CINEMA BUZZ Weekly Report - 20 March 2013

European Cinema Retail Group

Least we forget about our cinema mates across the pond, the Intl' Union of Cinemas (a European trade group for cinema exhibitors) recently launched the 'European Cinema Retail Group' whose goal is to assist European exhibitors optimize their retail operations.  As far as I know, there is no equivalent body in the U.S. so the ECRG is unique.

As we all know, concessions and retail are the profit generators for all cinemas, as such the ECRG's goal is ' to understand what works best for each cinema and to meet the demands of ever more connected, informed, and increasingly price-sensitive cinemagoers'.  The group plans to accomplish this by rethinking concession portion sizes, enhancing staff sales skills to increase per cap spending, and reassessing the menus to accommodate changing food tastes.

As marketers, cinema managers must address all of the 'touch points' in the cinema going experience and turn their retail operations into a more personalized and fun experience. This is true no matter which nation or geographic area of the world .  The Intl' Union of Cinemas wants to formalize that process and monitor it on behalf of their members. This is worthy and very appropriate, as admission prices - for the time being - have been pushed to the limit, particularly in Europe given its current financial situation.  Carry-on!

Hollywood Examines The 4K Issue

Earlier this month the Hollywood Post Alliance held its annual Tech Retreat and hosted the best minds in entertainment technology.  At this year's retreat, 4k resolution took center stage after UltraHigh Definition TV was promoted as the next visual coming.

Test results on viewer perceptions of various content was presented by the European Broadcast Union. Participants to the tests were asked to rate viewings bad, poor, fair, good, or excellent.  Between HiDef (1k or less) presentations using 720p, 1080i, and 1080p image lines there was no conclusion on perceptual difference. However, there was a "statistically relevant, but very small" perceived improvement of native 4k content when it was presented on a UltraHigh Def TVs.  So the results of the test regarding 4k was that its slightly better than what the folks are now viewing in their living rooms.

Currently, the only 4k content is being produced by Sony Pictures and they are heavily into 4k because their sister company is manufacturing the only 4k production cameras.
Production in 4k is a different and much more expensive undertaking for the studios, but the major problem is displaying the content.  First, most cinemas can't exhibit 4k films without upgrades to their existing d-cinema projection systems and two, most folks don't own (and have no incentive to own) an UltraHigh Def TV.

So, for the time being, 4k is backburnered - at least until UHTVs become prevalent and moviegoers clamour for higher resolution films (which isn't going to happen).

Customer Service - Who Are The Worst

When consulting or training I always talk about customer service and how important it is for any business, but particularly for small businesses.  I give examples of what I term Mildly Hostel Business Practices (whose things businesses do, that although small, eventually lead customers to seek others to do business with).  Bad customer service is seen in large companies as well and in recent survey by Advertising Age, these companies ranked as those with the worst customer service (listed in best to worst order): Walgreens, TJX Corp. (TJMaxx & Marshalls), The Gap, SuperValue, Sears, CVS, Safeway Supermarkets, Netflix, and worst Walmart.

Too Much of a Good Thing?

Amazon, Microsoft and Google all have TV networks.  Each also have production studios and all are vying - along with Hollywood and others, like on-line streamer Netflix - for the attention span of very fickled viewers. 

The rivalry between these waring parties (which was predicted in this blog 4 years ago) is now in full swing and it's game on.  The tech giants have two advantages over their competition: first, virtually unlimited funds, and second, access to instant feedback from viewers and the flexibility to change their programming as needed.
Additionally, they intend to produce high-quality, Hollywood professional- level content and can well afford to pay the for the best story-lines, scripts, writers, actors, and directors.

But is too much of a good thing - Good? Yes, there will be many more choices for viewers but how much time can they devote to viewing?  TV Guide, Inc. conducted research and found that viewers find organizing and managing their current viewing choices 'stressful'  Nonetheless, there is a war raging for eyeballs and it is going to be fierce - and both the cinema and TV industries will be impacted.

It is said that "content is king" but in the future it will be "captivating content" that is king, and it's anybody's guess as to which media or tech company will produce it.

Best and Happy Movie Going!
Jim Lavorato
Comments Welcomed

CINEMABuzz WEEKLY REPORT - 15 March 2013

Taco Bell Hits It Big At Cinemas

Last week Taco Bell launched the 'Cool Ranch Doritos Locos Tacos - and the new product was a huge success.  Taco Bells across the U.S. sold millions of the new Doritos Locos and cinemas were a major factor in the marketing of the product.

By far the most unique component in the marketing strategy was Taco Bell's 3-D ad, which was the first 3-D spot in cinema history.  It premiered during the pre-show 'FirstLook' at more than 8,000 screens nationwide, while a 2-D version of the ad ran at 19,300 screens.  The cinema ads, which were specific to that audience, feature the image of a Doritos chip spinning and exploding, with pieces of chip and seasoning flying out as it morphs into the Cool Ranch Doritos Locos Taco Supreme.  It is accompanied with the tagline: "If you loved the original, wait until you eat the sequel".

Taco Bell has made a commitment to run various ads in cinemas throughout 2013 to amplify the brand's key promotions.  It is estimated that 90% of cinemas are within a 5 mile radius of a Taco Bell location.

Taco Bell management believes cinemas are a perfect avenue to reach their target audience - adults 18 to 34. "It has been proven time and again that adding cinema to a media promotion increases advertising engagement, recall, and likability, so planning cinema upfront like this is clearly the way to go to make the biggest impact" , says Cliff Marks, President of Sales & Marketing, for NCM Media which created the ads.

Chevy 'Drives' Into Theatres

General Motors' new ad campaign for its Chevrolet brand will include the unprecedented use of cinemas.  Last month, GM shed its long held  'Chevy Runs Deep' marketing slogan and replaced it with the 'Find New Roads' marketing theme.

Alan Batey, GM's Chief Marketing Officer, states "Find New Roads represents an opportunity to leverage the product launches that we've got coming up, and the U.S. is really at the forefront of those plans."  The first new ad under the campaign was aired during the Grammy Awards. The ad highlighted the new Stingray and Impala. "Next up will be four standalone product ads that will run on TV but also at cinemas.  We believe it's really fantastic cinema creative" says Batey. 

The pre-feature cinema ads will include 90, 60, and 30 second versions of the 'Find New Roads' promo. "We haven't done much in cinemas before, said Batey, but the great use of emotion and music lend themselves will to this medium".  GM is clearly trying to appeal to Millennials with its new products and feels these new ads will change its image.

In Theatre Dining Takes Off

I've talked about this before but dine-in at cinemas is really taking off and every exhibitor should take note.  It may seem like your combining two risky business endeavors into one - but dine-in cinemas are becoming a very healthy (and extremely profitable) niche and a way for independent cinemas to not only survive but thrive.

For example, the Nitehawk Theatre, in Brooklyn, NY, opened in 2011 as a second-run house - in its auditoriums there are small tables in front of each pair of seats and space between rows for servers, who take orders during preshow and deliver food and drinks during the opening of the feature.  Patrons can place orders during the movie by posting a slip of paper which 'flags' the servers. One of  Nitehawk's signature items and biggest seller are the Fish Tacos (see insert at right).

"Your first thought when you talk about eating at a movie is that it somehow takes away from the cinema experience, but ultimately the trade-off for us, is that we deliver a really good cinephile experience", says Tim League, CEO of Alamo Drafthouse Theatres.

The payoff for all the effort of running a dine-in cinema come with the check. "Most traditional cinemas see per-head expenditures on concession anywhere from $3 to $6. With us, it's over $18," states Fred Schoenfeld, the owner of the single screen Art Deco Commodore Theatre, in Portsmouth, VA.  Sticking with perennial favorites, like sandwiches, salads, and fish n' chips. Schoenfeld says, "we keep our overhead low and our profits high."

I have consulted on a number of dine-in cinema projects, including Alamo Drafthouses, and can attest to their huge success. My advice,  you don't have to have a large menu selection but can start small with a few 'tried and true' items.  Study your demographic, and select menu items appropriately. Keep it simple, but unique and tasty.

Best and Happy Movie Going!
Jim Lavorato

Microsoft Becomes Movie Distributor/Studio

Pulp, a first in Xbox distribution

Microsoft Uses Xbox For Movie Distribution

Pulp, an independent British movie, will make it debut and be the first film distributed solely through Microsoft's Xbox gaming console - bypassing cinemas and other distribution outlets.

Pulp, a crime drama about the comic book industry, will be available exclusively to Xbox users and Microsoft says, it will not be a one-off but the first of many films they intend to distribute in this manner.  Says Pulp's creator, Adam Hamdy, "For an indie film like Pulp, that doesn't have any bankable stars, it's a challenge getting distribution from a studio".  Microsoft, however, is eager to fill the studio's role. Pav Bhardwaj, Product Manager for Xbox Live says, "It's a great fit.  The film is really well aligned with our audience.  All our audience like that sort and type of film and it's great to support British talent."

Microsoft knows just how important a consumer's living room is for entertainment, so they believe it's a win/win for them and the film's creator/owner to distribute it through Xbox. You will see more and more of this type of innovative movie development and distribution in the coming months.

Pulp is not a film for everyone but it does fit the Xbox user profile  and it will do very well at the 'virtual boxoffice'.

Best,
Jim Lavorato
Comments Welcomed

CinemaBUZZ REPORT - 4 March 2013

Michael Lynton

Sony Honcho Says "Cinemas will get movies first"

In a recent interview, Michael Lynton, CEO of Sony Corp. U.S. and Sony Entertainment stated, "The only way you're going to see a blockbuster movie like 'Skyfall', is if a studio like Sony foots the bill.  And once they do, they're not going to let you see it anywhere but in a theatre in the first few months it's out."

Technology drives the way we all consume media, but some parts of the media world aren't likely to change much (such as the cinema release window) anytime soon, at least if Lynton has his say.

"There are plenty of reasons why people like me, and maybe you, would like to see a movie like 'Skyfall' at home while it's still playing in cinemas.  But Sony has very good reasons for keeping things the way they are", stated Lynton.  "We are happy to experiment when it comes time for other windows - perhaps there is a way to charge viewers a premium for home viewing before the movie makes it to DVD, for instance".

Lynton, who was very candid during the interview, had a lot to say about the other ways digital technology was impacting Sony, from the demand for streaming media to the way it is dealing with Twitter, Facebook, and YouTube users, who can sink a movie's attendance in record time.

Cinema Audio Is Back

While Digital-Cinema conversions have been the gorilla in the cinema room for years, exhibitors lost focus (and interest) on the audio side of the movie presentation. However, over the past few years, audio for both the cinema and home theatre has greatly improved and audio is once again on the radar screen.

The new generation of  cinema audio products is multifunctional and, with the implementation of advancements like, HDMI, ethernet, Airplay, and Dolby 7.1 and 11.1 Atmos, deliver an enhanced, never before heard, movie experience.   Improvements in digital amplifiers, sound processors, and loud speakers have made cinema sound upgrades affordable and feasible.

Cost is always a factor when upgrading equipment, but research shows that moviegoers are willing to pay more for a superior movie presentation (screen image and sound) which offsets the incurred expense of an audio upgrade.  Don't forget, now that cinemas have the capability to exhibit alternative content, such as the Met's Opera program, sound becomes even more relevant.

It is no longer acceptable for moviegoers to tolerate inferior sound, and quality sound is now the new normal which consumers expect and demand.  Whether it's to embellish the movie experience, upgrade old components, or embrace new technologies, exhibitors are increasingly putting audio back in their sights.

Comcast Says, "We're All In"

Comcast, the nation's largest TV cable operator announced last week that it would purchase General Electrics remaining stake in NBC-Universal for $16.7 billion.
"This is a really special moment for our company," Comcast Chairman and CEO Brien Roberts stated in a conference call, "We're all in."

Comcast, like the other cable operators, see their core business eroding as more and more consumers move to the internet for their viewing entertainment.  Comcast needs distribution and, more importantly, content - therefore the purchase of NBC-Universal fits into their long-term strategy very nicely.  For its money, Comcast gets a premier TV network (NBC) and all of its subsidiaries, as well as, a movie studio (Universal).
The goal being to offset the expected gradual losses in the cable industry with original content which can be delivered in cinemas, and pay-per-view via network TV  through on-line streamers, or in partner with the likes of Apple, Amazon, Google, and other internet entertainment providers.

Best and Happy Movie Going!
Jim Lavorato
Comments Welcomed