Cinemas Will Survive, BUT

There are large drawbacks to on-line, first-run films and to virtual reality content; however, movie exhibitors need to protect the cinema experience they have in place and improve upon it.

High frame rates, and screen brightness levels are critical, and sound improvements are necessary at all cinemas.  Even the smallest local movie theaters need to provide the absolute best possible experience - and they are not there yet!

Cinemas need to protect what they have and better it. Digital projection was a great leap forward in movie presentation and as far as value- based entertainment a trip to the cinema is worth the cost - there is no alternative to a superior cinema presentation, now or in the future.

Movies need to be brighter.  Too many cinemas under-lamp there presentations, when the reverse should be the norm.  All cinemas should be projecting with the highest wattage, brightest lamps and replace them at (or before) warranty limits.  The old, and now defunct 35mm LucasFilm THX cinema calibration and alignment program has been replaced by the use of a reliable and competent cinema dealer/tech company - which are getting harder and harder to find given the complexities of the digital projection and sound systems.

Piracy is another issue that continues to impact the whole cinema industry in a very negative way. A lot of movie content is pirated almost immediately upon release.  File sharing is file stealing and nothing more.  Pirates are making millions of dollars from people going to torrent sites and down-loading movie files. The notion of, "I'll just wait and stream it and I don't have to pay for it" really hurts both movie distributors, but particularly the independent exhibitor.

It is also true that many of these same, let's call them mini-pirates, don't understand or refuse to that watching a movie on a small platform isn't watching the movie as it doesn't have the intended visual or audio experience.

Cinemas, will survive, but both the studios and exhibitors need to understand that the old ways will not be tolerated by consumers, who demand an experience that exceeds what they can watch (in many cases for free) on a smaller (be it inferior) platforms.

A Very Different Summer Box Office

Thus far, this summer's box office has seen a number of big-budget flops. 'The BFG', 'Alice Through The Looking Glass', 'Warcraft', 'The Legend of Tarzan' each with production budgets above $130 million, not to mention marketing and distribution costs, spells not so good news for the studios.

The cinema box office is showing strains, and as CMG has pointed out before, the superhero and fantasy sequel films may have run their course.  Now, not to be too negative, this summer has seen big hits as well.  'Finding Dory' and 'Captain America' helped rise box office receipts by 2% over 2015, but admissions are down which does not bode well - and it's the younger audience (18-39) that is staying away.

It is too much of the same. Audiences can only digest so many super hero films.  Moviegoers need something new and fresh on the big screen.  Coupled with endless competition from TV and on-line content (which is getting better and better) there is little incentive to visit the local cinema.  From Netflix to Pokemon Go the variety of entertainment options is huge.

Much of the box office pain is self-inflicted, by both the studios (repeating the same movie themes over and over) and the exhibitors (in their lack of imagination and originality in selling their cinemas).  Thank goodness for 'The Secret Life of Pets' which essentially rescued July's box office.

Sequels - there are too, too many and people are sick of seeing the same old, regurgitated films. Most sequels are 'deja vu' all over again.  Reboots flock to the big screen in mass: 'Ben Hur', 'Blade Runner', 'Spider Man', 'XXX', 'Beverley Hills Cop', and 'Indiana Jones' just to name a few that are coming up - and which may fall flat as well. Movies need good storylines, a la 'Fast and Furious' which is based around characters who audiences associate  and relate to.

The box office is getting more skewed each year. Last year, the top five movies generated 25% of all admissions.  This is seen at the studio level as well. Disney ponied up $15 billion to purchase Pixar, LucasFilms, and Marvel but their investment is paying off.  This year, Disney has four of the five highest grossing films and thus far over $5 billion in box office receipts - a 31% market share.

All of which begs the question: does Hollywood need consolidation?  Fewer studios, fewer but better movies. Eliminate the waste, the marquee fodder and box office fillers. Stop making movies that were made 10 years ago.

The movie making business and cinemas are up against changing tastes, unyielding competition, and an aging business model. A wider and deeper range of fewer movies is called for and, for their part, cinemas need to keep up with presentation technology.

Horror: Cinema's Stepchild

Horror has even gone comedic

Horror films many times go under the radar as box office bruisers. Particularly in the summer-time there is nothing better when visiting a cool, comfy place (your local cinema) and screaming your head off - as a tension and stress reliever there is nothing better.  Being scared is an adrenaline rush.
Given this, moviegoers' appetite for horror is unrelenting and is second only to the high-impact, action, superhero, or sci-fi blockbusters (many of which teeter on the horror genre cusp).

Horror vs. supernatural, the distinction is very blurry.  Horror's function is to scare through the use of anticipation.  Waiting for the inevitable, frightening, sometimes unspeakable acts of violence toward the innocent and vulnerable.  The supernatural, a sub-set of the horror movie, delves into the more unreal but still frightening - vampires, zombies, aliens, mutant animals are all part of the supernatural.

This summer, the 'Bite', 'Conjuring 2', 'The Purge:Election Year', 'Lights Out', and 'Don't Breathe' will gross over $500 million - not too shabby for films with a total production budget of $42 million.

Horror pays, and it pays big at the box office for both distributors and exhibitors. Never underestimate the entertainment value of the horror film.  Many moviegoers love to be frightened, shocked, scared, and awed. They like to fantasize and are mesmerized by other-worldly beings.
Horror has even gone comedic, a-la films like 'Scary Movie', a slasher spoof, that tears out the heart of the 'serious' horror film.

Go see a good horror film you'll be surprised how entertaining it will be. The horror film is the stepchild for the movie industry but nonetheless draws in big crowds and has become the second highest grossing movie genre.


  

Highest Paid Actor

Someone you never think of as being the highest paid actor given his low-keyed demeanor and non-limelight life style, but Dwayne 'The Rock' Johnson is that person.

The 'Rock', with now famous brow-raiser.

Dubbed the 'hardest working man in Hollywood' by his peers, Johnson made over $70 million last year.  Audiences love Johnson because he is a 'normal guy'.  If you are a studio exec and want your movie to make mega-bucks hire Johnson.

Starting his career in the Worldwide Wrestling Federation, wrestling promoters didn't know if they should cast 'The Rock' as a good guy or bad guy, so they told him to just be himself. So, he branded himself a potty-mouthed, brow-raising, people's champ.  Then, when the WWF started dallying around with musical acts, their then, biggest star was there to perform and would-up making a hit song called, 'It Doesn't Matter'.

Slowly, Johnson has turned into an actor that blockbusters are made for.  An actor that's not striving for critical acclaim in serious message movies but who just wants to have fun making movies and he's obviously become quite good at it.

With non-stop energy and a goal-driven personality, this year he will complete another series of episodes of the HBO hit-show, 'Ballers', star in the reboots of 'Jumanji' and 'Baywatch', and is now shooting for 'Fast & Furious 8'.

Johnson commands $20+ million per film and has worked himself into a position where he can also get a piece of the film's gross take.  Johnson's salary puts him into the elite, not of Hollywood, but of sports - where he started out as a football player in the Canadian Football League.

Dwayne Johnson is half Black Nova Scotian, and half Somoan and comes from a long-line of professional wrestlers. He was born and raised in Hayward, CA where he still lives.

Studio Only Makes Films Based on Video Games

Marla Studios, launched by ex. Ubisoft CEO Jean-Julien Baronnet, will specialize in adapting video games into movies.

Baronnet helmed Ubisoft for 5 years

There have been very mixed results when it comes to turning games into movies, according to Baronnet, "Studios have had difficulty recognizing the need for the stories in video game adaption to have a universality to them. Most of the time they try to copy the video game's story and/or characters, which is exactly what should not be done."

Baronnet contends, one, that a video game, on average, makes more money than a movie, and two, that the superhero based movie era is coming to an end. "People are starting to tire of the comic superhero, but still have a huge appetite for big franchise films", says Baronnet. And that is where the video game characters come to the fore. Having overseen the development of the very popular 'Assassin's Creed' video game franchise, as well as, production of the upcoming movie of the same name, Baronnet knows lots about game and movie production.

Marla will also assist gaming companies in negotiating movie contracts that will provide them strong creative control - which is missing in the current game-to-movie environment - fostering, in Baronnet's view, poor end results. Marla will staff itself with individuals from both the movie and gaming industries but sees its clients as the gaming companies and not the major studio/distributors.

CMG wishes Jean-Julien all the best and believe he is on the right track regarding both the growing moviegoer malaise with superhero films and the need for the gaming companies to have much greater control over the creative process in adapting games-to-movies.

Jim Lavorato

Jail-time for Netflix Password Sharing

Sharing your Netflix password is now illegal. A ruling by the Ninth Circuit Court of Appeals, last week, made sharing your Netflix password a crime under the Computer Fraud and Abuse Act.

Although the thought of harmlessly sharing your password with family members and friends to save a few bucks seems petty use of our judicial system, the ruling has wide implications.  Anyone divulging their login info for any subscription service, Netflix of otherwise, is now illegal.

Although aimed at more serious cyper-crimes that threaten the security and privacy of corporations' and other organizations' data and internal information, the ruling turns the average Joe into a federal criminal. So, you can no longer play the good-guy, password-sharer role at the expense of the service providers and not be considered a criminal worthy of the toughest penalties under the law.

In reality, people share their passwords, especially in a household.  Even Netflix says, "a household can share an account and users can watch Netflix on up to six different devices."  Neither Netflix, HBO-Go, Spotify or any other media streamer is going to criminally charge a subscriber - but the law allows them to if they wish.

Disney Goes 'Emoji'

Just launched, by Disney Studios, are your favorite Disney and Pixar characters' emojis - almost 400 of them.  This emoji barrage comes in conjunction with a new mobile game called, "Disney Emoji Blitz", where you have to match emojis up (a-la 'Candy Crush') before you can store them to use, yourself, later.

The game, announced by Disney this past Thursday (July 7th) is available in both IOS and Android versions.

These promotions, by the studios, help movie exhibitors as they keep relevant and current the best-loved characters and set the stage for new characters in new films - win/win.

What's Up At The Movies by Seymour Flix

AT&T's Buy-One-Get-One Movie Admission

AT&T, the telecom giant, in collaboration with AMC Theaters and Regal Cinemas (the U.S. number one and two largest cinema circuits) is offering its customers a buy-one-get-one free deal on Tuesday movie presentations at over 13,000 screens.

Limited to Tuesday screenings and valid only for 2D films, the free admission tickets are available only to AT&T wireless customers.  Tuesdays are typically one of the slowest days for cinema traffic so AMC and Regal see this as an opportunity to gain attendance from consumers who never frequent a cinema and which won't impinge upon their weekend attendance.

The AT&T offer comes on the heels of T-Mobile's rewards program that offered a free Domino's pizza, Wendy's frosty, and free movie rental from Vudu - however, Domino's backed out of the T-Mobile promo after the first week because of overwhelming demand. In response, AT&T is capping the number of free tickets given out each week.  A ticket voucher is emailed to the AT&T customers chosen and validated at the cinema's box office when one, full-priced admission is purchased.

AT&T's 'Ticket Twosday' promo (as it is termed) is accompanied by pre-feature advertisements, as well as, concession tie-ins and is part of AT&T's overall customer-loyalty program. The 'Ticket Twosday' promo is scheduled to be expanded in the fall to include free tickets to Live Nation concerts.

 Failed 'MoviePass' Is Trying to Revive Itself

Launched in 2011, MoviePass promised to revolutionize the cinema-going experience - but after 5 years the company (which offers unlimited access to cinemas) is little known and floundering.

Exhibitors, generally, view MoviePass as a threat vs. and ally, but the company just hired a new CEO (Mitch Lowe, co-founder of Netflix) who is determined to convince exhibitors that MoviePass can bolster their admission and concession sales.

Cinemas have done a great job, over the past several years, of upgrading the movie-going experience - digital projection, new seating, improved sound have all added-up and cinema admissions have remained static against  a constant barrage of alternative entertainment options.  The problem with MoviePass is that although it's a good concept, it conflicts with a cinema's own in-house loyalty programs.

MoviePass, which now costs between $30-40/month for one subscriber to view an unlimited number of movies, is moving to a tiered pricing system which will start as low as $20/month for access to a smaller collection of movies and extending to $100/month for unlimited viewing of 2D, 3D, and IMAX films.  Last week, MoviePass sent out information on the new pricing to select subscribers which included a $50 package for six 2D or 3D films and a $99 package for unlimited movies in any format.  MoviePass customers use a phone app and credit card to buy tickets.

For the avid movie fan, who visits a cinema at least once or more per week, MoviePass is a great service, but even for the frequent moviegoers who visits a cinema once or twice a month it really is not cost effective - and that is why CMG believes MoviePass will remain a niche service in the cinema industry.

Best,
Seymour