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Thursday, August 20, 2009



As a follow-up to a previous CTC Report - "Redbox Battles Hollywood" - the Redbox story continues to provide a perfect example of my long-held premise that it is distribution and not content that is King in the digital domain. And, like Redbox, it is the unpredicted, unforeseen distribution game changers which provide the dynamic impact (re: music - iTunes, publishing - Kindle, communications - Twitter).

Since last reported, Redbox is flooding Walmarts, McDonald's, 7-Elevens and Supermarkets with video kiosks renting the latest DVDs for $1 per day, and continues to put Hollywood studios and video rental giants - Blockbuster and Netflix - in a tizzy.

Last week, USA Today reported that Redbox will have 22,000 kiosks in all 48 mainland states by year end. That equates to over 150 million people passing within 10 feet of one of their locations each week and a predicted doubling of their DVD rental revenue to $780 million in 2009.

Redbox works on the premise of consumer convenience. No membership is required. Renters can return DVDs to any location, can use a website to see what movies are in stock at any kiosk and can reserve a selection at a particular kiosk. Needless to say, the Redbox model is not good for the Hollywood studios. Chase Carey, President of News Corp. and parent of Fox Entertainment stated, "Our DVD product rented at a dollar is grossly undervalued. It is a real issue. And we're actively determining how to deal with it." If consumers figure it's only worth $1 to view a movie at home - instead of the $4.50 or so charged by rental chains and video-on-demand - then it could "cripple the economics of today's movie business" where home video rentals and sales account for half of Hollywood studios' revenue.

As we previously reported, Universal Pictures was the first to fight by insisting Redbox wait 45 days after a DVD is released before renting it. Redbox sued claiming Universal was guilty of violating antitrust and copyright laws. Fox followed, by instructing video wholesalers to wait 30 days before selling its new releases to Redbox. But, in what is very apropos for Hollywood, the studios are divided. For example, Disney is supplying new releases and Sony has agreed to a 5 year contract with Redbox on the condition that Redbox destroy all used DVDs. Lionsgate has also signed a 5 year deal. "It's difficult to fight against a consumer trend like this," says David Bishop, President of Sony Pictures Home Entertainment.

And, just today, the Wall Street Journal reported, that Warner Bros. (with a struggling DVD business) announced it will be selling DVDs to kiosk vendors (read Redbox) directly vs. thru wholesalers and stipulating that all DVDs sold to kiosk vendors cannot be placed in kiosks for 28 days. But the studios are fighting a losing battle. For as with Universal's 45 day exclusion Redbox can side-step Warner's restriction by purchasing DVDs at retail.

Redbox has changed the entire video-rental game - it was an unforeseen and unpredicted game changer. Hollywood controls worldwide movie distribution only because movies are on film, once movie exhibition converts to digital that control will be lost. Could Hollywood be that stupid?


What a great segue. The Redbox saga vividly points out the rapid changes that can occur in any industry and why it is so very important that each exhibitor keep up-to-date with the goings-on in the cinema industry. One very easy and inexpensive way to do this is by attending or sending staff to CTC for training (and knowledge). CTC is where you'll get the latest information and learn the most current trends and technology impacting movie exhibition. Sign up now for the upcoming September workshops - call 800-448-1656.


The paper book is under siege as electronic (digital) publishing grows - in the U.S. ebook sales hit a record month high in June at $14 million, a 136% increase over June '08 results.

Amazon's Kindle leads the pack but other ereading devices are on its heel. Last week, Sony (which sells ebooks under its Reader brand) announced it will market two new, less expensive devices (one selling for just $99) and that it was dropping its price for new book releases and best sellers to $9.99. Later in '09, it will begin selling another reader that (like the Kindle) will allow users to buy ebooks wirelessly.

However, the bigger scoop is that Sony, in partners with Adobe, will sell ebooks only in the ePub format (an open standard but one which restricts how often ebooks can be shared and copied). Sony, Adobe, and the publishing industry want to avoid the rampant piracy they fear will occur as ebooks proliferate and also prevent Amazon from doing a replay of Apple's "lock-in" domination of the digital music business. For its part, Amazon is introducing versions of the Kindle software for the PalmPre and other reading devices while Apple (not to be left out) will shortly be introducing a tablet computer that will also function as an ebook device.

When will Hollywood learn that the digital domain is their worst nightmare.

Wednesday, August 19, 2009



Don't forget that Early Registration for the September CTC Seminars and Workshops goes until August 15th. You can save up to $70 per course simply by registering early - so if you are planning to attend any of the September Programs - register soon and save $'s.


Due to the amount of interest received by exhibitors we will be conducting the "Theatre Design & Planning" Workshop this September. Prompted by the interest in 3-D presentations and alternative content such as the opera, stage plays, and other events the need for re-design of interior and projection room space and the upgrading of seating, screens, and sound systems come into play. The one day "Theatre Design & Planning" Workshop will be held on Wednesday, September 16th. For a thumbnail of the workshop go to our website: gotoeec.com or request a CTC Guidebook.


According to a recent survey, only 1 out of every 5 moviegoers decides in advance of its release to see a movie. Most moviegoers - about 70% - either pick their movie the day of its release or on the day they are going to the cinema. 8% say they decide what to see when they actually arrive at the cinema - suggesting that in some cases there is always a film playing they are willing to see.



EPEAT (Electronic Product Environmental Assessment Tool) - a consortium of retailers, manufacturers, and federal and state government agencies - rates the environmental friendliness of all types of computer equipment and soon will be instituting a rating/labeling system that will let consumers know how much lead, mercury, and other toxic substances are contained in the TVs they purchase. Considered a step-up from the EPA's Energy Star labeling because of its comprehensiveness, EPEAT-TV will go into effect in 2010 - watch for it.


August is the peak water usage month in the U.S. The average American household uses 260 gallons of water per day - but that climbs to over 800 gallons per day during August with some households using as much as 1500 - 2000 gallons. Fresh water is fast becoming our nation's most valued asset so here are some tips to reduce wasteful use:

- Water lawns only in morning or evening and only when needed
- Place careful watch on automatic lawn/garden sprinklers and watering systems
- Consider upgrading to EPA - WaterSense labeled toilets, faucets, and accessories which use up to 40% less water than older fixtures
- Never run tap water until it is cold for drinking - refrigerate it
- Fix any leaking indoor or outdoor faucets or spigots

Just doing these five simple tasks can save a household hundreds of gallons of water and never be noticed.

Thursday, August 13, 2009



Redbox, with more than 15,000 DVD Kiosks (and installing new ones at a rate of 8 per day) at supermarkets, restaurants, and discount stores is in a battle with Hollywood. Increasing taking away market share from Netflix, the mail order DVD company, Redbox charges only $1 per day for DVD rentals. Each Redbox Kiosk carries 700 DVDs and 200 titles, mostly the latest releases. However, they also sell DVDs for $7 sometimes in less than two weeks after release which prompted Universal Studies Home Entertainment to instruct Redbox to destroy the used DVDs vs. selling them. Redbox has now sued Universal for violating antitrust laws. Meanwhile, Redbox's success has motivated Blockbuster to team up with NCR (of ATM fame) to open 10,000 DVD Kiosks of their own.



Parents are much more likely to purchase concessions than other moviegoers - and to spend on average $4 more than other moviegoers. Although the big three: popcorn, soda, and candy top parental purchases - these moviegoers are more likely to buy nachos, hot dogs, and pretzels, as well.

Every 4 out of 10 parents purchase boxed candy as compared to 3 out of 10 for other moviegoers. Peanut M&Ms top the list of preferred candy followed by Reese's Peanut Butter Cups, Twizzlers, Junior Mints, with Gummi Bears and Whoppers tied for last.

Finally, parents are more willing to purchase concessions if the theatre offers discount concession combos.


For years, the top five candy purchases at theatres were: Raisinetts, Milk Duds, Red Twizzlers, Sour Patch Kids, and Skittles, in that order. Recently that changed, in fact exhibitors can now segment their market based on taste and offer candy tie-ins depending upon the film being exhibited.

Males 15 - 34 top candy picks: M&M Peanut, Reese's Pieces, Skittles, Sour Patch
Males 35 - 55 top candy picks: M&M Peanut, M&M Plain, Reese's Pieces Cups
Females 15 - 34 top candy picks: Sour Patch Kids, Skittles, Gummi Bears
Females 35 - 55 top candy picks: Red Twizzlers, M&M Peanut, M&M Plain

Remember: discounts on combos, having a value menu, and offering concession discount days all increase concession sales. Most favored combo - large popcorn and two large drinks.


In keeping with current environmental building sustainability trends regarding the design, operation, and maintenance of new and existing buildings, CTC's "Cinema Management" and "Theatre Design" Workshops now include information and how-to's regarding the "greening" of cinemas.

Practical, easily implemented and inexpensive eco-friendly policies and practices, as well as, instruction on how to put your cinema on a path to conserving energy and water while cutting expenses and improving customer relations and community goodwill have been incorporated into the Workshops.


After 8 years, CTC maintains its unique status and remains the one and only source for professional management and technical training for the cinema exhibition industry. With hundreds of alumni from around the world, CTC's core premise of blending hands-on training coupled with the most up-to-date trends and information on the cinema has proven to be a winning combination that cannot be duplicated. So, when looking to increase and improve your knowledge and expertise regarding the management and operation of a cinema - go the the source - CTC.



Recycling is a continuous and interdependent process: collecting & processing, manufacturing, use of products, return to collection. Single-stream recycling, SSR (also termed "fully comingled recycling") allows for the comingling of paper and mixed container waste (plastic, glass, & metal). Started about 5 years ago, SSR is based upon the premise that comingling vs. separation is a more efficient and less expensive way to recycle trash.

Most communities now use source separation - meaning that residents sort trash before delivery to curbside - but studies have shown that using SSR increases trash tonnage collected, decreases landfill diversion, saves energy and is much more efficient for waste collectors. The bad side - paper manufacturers say that the quality of the paper materials they receive is problematic, with tons of material having to be re-routed to landfills due to contamination with aluminum, glass, and plastic in the paper products they receive.

So the jury is still out on the overall value of SSR. Like many environmental initiatives SSR has a good and bad side. My guess is that SSR will continue to grow but with improved recycle chain enhancements.


Bagcraft Papercon now offers natural kraft popcorn bags and other food packaging for cinemas using natural kraft paper. Natural kraft paper is natural, unbleached, and chlorine-free paper. It is fully compostable and biodegradable and is made with 100% recycled paperboard.

Termed EcoCraft these paper products are not any more expensive than processed paper products and come printed using soy based inks and soy blended wax coatings. Check out EcoCraft products - contact us for information. It's an easy way for your cinema to become more eco-friendly.


Environmental sustainability and certification specialists, like Arboreel, provide not only the expertise to improve your sustainability but the very important third party certification necessary, in many cases, to obtain tax and other rebates and benefits to going Green. Contact us for more information.

Arboreel - a joint venture between Entertainment Equipment Corporation and Screentrade Magazine promotes, designs and develops environmental sustainability programs and initiatives for cinemas. Arboreel is a member of the U.S. Green Building Council and an EPA - Energy Star participant.