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Monday, April 06, 2020

Is The Internet Up to the Task?

One of the overlooked benefits to cinemas is that the internet does have capacity limits and it may be reaching those limits now!

Data use is up 27% amid social distancing and there is growing concern from the ISPs that the 'broadband pipe' and infrastructure is reaching full capacity. U.S. homes usage of the internet rose to 6.3 gigabytes or 41.4% in January alone.

Is this going to be the 'new' normal as more and more people stay at home for remote office work and virtual schooling instead of going to coffee houses, bars, restaurants, and other social events, opting for streaming hi-def and 4k video instead.

Netflix, the premier user of the web-pipe, expects streaming usage to be up 61% during February. While Facebook doubled its server capacity over the last two months to power its messaging applications as users placed more voice and video calls on its platform.

There is now widespread concern by Regulators in the U.S. and Europe that social distancing will "break" the internet. The European Commission on Internal Market and Services has already requested that Netflix stream its content in standard vs. 4k HD format. Netflix did agree to reduce its streaming bitrate (for the time being) lowering its usage by 25%.

"This is going to be an enormous stress test for our communications networks," stated Blair Levin of the U.S. Federal Communications Commission. The FCC gave Verizon, T-Mobile, and U.S. Cellular access to the 600 Megahertz spectrum through April, providing extra wireless capacity for data connections.

There is heavy reliance that the ISPs will be up to the task in providing for the huge increase in usage?  CMG doesn't think it is.

I'm sure you've already experienced slower logins, longer data retrieval times, reduced availability of 4K/Ultra HD video streams, and more frequent 'come back later' notifications - all to the benefit of movie theaters. It is becoming very apparent that going to the cinema is really the only way to view a film in high def with great sound.

This unexpected problem of internet capability and capacity is only going to get worse and as it does it provides opportunity for movie theaters.

Note: I had several infographics for this post but Google couldn't connect blogspot to my PC - requested I 'come back later' - it's already started.

Just saying,
Jim Lavorato

Wednesday, March 11, 2020

Bernie? "I hardly knew Him"

"Bernie WHO? I hardly knew the guy." This is what's being said throughout t Hollywood, Belair, and Beverly Hills today.
Weinstein as he left court upon sentencing of 23 years.

From the top of the Hollywood heap to the rank dampness of Rikers Island that's how far Bernie Weinstein has fallen. And Bernie will be rising damp for the next 23 years.

Sentenced in New York State Superior Court today by Judge James Burke, a jury had previously convicted Weinstein of one count of sexual criminal assault and one count of 3rd degree rape.

Although his defense pointed out to Judge Burke all of Bernie's charitable works, his age (67) and poor health it all fell on deaf-ears. as the Court imposed the 23 year (basically, life) sentence. Weinstein's legal woes; however, are not over. He still has to appear in Los Angeles where he is facing 5 more counts of criminal sexual charges.

CMG believes that this may be the end of the 'casting couch' by moguls in the film industry - as the price to be paid is too great and the #metoomovement is not over.

Jim Lavorato


Thursday, February 27, 2020

Finally The Verdict: Weinstein 'Busted'

Is the casting couch dead?
CMG has been following the Harvey Weinstein sexual assault lawsuit for several years. We watched as Harvey finagled and postponed the process every way he could - changing his law team three times, promoting health issues and a heart condition to gain more time and jury sympathy, and contending that all charges against him were false as all of the sexual acts were consensual.

Finally, all of the legal maneuvers and court manipulations ended on Monday when Harvey was convicted on two of four indictments in a NYC court. The first count carries 5 years while the second (3rd degree rape) up to 24 years, his sentencing will be next month. As one would have expected, right after his conviction, Harvey complained of chest pains and was sent directly to the Rikers Island Prison hospital.

After his sentencing in New York, Harvey will be extradited to Los Angeles where he faces five more counts of sexual harassment and assault.  Old Harv could wind-up with over 175 years, if convicted. After Monday's sentencing Weinstein's attorneys made a statement that their client "took it like a man" and "was completely shocked by the verdict".

The #metoomovement was the force behind Weinstein's conviction and we may well be witnessing the end of the Hollywood 'casting couch'.

Jim Lavorato

Tuesday, February 11, 2020

What Do Viewers Want

Bold and binge-friendly 'cinematic-look' content that is edgy and gripping - these are the new criteria consumers are looking for and producers striving for in content delivery. Content must be smart, well-written, and perfectly executed. The content game is upping the ante every day for writers and directors.

While broadcast and basic cable must still answer to advertisers who may be unhappy about risque' content, it's clear provocative content is becoming the norm throughout the entire spectrum from cinema to regular broadcast.

 X Football League : Getting the viewer involved.
The entertainment landscape is changing. It is getting wider, deeper, and much more competitive. Players in the arena range from Verizon to Twitch and everything in-between. From movies to eSports it's all about getting consumers to watch, and (now) participate in (ie. the new XFL U.S. football league) and become engaged with.

Tiered admission pricing must be given great consideration!

Cinema has been entertaining the 'masses' for over 100 years and I see no end in sight for this 'viewing' venue. With the tsunami of content being produced there is no shortage of product for 'cinematic' viewing. The trick is that cinema exhibitors must embrace a wider variety of content sources and choose which best 'fits' their local audience. Screening movies from a handful of Hollywood studios will spell doom for movie exhibitors. They must partner-up with ALL of the content providers in the expanding entertainment landscape.

Additionally, the issue of tiered admission pricing based upon the movie must be given great consideration. Charging different admissions for different movies is a sound one with lots of retail marketplace precedent, and which fits in perfectly with the offering of a wide variety of content from various sources.

For cinema exhibition to remain viable and profitable operational change is required. 

Jim Lavorato, President, Entertainment Equipment Corp.

Monday, February 10, 2020

Academy Museum: Sort of Opened

It is only fitting that I write a follow-up on the Academy Museum of Motion Pictures on the day of the 2020 Oscar presentations.

Museum as it now stands.

Located at the junction of Wilshire and Fairfax Boulevards in L.A., I've been following the progress of the Museum for several years, highlighting one issue after another that postponed its opening - not the least of which was a funding shortfall of several hundred million dollars. Finally, on Friday, it was opened for a press tour - no official opening has been announced.

Just six months ago, construction was halted and plans redrawn to make the facility smaller due to a lack of funding. A campaign to raise the "new" budget requirement of $388m to complete the 'downsized' project was met as $368m was received in pledges and cash.

Construction on the Museum began in October of 2015 and was originally  scheduled to open by the end of 2016. Fast forward to 2020 and five years later it is scheduled to open by year's end.

 The Museum will feature a 1600 seat auditorium where 35mm, 70mm, and digital films will be screened. A smaller 288 seat aud will also screen content and run exhibit features on the history of the cinema. The Museum's main feature is a large, death-star shaped atrium/lobby, ample exhibition spaces, a restaurant, and retail space are also included.. Admission pricing has not been announced.

Jim Lavorato, Founder 4M Performance

Tuesday, February 04, 2020

#OscarsSoWhite : How'd That Work Out

Oh, how soon they forget. Remember the big movement by the Academy of Motion Picture Arts & Sciences to 'diversify the Oscars' because they were too white, too straight, and too white-man dominated.

The Academy confronted its lack of diversity by adding thousands of new members of color, female,  and bringing in hundreds of filmmakers hailing from outside the U.S. - that was 2019.

Enter 2020. Diversity is hard to find at the Oscars. Of the 20 acting nominations, only one is a person of color. So even with thousands of new 'diverse' voting members  we're back to square one as these new members didn't vote based on diversity but on merit - as is should be.

There are two disruptive trends going in the movie business:

First, that there is a tremendous amount of production going on with both the studios and the streamers pumping out content like there is no tomorrow.

Second, it is getting less and less costly to produce a feature film. All that is required is a decent script, a bit of grit, and an iPhone.

2019 was the hallmark of the low-budget indie film. Whether this is sustainable is anyone's guess. It appears that the digital effects-packed films garner the majority of  cinema admissions. This all forces the award-givers, like the Academy, into a quandary: embrace inclusion or go for engaging entertainment?

One man's disruption is another's breakthrough. The tide is turning back to the relevant vs. the must-dos. The social cause makes for poorly viewed content. Most thinking folks are aware of the social and environmental issues and they don't need constant reminding. What they seek is high-quality, engaging entertainment.

Just saying,
Jim Lavorato 

Monday, January 13, 2020

Movie Theaters Will Survive

Movie theaters have fought and survived the introduction of the TV and the DVD.  It is now under siege by online content streaming. This current battle may well be its toughest but in the end will come out the victor - here's why. 

The End of Cable TV

Cable TV operators know their future lies in providing the internet pipe and all the benefits it will gain as 5G becomes the norm. Consumers have been cable-cutting for some time as they move to the internet for all of their in-house and mobile entertainment viewing (some 6.2 million are expected to cable-cut in 2020).

This year is pivotal, as subscription service providers (Netflix, Disney, Hulu,  CBS, Amazon, and all the others) will need to outlay billions on new content, placing a great strain profits. This will necessitate that advertising be introduced to streaming content to support static subscription fees.

Additionally, cable TV operators have begun to embrace streaming on their own by aggregating content. Comcast, for example, added Netflix and Hulu, to its 'XI' pay TV platform and recently launched FLEX, a free service for broadband only subscribers. that bundles free streaming apps with high-speed internet access.

Pressure to control costs is driving two significant trends: globalization of content and advertising becoming a permanent part of the streaming content viewing experience.

Adding Ads to Streamed Content
The subscription service universe is becoming very crowded.

TV remains the most efficient and best way to get a message out quickly to large audiences.  However, TV ad load is declining as advertising moves to social media and streamers - which is expected to reach $25 billion by 2024 with $17 billion of that going to subscription based platforms.

Consumers clearly like the choices offered by the streaming world but surveys have shown that 42% of those 18-49 are finding that managing the complexity of all their online subscriptions presents a problem and they are not willing to spend huge sums on these services. Therefore, streamers are experiencing consumer resistance to higher monthly fees and the continued addition of more channels by users.

Content streamers came to market with very aggressive pricing and now are coming to terms with the economic realities of producing content and turning a profit. Pressure to control costs is driving two  significant trends: globalization of content and advertising becoming a permanent part of the streaming content viewing experience.

4M Performance - Coming Soon

Movie Theaters: The Winners

Let's recap.

- The content streaming industry is getting very crowded.
- There will be a lot of inferior content produced as the cost of quality content rises.       
- Streaming subscription fees cannot be raised to cover increasing costs of production
- Consumers are saying they are limiting their subscriptions to $44 per month at 3.6 services.
- Subscription based channels will need to raise revenue through advertising and product placement.
- The broadband service providers have already begun to offer aggregated content packages to offset
    the impact of cable-cutting.

Given all of the above, it is not a stretch to infer that movie theaters will continue to be the venue in which to view the very best, highest quality content in the very best way. And, it is not unwise to believe that the studios see movies as their best way to distinguish themselves as the providers of top quality content.

The cinema will survive the current battle against the streamers and may, quite likely, come out on top as the best place to experience top quality, ad-free content (sans pre-feature ads).

Jim Lavorato, Founder
Entertainment Equipment and 4M Performance

Tuesday, January 07, 2020

Cinemas as Wedding Destinations

Saying 'I DOs' at the Alamo Cinema - 'Star Wars' style
Whatever gets butts into seats. Your cinema as wedding chapel.

At least that is what the Alamo Drafthouse movie chain recently did with two 'Star Wars' themed wedding ceremonies at their cinema in Austin, TX.

It seems both couples have viewed 'Star Wars' films over the years at the Alamo - so the thought was to celebrate their fandom and love with an exchange of vows at the cinema.

Certainly not in the cards for most CMG readers, but it did get people into the cinema (which also catered the events). The weddings featured mini Oscar place cards, macaroons instead of cake, and a special screening of  'Spaceballs'.

It appears that Alamo has discovered a new, be it off-beat, revenue stream by being offering wedding planning and related services - including receptions, rehearsal dinners, and post-wedding to-dos.

Whatever it takes,

Jim Lavorato
Founder, Entertainment Equipment Corp.