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Friday, March 31, 2017

Cinemacon 2017 - What I Learned

Disney Played It Close To The Vest

Coming off its roughly $7b box office take of 2016, Disney played it very safe in previewing its 2017 roster of movies. It gave attending movie exhibitors at CinemaCon a very short, sneak-peek of its upcoming films that lasted only 12 minutes!

The major studios attend Cinemacon, the movie exhibition industry's annual back-slap, to showcase their upcoming, big-screen product with trailers, A-listers, and full-length previews - but not Disney.

This year, Disney's dog-and-pony was a recap of 2016, referencing its unrivaled box office performance and renewing its commitment to producing a few big blockbusters from its Marvel and LucanFilm offspring, coupled with product from its in-house animation arm and Pixar.

Disney's goal is, "To deliberately engage audiences with branded product from the greatest storytellers alive. We give audiences what they want", Dave Hollis, Disney Distribution Head, told the Cinemacon attendees.

Exhibition 'Biggies' - Is That The Way To Go?

Of the top 35 global movie theater chains only four are U.S. circuits. Boxoffice Magazine compiled the ranking and it was hands down dominated by China, with 19 of the top 35 spots.

For the U.S.:
 - Regal Entertainment Group, ranked 2nd in size globally with 7,310 screens (all located in the U.S.).
 - CineMark ranked 4th with 4,542 screens but unlike Regal has cinemas in not only 41 U.S. States but in 15 Latin American countries.
 - National Amusements earned the 26th slot with 924 screens.
 - Marcus Theaters at 29th with 875 screens.

And that was it for the U.S.. China's Wanda Group was 1st with 14,040 screens spread across China, Europe, and the U.S. Beijing New Film Association took the 35th slot with 655 screens. Now, one may think that this ranking by screen count is bad for the U.S. but it isn't, in fact, it bodes well for the U.S. Think about it.

The top four largest U.S. circuits represent only 13,651 screens out of a total U.S. screen count of about 42,000. Meaning that the smaller cinema circuits and independent theater operators are well represented and point to a robust and very diverse cinema exhibition industry.  This is good news for the U.S. moviegoer. Unlike China, where it's all about big chains screening big box office bruisers, U.S. exhibitors offer-up independent films, documentaries, art house fare, alternative content, film fest entries, retrospectives, and yes,the big bruisers. Go U.S. exhibitors.

New Tech for Cinemas
QSC's DPA-Q Amps come in 4 and 8 channels

CinemaCon's trade show and product demonstration suites showcased cinema sound. Power amplifiers were the big news. The 2 channel amp for cinema sound is going the way of the DVD player, replaced by multi-channel amps boasting 4, 8,24, and even 32 channels.  Cinemas are entering a new era in sound. Sound which cannot be replicated in the home.  Spurred on by the Dolby Atmos system the days of the 5.1  and 7.1 channel cinema sound systems will become extinct.

QSC Audio, now QSC Cinema, recently purchased Ultra Stereo Labs.  This is a prudent and wise move for QSC as it broadens its product line with a brand that is well known in the cinema industry for manufacturing excellent and useful products of high technical quality.

Also very noticable was the large number of seating manufacturers all pushing plush auto-recliners. Again, the idea is to make movie-going a unique sight and sound experience coupled with comfort food and seating. Retrofitting existing auditoriums with new comfy recliners lowers seat count but the trade-off in customer satisfaction is well worth it, as is the expense.

All the best,

Thursday, March 30, 2017

Cannes 70th

I always look forward to the official poster the Cannes Festival puts out - they are, by far, the best graphics of any festival.

Celebrating its 70th year, the 2017 poster is a standout.  It is a 1959 photo of a dancing Claudia Cardinale against a stunning red backdrop with gold lettering and highlights. The poster makes a great statement and puts forth an image of a vibrant and modern event but one rooted in history.

The 12 day Festival will run from May 17-28.

The list of Award nominees has not yet been issued but the Cannes roster of films is usually a blend of the exotic and commercial spiced-up with the political and controversial. We look forward to selecting our favorite Cannes movie posters which has become a CMG annual to do.

Monday, March 27, 2017

In Cinemas and On-Demand

It is Monday morning.  I'm packing for the trip to Las Vegas to attend CinemaCon. This year will be most interesting as the battle for day-and-date movie releases is really starting to ramp-up.

Several of the majors, led by Universal (owned by Comcast) and Warner Bros. are pushing hard to shorten the exclusive theatrical release window that movie exhibitors now have. Their opening proposal was for cinemas to have exclusive screening rights for 7 days, after-which the movie would be made available via on-demand streaming for $50 - a portion of which would be shared with the exhibitors.  This option was DOA with the exhibitors and the other major studios thought the $50 fee was too high.

Next, Fox and Warner Bros. proposed making films available between 30 - 45 days after debut, but at a  $30 rental fee. At $30, the studios feel consumers wouldn't cringe at the price. Universal (which is the most aggressive of the studios) doesn't like the 30-45 day rule and wants the time to be, at most, 20 days.

For years, CMG has asserted that it was only a matter of time before movies would be made available day-and-date across all platforms so it should come as no surprise to exhibitors what the studios are proposing.  The studios are searching for ways to replace their lost DVD sales to internet streamers Netflix and Amazon - but this is a losing battle for them.  We are in the throngs of a massive change in the way consumers obtain their entertainment.  People want to be able to access content whenever they want, on whichever device they choose. Sitting home and watching a film for a one-time charge of $30 or $50 is not satisfying that need.

For their part, Lionsgate, Paramount, and Sony have been in discussion with the major U.S. cinema circuits on a new proposal. Disney, standing alone, has no interest in shortening the release window because their films tend to have long runs in cinemas and are of the size and scope that exhibit really well at cinemas with their large screens with big sound.

Under current Federal Anti-trust Law, the studios cannot negotiate (collude) together on a release window proposal.  They have to negotiate and reach agreement with each participating exhibitor.
So, no deal is imminent. Exhibitors are particularly concerned that movies are offered to consumers too early and at too low a price prodding them to stop visiting their local cinema.

Exhibitors are firm on one point. They want to be assured the studios agree to keep the release window for lesser films (non-blockbusters) at 90 days and that the current model of distribution be kept in place for between five to ten years.

Given the fact that at some point movies will be released day-and-date, and not be beat a dead horse, but exhibitors must, must have their movie presentations in top-order and use showmanship in connecting to the local community, selling concession, and promoting films. It's the only way they will survive.

All the best,

Sunday, March 26, 2017

Cinema Stats For 2016

I know we are well into 2017 but a quick look-back to last year's box office performance is worth a glance.

The global box office reached $38.6b in 2016, with the U.S. and Canada's share totaling $11.4b. The number of screens rose 8% to 164,000 worldwide - due entirely to growth in Asia.

Admissions were 1.32b in the U.S. and represented 246m people who purchased a movie ticket. Frequent moviegoers (those that visit the cinema one or more times per month) accounted for 48% of ticket sales.  This group, coincidental, owns more electronic devices (smartphones, tablets, gaming consoles) than any other group.

The number of films released in the U.S. totalled 718, 579 of which were released by independent filmmakers. 3D films generated $1.6b representing 14% of the total box office. The average ticket price was $8.65 up 22 cents or 3% over 2015.  For a family of four the average price of admission was $34.60, which compares very favorably with other forms of group entertainment. For example, admission to a theme park would have averaged $233, a major league baseball game - $124, an NFL game - $372.

Demographically, Hispanics had the highest level of movie attendance as a group, purchasing 21% of all admissions while only 18% of the population. Women attended the movies more than men, with 52% of ticket sales. The 25-39 age group purchased the most tickets with 23% of all admissions.

For 2016, the top grossing 25 films accounted for, a huge, 52% of the total box office - with the top 5 films grossing 18% of the total.

In summary, 2016 was a static year for the U.S. cinema industry. Growth came exclusively from foreign markets, principally the Asia/Pacific region and Hollywood continues to base its survival on but a few blockbuster films. This trend will continue into the future and competition from home theater and mobile devices will intensify.

Data per the Motion Picture Association of America 

Thursday, March 23, 2017

The SCOOP by Seymour Flix

FilmOn Gets Hammered By 9th Circuit Court

The 9th Circuit Court of Appeals unanimously rejected FilmOn's concept of streaming broadcast TV and movies over the internet free from paying for the content but charging a user subscription fee.

FilmOn argued that it should be allowed to stream broadcasted content free or for a nominal fee under an exception to the Copyright Act of 1976 - the 9th Court didn't buy it.

The three judge panel ruled that Congress did not envision that the exception to the statute would apply to internet-based distribution and reinstated a copyright claim against FilmOn overturning a lower court ruling.

The plaintiffs in the case: Fox, NBC, CBS, and Disney were very relieved.  The Court had deferred to the U.S. Copyright Office, which has consistently found that "internet-based services do not qualify as cable systems under the law".  Therefore, FilmOn can not distribute TV or movie content without permission from and full payment to the content owners.

FilmOn currently streams licensed content which it will not be able to do going forward.  This essentially puts FilmOn out of business. To counter, FilmOn issued a statement saying it would continue two similar cases one currently before the D.C. Court of Appeals and another before the 7th Circuit Court of Appeals. If losing in these cases, it intends to appeal to the Supreme Court.

CMG believes this is a losing battle for FilmOn as their actions essentially boarder on content piracy. It will lose in both the D.C. and 7th Circuit and if they do go to the Supreme Count the case will not be heard and the three Appeals Court rulings will stand.

Netflix's Quest for Day-and-Date Distribution with Theaters
Netflix CEO Reed Hastings

According to Reed Hastings, CEO of Netflix, "movie theaters haven't innovated beyond popcorn in the last 30 years." In an interview at the company headquarters in Gatos, CA. this past Tuesday, Hastings didn't mince words regarding the "cinema's need for a new distribution model that could do for movies what cable networks and online services have done for TV shows. Netflix wants to unleash films. It's about growing the movie business."

He pushed back on the idea that Netflix's goal is to bypass the theaters' exclusive release window for new movies and stated Netflix has struck a deal with iPic Entertainment, the small, exclusive dinner theater chain that will screen Netflix produced films day-and-date with their online release.

This does two things for Netflix: first, they enjoy their day-and-date movie release and second, those films can now qualify for Academy and other awards' consideration.  So, their tie-in with iPic is a win-win for Netflix.  iPic, for their part, is pissed-off at the major studios and large cinema circuits because they say they are shut-out of screening the openings of first-run movies, particularly block-busters, because of collusion between the studios and large chains (CMG has previously reported on this non-compete practice and it is true).

CMG believes, and has stated for years, that eventually all content will be available on a day-and-date release basis. Netflix's deal with iPic is just the beginning.0

Seymour Flix

Saturday, March 18, 2017

Fandango's FanShop: A Bit Too Late

As it looses its grip on the movie ticketing service, Fandango is searching for new ways to keep its game. Facing competition from both the major theater chains (which now boast their own sophisticated on-line ticketing and concession services) and from upstarts like Atom Ticketing and others, Fandango is scrambling. One way Fandango believes it can make up for lost ticket sales is to market movie related products such as T-shirts, posters, and other paraphernalia through a newly launched e-commerce site called the FanShop.

The problem with FanShop, is that it is going against giants in the e-commerce space, notably Amazon and Walmart, which both sell film-based swag of all sorts. CMG believes that although Fandango intends to differentiate FanShop from others in the retail space, by offering unique products and services, it is a losing endeavor.

Fandango has been trying to bolster it ticket sales business by transforming itself into a hipper, edgier entity catering to a younger consumer. Last year it purchased Rotten Tomatoes, the movie rating service, Flixster, a social media and ad site for "all things movie", and Movieclip, the YouTube movie channel.  These are all nice on-line sites but are a bit yesterday. Rotten Tomatoes has been around since ever, Flixster has uber-competition, and Movieclip, well, join the crowd.

FanShop's core products will be apparel and collectibles (no great shakes) but it will also be marketing special celebrity meet-and greets and movie premiere events. Now, these services would place FanShop in a unique space - but these specialized services must be executed precisely and efficiently. Geared for the rabid fan who is willing to spend the requisite bucks for a personal meet with their favorite celeb or for those movie fans wanting to attend a debut screening - there is a new, and developing market for these services. But, is there enough demand to turn these services into big-dollar generators?

CMG believes Fandango has no choice but to expand is services to the moviegoer/consumer but it is in a long-term losing battle. It's on-line ticketing business is being hammered, movie apparel and collectibles are everywhere, entertainment-based social media sites are ubiquitous, and all moviegoers are instant film critics to their friends, family, and acquaintances.

Just saying,


Monday, March 13, 2017

The SCOOP by Seymour Flix

Death of the DVR

Unless a cave-dweller, you're aware that the old, trusty, hard-wired to your TV,  DVR has been on a steady death-march.  Now, its demise has become official.
The DVR/DVD era is coming to an end

A recent survey reports that 64% of American households use Netflix, Amazon Prime, Hulu or other network streaming service from which to receive their in-home entertainment. Only 53% reported having and using a DVR. The decline and extinction of the DVR is inevitable. More and more media will be stored, shared, and accessed from the cloud, with streaming services dominating the home entertainment space.

The survey, conducted by the Leichman Reserarh Group, surveyed consumers 18 and older. A full 54% of them reported that they are Netflix subscribers of which 23% stream Netflix daily. 10% more reported they also subscribe to another or additional streaming service.

The era of the DVR is closing. Purchasing a DVD will go the way of the music CD. Yes, they will be available but not of primary importance for movie viewing as they once were.

Avatar Release Postponed

'Avatar's' sequel has been postponed to 2019. 'Avatar 2', the highly anticipated follow-up to the highest grossing movie of all time, will miss its scheduled December 2018 release, so says its creator James Cameron.

To be the second in a series of four new films, Cameron says, "what people have to understand is that this is a cadence of releases. So, we're not making 'Avatar 2', we're making Avatar 2,3,4 and 5. It's an epic undertaking that will consume the next eight years of my life."

'Avatar' grossed $2.8 billion and won 3 Oscars in 2010.

SXSW - Just Another Film Fest

SXSW (South by SouthWest for those of you asleep at the culture wheel), is the Austin, TX film fest that opened on Friday and runs through March 19th.

I'm not sure if even the most rabid movie fans need another, so called, 'great film festival'. There appears to be a race going on between film fests and award shows as to which will number the most - and the more there are the less relevant each becomes.

According to Janet Pierson, head of SXSW, "We specifically try to stay away from stuff that's too broad. We want the filmmakers view."  To that end, SXSW includes not only big screen but made for TV content as well.  Documentaries also play a big part of SXSW's 8 day agenda.

Let's face it. There is just too much content being produced. most of which is marquee or TV guide fodder. 99% of what will debut at SXSW will never see the light of a movie or TV screen.

Running 8 full days demands a lot of content and makes one wonder how good this stuff really is? Besides the filmmakers themselves and their friends, family, and acquaintances, plus the budding want-a-be filmmakers with their FF&A who actually shows up at these festivals.

Best, Seymour

Sunday, March 12, 2017

McQueen's 'Bullitt' Mustang Found

Can you believe it! The 1968 Mustang GT  Steve McQueen drove in 'Bullitt' has been found, or has it?

The Bullitt jumper car being restored
Disappearing shortly after filming and despite McQueen's efforts to locate and purchase it, the car hasn't been seen since.

Now, two auto restorers say that they found the car in a scrapyard in Baja, CA. and towed it to their bodyshop in Mexicali, Mexico where they have begun restoration.  After running the VIN number, Ralph Garcia, Jr. one of the owners, discovered it was the famous missing 'Bullitt' Mustang. The authenticity of the car was further verified by Ford expert evaluator Kevin Marti.

Marti told CMG that there were two identical cars used in the filming of 'Bullitt'. A "hero" car that was used for casual driving, and a "jumper" car that was used for the dramatic chase scenes, some of which involved airborne launches. "This is the jumper", Marti says, "based on documents obtained from the film, and the alterations that were made to the car's suspension system. The "hero" car is in the possession of an anonymous U.S. owner."

Ken Gross, noted car historian, values the Mustang at over $1 million but Garcia says it is not for sale, and is headed for a complete restoration. Marti said, "What Garcia has done to the car has already diminished its value. When I first spoke to him, I advised not to do anything before the car was evaluated, but that advice was not taken. It is worth more to true car aficionados in its raw, unrestored state."

So, the missing 'Bullitt' Mustang GT has been found, now it's time to start looking for James Dean's Porsche 550 Spyder.

Thursday, March 09, 2017

Child's Play : A Kiddy Cinema

Auditorium with front play area
Cinemas have tried lots of ploys to lure moviegoers, the latest being premium dine-in theaters. Now, a new concept is making a play for enticing audiences (young ones) with the Kiddy cinema.

Called Cinepolis Junior, after the Mexican Cinepolis theater chain that is championing it,  the concept is to devote auditoriums exclusively to children.  The seats are brightly colored and the concession is an array of children's snacks.  Bean bag seating is available as well.

But wait. Cinepolis goes further - the auditoriums are outfitted with slides, rubber ball pens, and teeteers. The play areas are open 15 minutes prior to and after showtime but "house lights are left on for the entire show so restless children can roam and play."  Is this an unbelievably horrible idea or what!

Bean Bag seating anyone?
Now, I know, as well as you, that cinemas are looking for any marketing ploy to increase admissions but the kiddy cinema completely spits in the face of what going to the movies is all about.  But, perhaps we should have anticipated this. The dine-in theater concept, which has been fully and successfully vetted by the Alamo Drafthouse movie chain, appears to work for some moviegoers. Alamo, where full-out dining is allowed but cellphone texting and talking during the film is prohibited. So, it's ok for the patron next to you to be dining on fried chicken with biscuits and gravy but texting gets you ban from the theater. What's up with that, Alamo?

Cinepolis, betting a lot on the Kiddy concept
Dining aside, jungle gyms in cinema auditoriums are pushing the envelope into the crazy zone. Children are chaotic. They need guidance, not a free-for-all environment. What works for children very well in the back-yard or play park is not appropriate for a cinema - where the movie is central.  I pity the kids who go to enjoy the film only to be completely distracted by others playing in the aisles.

Cinepolis is putting lots of  money behind the 'kiddy cinema' concept. In addition to Junior screens in Mexico it is opening Juniors in Los Angeles and San Diego on March 18th. Let's see how they do.  

Monday, March 06, 2017

Catering The Academy Awards

Wolfgang Puck moved to California from Austria in 1975 and began his journey through the restaurant industry.  He earned fame from the food he created at Spago and Hotel Bel-Air and moved on from there.  His food-based empire now includes over 20 restaurants, 80 Wolfgang Puck Express franchises, and a line of up-scale retail food products.  He is also the official caterer for the Academy Awards Ball.

Puck at work
Puck, who has a star on the Hollywood Walk of Fame, says, "The Academy Awards is the premiere event in Los Angeles. If we don't do a great job, then people won't come to our restaurants." This year Puck's inspired menu included: Moroccan spiced Wagyu short ribs, Parmesan funnel cakes, taro shrimp tacos, lava cakes, caramel cappuccino Oscar lollipops, and lobster corn dogs. Truffles were used lavishly this year. There was gold-dusted truffled popcorn, truffled chicken pot pie and mac-cheese with black truffles. "There was a lot of comfort food. The guests like that" says, Puck.

In addition to the Academy guests, Puck feeds all of the Academy workers, including: security staff, waiters, and musicians - a total of over 3,000 people. This required: 30 gallons of cocktail sauce, 350 lbs. of smoked salmon, 250 lbs. of Parmesan cheese, 3,600 eggs, 6,000 brioche buns, 30 lbs of edible gold dust, 1,400 bottles of champagne and 2,000 bottles of wine.

The Wolfgang Puck brand is well-known across all age groups and demographics and he has no plan to end his relationship as caterer to the Stars.

Our best to Wolfgang,

Saturday, March 04, 2017

Studios 'Back' LA Olympics for 2024

Rome is out. Only Paris and LA remain.
Los Angeles and Paris are the two remaining cities in contention for the 2024 Summer Olympic Games, and the major Hollywood studios are lobbying hard, behind the scenes, to see that LA gets the nod.

The City of Angels has hosted the Summer Games twice before - in 1932 and 1984 - and both the city's politicians and the studio honchos want a sequel.

Casey Wasserman, Chairman of the LA Olympic Committee, told CMG, " Hollywood is a dream factory and creator of stories that entertain people worldwide. The linking of the Games and Hollywood is a dream come true."  Disney, NBC/Universal, Warner Brothers, and Fox have all thrown their considerable political and financial weight behind the movement to get LA approved. Termed 'LA 2024' the movement strives to connect Hollywood and the Olympics in a powerful engagement that would be unequaled by any other hosting contender, i.e. Paris.

The LA City Council has already approved a series of guarantees required under the International Olympic Committee's bid process, including a guarantee to cover cost overruns.  The LA 2024 Committee and the City's mayor and Council believe that the hundreds of millions that would come to the City in the form of tourism and related revenue would more than offset the cost to host the Games.

If selected (and there is a very good chance it will be) the Games would be held from July 19 - August 4, 2024 at venues throughout the City.