalent and used more and more on major films.

Given this scenario, and as the cinema industry becomes more dependent on the digital domain, why would a theatre owner require the passe services of a  film booker? Currently, most movies are distributed via hard drive to theatres by the studios or surrogates like Technicolor.  It costs the studios $5 for the hard drive. In the future, movies will most likely be distributed via satellite or over the internet which cost 5 cents.  Could not the studios present a menu of movies and other content to theatre owners which, in turn, would select from that menu (play list) the content they want to exhibit?  The play list would be specific to each cinema, ie first run, second run etc. The terms would be set for each movie (as they are now) by the studios without negotiation. There would be no limit on availability of  'prints' and no need for a booker, as it would only take the theatre owner minutes to 'book' a movie.

The future seems clear.  Traditional film booking agencies will have to embrace new services and expand their product portfolio to survive. They will have to become more relevant by offering new and (in most cases) untried services and systems directly tied to the revenue stream of their theatre clients.  The good-old-days of  booking movies for a fee will no longer be a viable business - or for that matter, even exist.

Best
Jim Lavorato
Comment Welcomed 

CineBuzz REPORT - 14 December 2012

HIGHLIGHTS OF THIS WEEK'S REPORT

- Cathay Cineplexes/Tops In Cinema Marketing
- GDC Teams Up With Chinese Partner
- NEC Takes 'TOP' Projector Honors, Also Latest On Small Venue NC-900
- 'UltraViolet' - To Triple Number Of  'Digital Locker'  Users In 2013

NOTE To CMG Readers: Sorry for the pause in posting. As of late, business and personal committents distracted me from CMG, but I am back and ready for a holiday blitz. Thanks for your patience.

Cathay: Bests All Exhibitors In Marketing Their Theatres

Cathay Cineplexes, a mid-sized cinema chain based in Singapore has, far and away, the best cinema promotions.  Their promotions are relevant, thoughtful, cater to their cinema customers desires, while bringing in new moviegoers to their venues.  Entertainment Equipment, the company I manage, has been a consultant to Cathay in the past - providing training on a variety of management and technical issues.

After getting to know Cathay and how they manage, I was awe struck by their dedication to marketing and promotion.  For example, their latest promotion (see insert) states, "Watch Films At Cathay Cineplexes and Win Your Exclusive Backstage Pass To Europe".  Well, straight away your interest is aroused.  What are they taking about?  Exclusive Backstage Pass? Europe? You must read on!  The tag line (which is terrific)  states: "You Have One Life, One Shot - Make It Count".

This is great promotion and enticement. It sells tickets but also, and more importantly, cements the connection with their customers, while offering something their competition doesn't.  All cinemas should take note of Cathay's promotions and begin to market as they do.


GDC Gets New Cinema Partner

Huayi Brothers Media Group, one of China's leading private film production companies, reported that it had acquired  a 9 percent stake in digital cinema equipment and solution provider GDC Technology Ltd for $20.92 million - which  effectively values GDC at slightly over $232 million. The Huayi Group, known for its quality film productions, entered the cinema exhibition business in 2010 and currently has 12 cinemas in China.

"In recent years, the number of cinemas (in China) has increased rapidly, intensifying competition in that sector.  Huayi Brothers, as a latecomer to the movie exhibition business, increases it potential to develop better than its cinema rivals with GDC's technological support" states, Cai Ling, a Chinese cultural industry consultant.

According to the latest statistics, there are 11,835 movie screens in China, 90% of which are digital.  Of that total, 8,565 are equipped for 3D playback.  This compares to about 40,000 movie screens in the U.S.

Most U.S. exhibitors know GDC as a producer/seller of DCI complient digital cinema servers and as a VPF integrator. GDC is a portfolio company of the venture capital and investment firm the Carlyle Group.


NEC 'TOPS' In Digital Projectors

Every year, Pacific Media Associates, a worldwide consulting firm on digital projection and products, compiles and reports a list of the 'Top Digital Projector Brands'. Pacific Media uses sell-through data from dealers and project integrators, and customer response analysis to compile its list. This year, NEC won top honors with its NP-PA550W High End projector and its NP-V260X mainstream digital projector.

NEC was cited as having the best performing digital projectors vs. all other manufacturers.  That record of achievement is passed on to its line of digital cinema projectors - where the top performing, least problematic, projectors have been the NECs.

In other NEC news, the new NC-900C small venue digital cinema projector - for cinemas with screens up to 24ft. wide - may be a winner.  The NC-900 comes complete with a lens and lamp. Early next year, the package will also include an integrated media server.  The NC-900s offer High Frame Rate capability, and have the ability to run 3D features and alternative content.  "NEC is committed to having large and small screened cinemas convert to digital cinema technology," said Jim Reisteter, General Manager of Digital Cinema Solutions for NEC.  "Our NC-900C projector gives venues with small screens, the ability to delight their patrons with pristine images and a meaningful theatre experience."

UltraViolet Finally Gets Traction

I have discussed UltraViolet in several prior posts.  To refresh, UV is an alliance of leading entertainment and technology companies, retailers, and internet providers (www.uvvu.com  that provide a vehicle for consumers to collect, access, and enjoy movies and TV shows in the cloud via on-line stores, video apps, and mobile and other devices.  The media is stored in each consumer's 'individual digital locker' for on-demand playback and use.

UltraViolet was conceived and brought to life over three years ago but without much success, as the marketing of UV was dismal, now it has gotten its stride. Consumer awareness has now reached 50% and over 7 million users have subscribed.  "Awareness has really risen over the past year", says Lexine Wong, SVP for worldwide marketing at Sony Home Entertainment.  "The industry remains united in marketing UV, for example, all DVD and Blu-Ray releases carry stickers which explain
UltraViolet's cloud-based digital storage lockers and how they work. This has been a great marketing tool. Additionally, for example, Sony Pictures Gift Store offers 500 UltraViolet enabled digital titles to gift during this holiday season." Wong further says she expects expanded marketing efforts involving the movie studios and retail partners to be forthcoming.

The UltraViolet alliance is forecasting to have over 21 million  U.S. subscribers by year-end 2013, and expects this growth trend to be as robust in the international market.

UltraViolet is the future for home entertainment and media collecting and viewing on larger and better home TV and sound systems.  Movie exhibitors - take note - your cinema presentations need to have the WOW factor to compete against this trend. So, when converting to digital cinema don't go the least expensive, smallest, or just-get-by purchase.  Think of the future and who your competition will be, and as the sun will rise tomorrow, the exclusive theatrical window for movie releases will eventually close.

Best and Happy Movie Going!
Jim Lavorato
Comments Welcomed

WEEKLY CineBUZZ REPORT - 18 November 2012

HIGHLIGHTS OF THIS WEEK'S REPORT

- Cinemark Theatre Circuit Sued by Shooting Victims
- Barco Enters World of Sound
- NEC's New Small Venue D-Cinema Projector
- "That's All I Can Stands"

Cinemark Century 16 Where Shootings Occurred

Cinemark Sued By Shooting Victims

Cinemark, the third largest cinema exhibitor in the U.S., has been sued by victims of the July 20th shooting at their Century 16plex in Aurora, Colorado were 12 cinema patrons were killed and 58 wounded.  The suit was filed on behalf of 3 of the surviving victims and other law suits are anticipated.

The suits allege that Cinemark, 'failed to provide security personnel for the midnight screening of  The Dark Night Rises, the exterior doors to the theatre did not have any alarm or security system that would have alerted the staff that someone had surreptitiously left the theatre or that the door in the back of the theatre was being kept open.' 

The suit also states that 'there was no system in place for the theatre staff to monitor parking areas and external doors behind the theatre and that the multiplex had been the site of previous assaults and robberies, including a prior shooting'.

Cinemark representatives could not be reached for comment; however, the circuit plans to reopen the theatre in the beginning of 2013 although no set date has been given.

In a related story, a man in Bolivar, Missouri was arrested and charged in connection with threats to shoot up a theatre during a presentation of  'Twilight - Breaking Dawn.
Blaec Lammers, 20, was arrested at a Sonic Drive In Restaurant after his mother tipped authorities that her son had purchased weapons and may be planning a movie theatre shooting. 

When questioned, Lammers told police his intention was to target movie patrons at a Sunday night showing of the movie (which he had purchased a ticket for) along with a possible attack on people at the nearby Walmart where more ammunition would be available.  Lammers had purchased several rifles and 400 runs of ammunition. He has been charged with first-degree assault, making a terrorist threat, and numerous firearms violations. He is being held on $500,000 bond pending trial.


Barco Announces New Cinema Sound System

Belgium based Barco, known for its digital projectors, announced its new cinema audio system - the Auro 11.1 and the agreement it has signed with DreamWorks Animation in which the Auro system will be used for mixing and for playback at cinemas for the next 15 DreamWorks animated films

"We are thrilled with the Studio's long-term endorsement of the Barco Auro 11.1 sound format.  Barco is committed to not only developing digital cinema projection but we are making critical advances in cinema sound," said Wim Buyens, CEO of Barco's Entertainment Division.  The Auro 11.1 system creates sound in three distinct layers: surround, height, and overhead and features 11.1 channels of sound.

Similar to the new Dolby Atmos 11.1 sound system, the Auro system  is intended to envelope the cinema audience with life-like sound.

NEC's New NC900C Small Venue Digital Cinema Projector

There has been much talk about D-Cinema projectors for smaller venues such as, screening rooms, small cinema auditoriums, art houses, etc. becoming available.
Well, they are now available and the NEC NC900C is the best thus far.

The NC900C is DCI compliant and comes prepackaged with lens and server (including an integrated media block).  It has dual 350watt lamps and projects a 2048x1080 resolution (2k) on screens up to 21ft wide.  Its is 3D capable and can handle high-frame rates, and like its larger brothers it carries a two year warranty.

If interested in the NC900C contact EEC (800-448-1656) for more information.

Popeye Returns To The Big Screen

Popeye, the sailor man, has to battle his nemeses, Bluto, to save his girl friend, Olive Oyl, by using spinach to enhance his strength.  Sony Pictures has plans to bring Popeye back to the big screen. Slated to be released in 3D (probably in 2014).  Popeye, (who first appeared in a comic strip in 1929) should be a good box office draw.

One of the all time favorite cartoon characters, Popeye is a hero - and reflects his attitude with his famous saying, "That's all I can stands, I can't stands no more".

Best,
Jim Lavorato
Comments Welcomed

EEC Launches D-CinemaRemote

On-line Service Access System for Digital Cinema Systems

Entertainment Equipment Corp. announced today the launch of D-CinemaRemote, an on-line service access system for its digital cinema customers which enables remote management of their digital cinema equipment (projection and sound) ensuring maximum performance and uptime.

"D-CinemaRemote eliminates the need for a cinema technician to be present to check system status issues and solve operational problems, now we can solve many problems remotely - single screen or multiplex," said Jim Lavorato, President of EEC. "It  promotes operating efficiency and pro-active technical maintenance."

D-CinemaRemote is the industry's best, easiest-to-use, and accessible remote service system.  It is the latest addition to EEC's ever-improving commitment to provide the best customer service in the cinema industry. "D-CinemaRemote represents a new and exciting addition to EEC's product/service portfolio" says Lavorato.

In addition to D-CinemaRemote, EEC's services include: Cinema Training Central with its complete compliment of cinema training seminars and workshops; sales, installation, and after-sales service of all makes/models of D-Cinema projection, 3D equipment, and cinema sound systems & components; and Theatre Management Services such as: day-to-day theatre management, cinema planning and design, and marketing & planning management.

WEEKLY CineBUZZ REPORT - 10 October 2012

HIGHLIGHTS OF THE WEEK'S REPORT

- Special Report: Day-and-Date Release of Films Across Media Formats
- Dolby: Taking Cinema Sound To New Levels
- Oscar Predictions: Out on the Thin Branches

CINEMA INDUSTRY - ONE STEP CLOSER TO SIMULTANEOUS RELEASE

"Arbitrage", a movie collaboration between LionsGate Entertainment and Roadside Attractions was released simultaneously in cinemas and on video-on-demand via iTunes, AmazonPlus, and through cable and satellite pay-per-view channels.

According to LionsGate, "Arbitrage's" VOD sales reached $11 million as of last week, while at cinemas it had grossed $7.3 million. These are very solid numbers for a low budget, independently distributed movie and indicates that for some films day-and-date release via cinemas and VOD makes economic sense.  I believe this trend will become the norm and puts cinemas on notice that the exhibition business is in for major change and adjustment going forward.

"This is a model that we have been in front of - to make both theatrical and VOD work at the same time", said Howard Cohen co-president of Roadside Attractions. Distributors, such as Roadside, that specialize in VOD releases can now tout pay-per-view profits when they try to acquire movies at film festivals and other markets.
Unlike box office grosses, that are typically (on average) split 55/45 between distributor and cinema owner, VOD grosses are split 70/30 and sometimes more in favor of the distributor. "For example, Roadside and LionsGate paid $2 million for the domestic distribution rights to "Arbitrage" at this year's Sundance Film Festival; then spent about $2.5 million promoting the film's theatrical pre-release.  However, the marketing expenses associated with the VOD release were only several hundred thousand dollars", Steve Beeks, President of LionsGate's motion picture group told CMG.

Not long ago, VOD movies that didn't receive a theatrical release couldn't muster an audience and sometimes weren't viewed at all - this is changing!  "There is a huge change that's in the process of taking place - it's probably the biggest revolution in the history of the movie business" says film maker Barry Levinson, who won an Oscar for the "Rain Man", "VOD distribution provides an economical end run around the traditional exhibition model. With VOD, anyone can view a movie anywhere, at any given time - and that opens up lanes to movies that otherwise would be shut-out of the marketplace".  CMG couldn't agree more.

Many moons ago I wrote in this blog that films would eventually be released on all available media formats simultaneously - that time in slowing inching forward and that is why it is imperative that cinema owners convert to digital asap.  First, because they must ensure that their movie (and other content) presentations (both image and sound) are of high quality and a step above 'in-home' entertainment systems; and second, that cinemas take full advantage of the wide variety of presentation opportunities that 'digital cinema' offers.

Needless to say, the large cinema chains, including Regal and Cinemark have refused to exhibit movies that are released day-and-date on VOD - but they are fighting a losing battle.  The technology can not and will not stop, it is relentless.  It it up to each cinema owner to confront reality, embrace the technology, and USE IT!

DOLBY INTRO'S THE 'ATMOS' CINEMA SOUND SYSTEM

Last week Dolby Laboratories, Inc. premiered its long anticipated Atmos Cinema Sound System which is centered around the new CP850 Cinema Sound Processor.

The Atmos System takes cinema sound to a whole new level, unattainable on any home entertainment system.  The CP850 offers support for 64 speaker feeds. It supports Cinema Dolby Surround 7.1 and 5.1 digital playback, as well as, Dolby Digital Plus, Dolby Pro LogicII, Dolby TrueHD and Dolby E which covers all alternative content formats.

Along with each CP850, Dolby provides the Atmos Commissioning Service which provides a review of the cinema's sound system design to ensure that the speakers and amplifiers have the necessary performance and room coverage to deliver the high-quality Atmos experience.

For 2012, Atmos enabled films include: Brave, Rise of the Guardians, Taken 2, Chasing Mavericks, Life of Pi, and The Hobbit. 
For 2013 (thus far): Star Trek Into Darkness, Gravity, Pacific Rim

The Atmos System ushers in a new dimension in cinema sound that will afford theatres an opportunity to provide audiences an experience unattainable in any other entertainent venue.


CMG'S OSCAR PREDICTIONS

Is it too early to predict what movies will get the Oscar nod, not for CMG it isn't.
Our picks for 2012 are the following:

Best Picture: Lincoln (Hollywood loves history - real or not)
Best Actor: Daniel Day-Lewis (Lincoln)
Best Actress: Naomi Watts (Impossible)
Best Director: Steven Spielberg (Lincoln)
Best Musical: Les Miserables
Best Supporting Actor: Tommy Lee Jones (Lincoln)
Best Supporting Actress: Anne Hathaway (Les Miserables)

OK, folks - that's it!

Best & Happy Movie Going
Jim Lavorato
Comments Welcomed

CINEMAS MEET THE 'MET'

THE METROPOLITAN OPERA'S - HD- LIVE PROGRAM

In discussions with cinema exhibitors on their conversion to digital projection, the question of  presenting alternatives to movies usually arises given that they will no longer be tithered solely to the film reel.  One of the most successful of the alternative content providers to cinemas is the Metropolitan Opera Company's HD-Live Program.

Transmitted from the Lincoln Center in NYC, which is the largest (at 3800 seats) and most respected opera house in the world, the Met's HD-Live performances are carried by over 1900 cinemas in all 50 states and in 64 countries.

"The Met's future was on a downward course. We needed to reach more people with our art. That was the purpose and goal of the HD-Live Program and it proved to be a success beyond our wildest expectations,"  states Peter Gelb, the Met's General Manager and mastermind behind HD-Live, "It provided the huge boost in revenue that the Met really needed."  And with over 1600 full-time staff members and a 12 month production schedule the Met's annual budget exceeds $300 million. Full use is made of its stage, which is 150ft. deep and 10 stories high!  Says, Peter Gelb, "We run our productions like sporting events, not only in the way they are managed but also in the way we use today's broadcast technology."

Featuring 12 productions for the 2012-13 HD-Live season, the Met encourages cinema participation and transmission requirements are easily meet by the current digital cinema projection systems.  Launched in 2006, HD-Live at the Met has sold over 10 million tickets and has won both an Emmy and Peabody Awards.

The Met's HD-Live Program is one way cinema exhibitors can expand their market reach and get patrons into their theatre which may normally never attend movie presentations.  If interested simply go to the Met's website (www.metoperafamily.org)
and fill out the on-line Cinema Questionnaire.


Jim Lavorato
Comments Welcomed

WEEKLY CineBUZZ REPORT - 1 October 2012

HIGHLIGHTS OF THIS WEEKS REPORT

 - Disney Buys LucasFilms for $4+ Billion
 - Kodak's Future: Interview w/Ed Monahan
 -  SPECIAL REPORT:Cinema Exhibitors - Why They Need the 'WOW' Factor



GEORGE LUCAS GOES TO THE DARK SIDE ?

At 68, George Lucas is calling it quits and sold LucasFilms to Disney for $4.1 billion.
It's a good move for Disney which purchased Marvel Comics and all of their rights in 2009 for $3.96 billion.  Disney is clearly in the content purchase mode and Lucas's Star Wars franchise is an entertainment property of huge value.

Lucas will receive 40 million shares of Disney stock representing one-half the selling price and the remainder in cash. This will make him the second largest non-institutional shareholder right behind the Steve Jobs Trust  (the Apple honcho was the largest single Disney shareholder before his recent death).

"For the past 35 years, one on my greatest pleasures has been to see Star Wars passed from one generation to the next.  It's now time for me to pass Star Wars on to a new generation of filmmakers", said Lucas about his decision to sell LucasFilms. Included in the deal are well known special-effects house Industrial Light & Magic, Skywalker Sound, and video game company LucasArts.

Disney CEO, Bob Iger stated that, "It is just fantastic for us to have the opportunity to  buy it, run it, and grow it.  We intend to aggressively expand the Star Wars film schedule. Following the release of Episode VII in 2015, and Episodes VIII and IX will probably follow on a cadence of every other year and then go from there".

After hitting an incredibly long home run with Star Wars, Lucas found an exit strategy with Disney which would keep his legacy alive and well for the long term and not turn to the dark (forgotten) side.

Ed Monahan

KODAK - WHAT'S NEXT

In an interview with Ed Monahan, Kodak's Head of Strategic Planning, CMG got some insight into Kodak's future.

CMG: Why did Kodak declare Barkruptcy in the first place?

EM: Kodak encountered the same difficulties a lot of other companies faced in the digital transformation.  In our case, it really took its toll on our perennial cash cows, and while we have done a lot to migrate to a digital portfolio and new business models, in the end we needed to re-organize under Chapter 11 to resolve our financial situation and start anew.

CMG: What's in Kodak's future as it emerges from Chapter 11?

EM: There is a lot of good going on at Kodak to prepare to emerge from Chapter 11. We are preparing to sell the Personalized Imaging business which includes our traditional film and paper business and the retail kiosk/thermal business. The new Kodak that emerges will largely focus on the commercial printing business and the Personalized Imaging business will be sold to generate capital towards that emergence.

CMG: Is there much intrinsic value in these businesses ?

EM: In terms of the traditional film and paper business we solidly believe in them and are excited about the prospect of their sale.  These are businesses which are part of a market structure that continues to generate sales and earnings, and will be attractive to prospective buyers.

CMG: When is the sale contemplated ?

EM: The selling of these businesses is viewed in a very positive light. We are hopeful to complete the sale by the middle of next year.  Kodak will then be in a position to serve our markets with leading products and innovation and make further advances into the digital ecosystem.  It is that digital ecosystem and digital lifestyle that will shape not only what Kodak does but what many companies do to win going forward.

CMG: Thanks Ed.


CINEMA EXHIBS: YOU NEED THE 'WOW' FACTOR

My mantra to cinema exhibitors (large and small) is that going forward your most significant, and relentless, competition will be the consumer's living room (aka media room, home theatre, family room, whatever).  When I hear exhibs tell me they want to convert to Digital Cinema but only require the smallest (re: least expensive) projector and definitely no sound upgrade (even if they currently have mono sound in their theatre) my heart drops.  Why? Because in the future their business, under this scenario,  is terminal.  That cinema  simply will not be able to compete in terms of presentation quality (image and sound) with a dark on-screen image and sub-par sound.  Exhibs, you need to have the 'WOW' factor in your presentation.  It has to be better, significantly better, than what people are viewing in their homes!

To their credit, after some discussion, most exhibitors that Entertainment Equipment deals with (and most are long-term customers) trust our judgment and understand that since they are making a significant investment regardless, their best course is to invest a little extra and give their patrons a movie presentation the likes of which is beyond their wildest expectations and one that cannot be replicated in their home- media room!

Exhibitors, if an equipment provider isn't telling you that purchasing an undersized D-Cinema projection system is not the way to go - than BEWARE , because they don't have you best interests at heart.

So, you ask "Why do I think this way?" 

Well, let's have a look.  The new normal in Hi-Def  TV purchases for home media is the 72" ( preferably called the 6 footer) screen - which is quickly becoming the 7 ft. (84") screen, These 7 footer will be on many a Christmas list this year, but it doesn't end there.  Several trends are emerging in 'home entertainment' that we need to explore.

First, is the Multiple Screen trend.  The use of dual and multiple screens is becoming more popular.  This can mean two or more flat-panels on the same wall or screens on various walls in a room - which is a popular arrangement in rooms that function as party or entertainment spaces.  Why, multiple screens?  Because our video choices are now so vast that people often don't want to be restricted to just one screen in a room.

Needless to say, a cinema has one screen, so the presentation must be damn good!.

Second, the Media Room is transforming.  What was once the '90s trend of a 'dedicated home theatre' with a 'cinema' look and fixed seating etc. has given way to
more comfort with sofas and chaise lounges.   People want a home theatre experience but don't want to limit the room to just one use and making it a multipurpose room ensures the systems installed are used more frequently and by more family members.

Third, Social Networking.  Multi-screen goes beyond traditional TV,  Smartphones and tablets are not only being used as TV remote controllers but as second viewing screens as well, with social media driving this trend.  Users are 'live' tweeting, posting, and texting while watching sporting events, movies, or TV shows.

Fourth, Networking Media. According to the Consumer Electronics Association, 25% of all U.S. homes now have an Internet connected Blu-Ray player and over 70% have a gaming console connected to there primary viewing screen.  The internet will become 'the source' for accessing content in the home.

Fifth, Sound. Sound is one-half the experience in viewing any content. And this is no exception in the home,  Better and higher sound quality continues to evolve and is being incorporated in home media systems.  The current trend is the use of floorstanding speakers rather than in-wall speakers.  Floor speakers deliver the best and clearest sound and they are mobile.  Another trend will be toward 'soundbars'. Not only aesthetically pleasing but good soundbars deliver the quality of full-range speakers and even incorporate subwoofers. 

In summary, Cinemas must have that 'WOW factor'  in all of their presentations.  In-home entertainment isn't at the cinema level - yet,  but cinemas have to do it right and when converting to Digital Cinema, well, that is the time to do it.  Digital cinema is the great equalizer, because it allows a single screen theatre in a small town the opportunity to present a movie or other content that is equal in image and sound quality to the 'best' cinema.


Best
Jim Lavorato
Comments Welcomed  

HOLLYWOOD vs.SILICON VALLEY

Former U.S. Senator Chris Dodd - you remember ....... Dodd-Frank, the legislation enacted by Congress which was intended to right the wrongs and abuses of the banking industry which caused the financial melt-down of 2008.  Yes, that Chris Dodd, now the Chairman of the Motion Picture Assoc. of America,  who was offering a high-five to  tech industry honchos at a Commonwealth  Club of California dinner last week.

The conciliatory gesture came on the heels of the movie industry's humiliating defeat in their efforts to control content piracy on the Internet. The MPAA and the studios were shocked by the huge defeat of legislation they lobbied hard for, and now it was all about face-saving and passing the peace pipe.  In his speech, Dodd noted that Google, which was the lead opponent against the studios, by contrast has the most content deals with Hollywood.

The anti-piracy legislation that was voted down in both the U.S. Senate and the House of Represenatives were the Stop Online Protection Act (SOPA) and the Protect Intellectual Property Act (PIPA).

"We call them audiences, you call them users, but giving them the best possible experience is a shared goal" Dodd told the dinner attendees. "In the end, we all report to the same people. I want you to know that our community is listening, continuously innovating, and hungry for more. And we know we can't do this without the work of the brilliant and creative minds behind the new devices, internet platforms, and other digital outlets."

Dodd also suggested it was important for both Hollywood and Silicon Valley to bury the hatchet and work together to enable seamless content sharing, saying, "We have to break through the notion that this is a zero-sum game, we need to benefit from each others success."

Good intentions aside, both groups have been preparing for further conflict.  The MPAA and studios have bolstered their social media strengths while its Silicon foes recently formed the Internet Defense League, whose purpose is to immediately respond to any threat to the Internet from Hollywood.

CMG believes the war has just begun!


Best
Jim Lavorato
Comments Welcomed

LIONSGATE CEO ROARS

Jon Feltheimer, Lionsgate CEO

CMG caught up with Jon Feltheimer, Lionsgate Studio's CEO during a webinar held at  the CTAM (Communications & Theatre Association) conference last week.

CMG: What is the most pressing issue you are dealing with right now?

JF: Our biggest issue, and what I am discussing at this conference , is the falling revenue from DVD sales but how they are being offset by VOD revenue, which is where we must be moving.

CMG: Explain.

JF: Let's take one our our latest films, Arbitrage staring Richard Gere. It brought in about $6 million in VOD revenue compared with $7 million at the boxoffice. That level of on-demand revenue would have been unimaginable for a specialty film just a few years ago.

CMG: Why is this?

JF: The audience for on-demand movies is different than that of moviegoers. 90% of Arbitrage's theatrical audience didn't know the movie was available on-demand and the majority that purchased the movie on VOD didn't know it was playing in theatres. They are totally different audiences.

CMG: I understand that digital rights also play a huge role in the TV sector, could you comment on this?

JF: Yes. For example digital rights were an important factor in renegotiating the final three seasons of  Mad Men (a Lionsgate production with AMC).  At nearly $5 million per episode, we needed to find ways to make Mad Men profitable, so syndication deals were struck with Netflix and other web-based streamers. 

CMG: You spoke at the conference on the need for the industry to work together and not compete in ways that make it harder for others, can you comment on this?

JF: Narrow agendas can make it hard to work together and look at the big picture. For example, the battle between the satellite networks (Dish Network and DirectTV) and content producers over Dish's AutoHop system (AutoHop allows users to skip over commercials and ads) is bad for the industry. We also need better user interface.  You can have premium content, but it's no good if the viewer can't find it.

CMG: What do you mean by - can't find it?

JF: For example, the on-demand release of "What To Expect When You're Expecting" underperformed our expectations simply because the movie starts with a "W".  As such it appears near the end of the A-to-Z lineup and viewers don't scroll down all the way.

CMG: Can you quickly speak about EPIX (Lionsgate's video service) ?

JF: EPIX continues to be a focus for us and our partners, Viacom and MGM. We believe that digital distribution deals will drive the content providers in certain directions.  EPIX recently struck a deal with Amazon Prime and ended it exclusive distribution arrangement with Netflix. We felt we needed more outlets for our content and this trend will continue.

CMG: Thanks, Jon



Best & Happy Movie Going!
Jim Lavorato
Comments Welcome

WEEKLY CineBUZZ REPORT - 10 October 2012

ULTRA HI-DEF TVs

One of the issues I stress when discussing Digital Cinema conversion with movie exhibitors is that D-Cinema presents an opportunity to improve the image and sound quality of the movie presentation, which is paramount in remaining competitive with their biggest threat - the living room!.

Consumers' living rooms are getting more and more 'entertainment immersive'. For example, at last week's CEATEC show (Japan's annual electronics love fest) the major TV manufacturers were all highlighting future Hi-Def TVs.  Touting 4 times the resolution and boasting larger screens (84" or 7ft. is becoming the new normal for size) these 'new' TVs will further enhance the in-home 'movie experience'.

The shift to D-Cinema for exhibitors is not only necessitated by film's demise but by the requirement that the movie theatre 'experience' keeps pace with other advancing technologies.  This means that a cinema's digital conversion be accomplished 'right', with proper sized digital projectors and enhanced sound.  This is the only way a local cinema will survive the relentless competition.  Choosing the smallest projector, not enhancing the existing sound system, and just trying to squeak by to save a few dollars on conversion won't get the average cinema the wow factor needed to compete against a 7ft. TV screen with surround sound.

The writing is on the wall and cinema owners need to read it.


LOOK MA - NO COMMERCIALS ......... NOT !

For years now, consumers have been by-passing TV ads by using their DVRs (digital video recorders) - but those days are numbered.  The DVR is destined for the techo scrap heap of history as viewers exchange their ability to skip ads for the convenience of streaming their favorite content on any device at any time.  The DVR is essentially being replaced by VOC (video on demand). And this is really good news for media companies and advertisers alike. 

Consumer behavior is shifting as cable and satellite providers have broadened their VOD offerings.  Viewers no longer need a DVR to watch most of their favorite sitcoms, dramas, or reality shows.
This behavior shift is further promoted by on-demand video subscription services, such as Netflix, Amazon, and Hulu.  Younger viewers are quickly moving to a scenario where they never knew you had to 'set' a TV to record a show.

What will happen is that VOD programming will disable one's ability to fast-forward, ie viewers can't escape the ads when they watch via VOD content.  In addition to controlling commercial skipping, VOD allows media companies the ability to control how long a program stays available and when it goes down - with DVRs they had no such control.

Right now, it appears that the scale is tilting back in favor of media companies and advertisers as commercials will once again be unavoidable for viewers.

ULTRA VIOLET - STILL INVISIBLE

UltraViolet, the movie studios initiative to push consumers to stream content from the cloud and store it in their personal media 'lockers' hasn't caught on.

Like its name, UltraViolet (UV) has thus far been invisible to consumers.  What UV's sponsors (which consist of the major studios, software & hardware manufacturers, and web retailers) wanted was for consumers to store (stash in their lockers) all manner of content and be able to access it at their convenience using any type of UV compatible web-connected device.

The problem is, consumers haven't shown much interest in the UV concept.  Why?  A big factor, I believe, is that marketing and promotion of UV by its sponsors have been dismal.  There should have been a global marketing campaign.  Another factor, was that early on UV was riddled with technical problems regarding the proper functioning of the locker system (these issues have now been solved).

The studios, led by Paramount and Fox, are now back on the UV band wagon, so you'll be hearing more about it and its value in the future.


3D - IT's ALL ABOUT THE LIGHT

I can not emphasize enough the importance of presenting 3D  movies with the proper amount of light, as not doing so puts 3D exhibition at risk of losing patronage and tarnishing a cinema's reputation.

Some 3D systems, such as RealD require an enormous amount of light as they rest in front of the lens outside of the projector.  So, running RealD 3D with a 2000 or 3000 watt xenon lamp is woefully inadequate even with the required silver screen.  Dolby 3D requires the least amount of light as its 3D system rests inside the projector and even then a minimum 4000 watt xenon should be used, no matter what size the screen.

The biggest complaint from audiences and filmmakers alike is that 3D films are too dark.  In 3D, you can only get the perception of depth when there is enough light otherwise the image looks flat.

I'm aware that the cost to exhibitors for the 3D add-on is substantial; however, if an exhibitor opts for 3D they must do it right, and there is no substitute for the proper amount of light to obtain the full 3D effect as the filmmaker intended.  When moviegoers have a bad experience with 3D it makes them less likely to attend (and spend on the 3D up-charge) going forward.

In 3D exhibition it's all about the light, so if installing a 3D system exhibitors and there equipment providers/installers must insist on using the proper light level.


Best
Jim Lavorato

CHIEF EXECUTIVE CUSTOMER

Over the last 4 months I have logged in over 12,000 travel miles visiting scores of theatres to discuss their conversion to Digital Cinema.  One question that almost always arises, goes something like this, "should I raise my admission prices upon conversion".  At first blush the answer seems easy. Will the current customers (and possibly new ones) continue to attend and support the cinema, if prices are raised?  But the answer is more complex.

Lets face it, every business has to raise its prices at some point.  And if you provide genuine value, and the price boosts aren't too onerous then your customers may accept them in stride.  But by the same token, raising prices can be tricky, particularly in the very competitive entertainment business.

So the question becomes whats the best way to raise prices, without losing customers?

First, start by taking into account all the factors that influence how you price for admissions and concessions.  Such as, market forces, the economic conditions in your area, competition, and cost-of-doing business (just opening your doors).  This is your start point and provides you a base or break even price point.

Second, if you don't think your customers can handle a direct price increase, than consider how you package your current pricing structure.  Most cinemas already use tiered pricing for popcorn and drinks but make sure your pricing is structured to that it pushes the patron to at least the middle priced item (never have more than three sizes or options from which to choose). 

Third, since you are investing a considerable amount of money into digital cinema conversion, make sure you explain this to your community.  There has been plenty of press (national and local) regarding 'the cinemas' move into the digital domain but it must be emphasized by you.  That YOU are making a commitment to THEM in providing the latest and best way to view the latest movies and other entertaining content.  Contact your local press, TV and radio stations, spread the word on your website, and use all of the social networks you can - this is free and great promotion and sets the way toward increasing prices.

Fourth, be prepared for blow-back!  While you may have every reason to raise prices you should be prepared to explain them, just don't blame the cost of doing business. If necessary show off (yes, offer the moviegoers the opportunity to view the projection room) your new digital projection equipment (your investment) and explain how you and your staff are working hard to ensure they continue to receive the best movie entertainment unavailable in their living room.

Should cinemas raise their prices upon digital conversion.  Well, to my mind, it's worth it, but you must put in the effort to explain the increase and its value. Place yourself in the moviegoers shoes -what they want is very good/excellent movie entertainment with few distractions and courteous and efficient service. If executed properly, the customer will understand and accept the price increase, but it's your job to make 'the sale'.

Good Luck

Best
Jim Lavorato

CINEMAS NEED TO USE PHONE TECHNOLOGY

GOOD/HID Access Reader Just Takes a Swipe

If you read CMG with any regularity you are acutely aware that I am a huge proponent of the use of Smartphones technology by cinemas for everything from admission and concession sales - to - inventory control.

Now another use can be taken advantage of by cinemas - Security !  Recenty, Good Technology, a Sunnyvale, CA security software company teamed up with HID Global, a manufacturer of physical access readers, to produce and market security access door locks - turning the Smartphone into a "key" with just a swipe near the reader/lock.

Calling it the "world's first NFC (near field-communication) enabled system for the use of Smartphones for physical access to buildings and offices " Good choose the Samsung Galaxy S III Smartphone for its application.  Using secure NFC microSD cards in the phones, users are sent physical access credentials (ie keys) 'wirelessly'  via HID's Secure Identity Service, which also lets the system administrator (cinema owner) manage and monitor credentials and identities tied to specific phones. 

What this means is that you can 'push or revoke' credentials over the air to each user,
For example, allowing access to a certain facility (or certain doors within that facility)
or providing a one day or even one time access only, or provide an employee or manager full access to the facility 24/7, or allowing access only on the days that an employee works, say Monday, Wednesday, Friday and no other days.  Another benefit is that there are no physical keys to worry about, to forget, to lose. When an employee leaves access is simply revoked wirelessly.

Using the Smartphone adds another layer of security because users not only need to obtain the appropriate credential but they need to know that phone's  password to use it as the key.  Additionally, no one is going to forget their phone, because it is their phone. If they forget it, they will always go back and get it.  The speed comes from the fact that all users are never slowed down or inconvenienced when reaching a doorway and not being able to access it (because they forgot their phone).  If  the phone is lost or stolen, first one would need the code to unlock the phone and second, the access credentials can be revoked instantaneously.

This use of Smartphone technology is not only smart but inexpensive and the control it provides over individuals' access to a facility and premises is truly remarkable.


Best
Jim Lavorato
Comments welcomed !

HOLLYWOOD REWORKS REVENUE STREAM

P. Dauman, Viacom CEO

DVD sales of new released movies (one of Hollywood's main revenue streams) continues to tumble - forcing the major studios to completely rethink their movie making/distribution model.  As multi-platform 'pay for view' takes a firmer hold on the consumer the studios are re-casting how they fund movies.

This redo of a movie's revenue stream has taken hold in Hollywood.  "Greenlighting a feature film, Paramount now restructures deals made with actors, producers, and directors to better reflect a 'partnership' relationship' on the economies of a film rather than a high upfront cost", Viacom CEO Philippe Dauman, told CGM.

"We don't mind sharing the upside of a movie with talent as long as we don't have a downside, or we have a sharing of risk" says Dauman.  "It is no longer feasible for a studio to make huge upfront payments to talent with an increase uncertainty on the back end due to faltering DVD sales."


Until recently, the big share of a movie's profits rested with the sale of DVDs and not the box office, but as consumers have moved (very quickly) to internet downloading of content the studios have scrambled to re-think how they contract with talent and, just as importantly, maneuvering to get a larger piece of the digital streaming pie.

"The way we look at the movie business is that we want to create great films and we want to manage the downside, the risk/reward equation if you will". Dauman said. "We're looking at all sorts of revenue opportunities".

Best and Happy Movie Going!
Jim Lavorato