CINEMAS MEET THE 'MET'

THE METROPOLITAN OPERA'S - HD- LIVE PROGRAM

In discussions with cinema exhibitors on their conversion to digital projection, the question of  presenting alternatives to movies usually arises given that they will no longer be tithered solely to the film reel.  One of the most successful of the alternative content providers to cinemas is the Metropolitan Opera Company's HD-Live Program.

Transmitted from the Lincoln Center in NYC, which is the largest (at 3800 seats) and most respected opera house in the world, the Met's HD-Live performances are carried by over 1900 cinemas in all 50 states and in 64 countries.

"The Met's future was on a downward course. We needed to reach more people with our art. That was the purpose and goal of the HD-Live Program and it proved to be a success beyond our wildest expectations,"  states Peter Gelb, the Met's General Manager and mastermind behind HD-Live, "It provided the huge boost in revenue that the Met really needed."  And with over 1600 full-time staff members and a 12 month production schedule the Met's annual budget exceeds $300 million. Full use is made of its stage, which is 150ft. deep and 10 stories high!  Says, Peter Gelb, "We run our productions like sporting events, not only in the way they are managed but also in the way we use today's broadcast technology."

Featuring 12 productions for the 2012-13 HD-Live season, the Met encourages cinema participation and transmission requirements are easily meet by the current digital cinema projection systems.  Launched in 2006, HD-Live at the Met has sold over 10 million tickets and has won both an Emmy and Peabody Awards.

The Met's HD-Live Program is one way cinema exhibitors can expand their market reach and get patrons into their theatre which may normally never attend movie presentations.  If interested simply go to the Met's website (www.metoperafamily.org)
and fill out the on-line Cinema Questionnaire.


Jim Lavorato
Comments Welcomed

WEEKLY CineBUZZ REPORT - 1 October 2012

HIGHLIGHTS OF THIS WEEKS REPORT

 - Disney Buys LucasFilms for $4+ Billion
 - Kodak's Future: Interview w/Ed Monahan
 -  SPECIAL REPORT:Cinema Exhibitors - Why They Need the 'WOW' Factor



GEORGE LUCAS GOES TO THE DARK SIDE ?

At 68, George Lucas is calling it quits and sold LucasFilms to Disney for $4.1 billion.
It's a good move for Disney which purchased Marvel Comics and all of their rights in 2009 for $3.96 billion.  Disney is clearly in the content purchase mode and Lucas's Star Wars franchise is an entertainment property of huge value.

Lucas will receive 40 million shares of Disney stock representing one-half the selling price and the remainder in cash. This will make him the second largest non-institutional shareholder right behind the Steve Jobs Trust  (the Apple honcho was the largest single Disney shareholder before his recent death).

"For the past 35 years, one on my greatest pleasures has been to see Star Wars passed from one generation to the next.  It's now time for me to pass Star Wars on to a new generation of filmmakers", said Lucas about his decision to sell LucasFilms. Included in the deal are well known special-effects house Industrial Light & Magic, Skywalker Sound, and video game company LucasArts.

Disney CEO, Bob Iger stated that, "It is just fantastic for us to have the opportunity to  buy it, run it, and grow it.  We intend to aggressively expand the Star Wars film schedule. Following the release of Episode VII in 2015, and Episodes VIII and IX will probably follow on a cadence of every other year and then go from there".

After hitting an incredibly long home run with Star Wars, Lucas found an exit strategy with Disney which would keep his legacy alive and well for the long term and not turn to the dark (forgotten) side.

Ed Monahan

KODAK - WHAT'S NEXT

In an interview with Ed Monahan, Kodak's Head of Strategic Planning, CMG got some insight into Kodak's future.

CMG: Why did Kodak declare Barkruptcy in the first place?

EM: Kodak encountered the same difficulties a lot of other companies faced in the digital transformation.  In our case, it really took its toll on our perennial cash cows, and while we have done a lot to migrate to a digital portfolio and new business models, in the end we needed to re-organize under Chapter 11 to resolve our financial situation and start anew.

CMG: What's in Kodak's future as it emerges from Chapter 11?

EM: There is a lot of good going on at Kodak to prepare to emerge from Chapter 11. We are preparing to sell the Personalized Imaging business which includes our traditional film and paper business and the retail kiosk/thermal business. The new Kodak that emerges will largely focus on the commercial printing business and the Personalized Imaging business will be sold to generate capital towards that emergence.

CMG: Is there much intrinsic value in these businesses ?

EM: In terms of the traditional film and paper business we solidly believe in them and are excited about the prospect of their sale.  These are businesses which are part of a market structure that continues to generate sales and earnings, and will be attractive to prospective buyers.

CMG: When is the sale contemplated ?

EM: The selling of these businesses is viewed in a very positive light. We are hopeful to complete the sale by the middle of next year.  Kodak will then be in a position to serve our markets with leading products and innovation and make further advances into the digital ecosystem.  It is that digital ecosystem and digital lifestyle that will shape not only what Kodak does but what many companies do to win going forward.

CMG: Thanks Ed.


CINEMA EXHIBS: YOU NEED THE 'WOW' FACTOR

My mantra to cinema exhibitors (large and small) is that going forward your most significant, and relentless, competition will be the consumer's living room (aka media room, home theatre, family room, whatever).  When I hear exhibs tell me they want to convert to Digital Cinema but only require the smallest (re: least expensive) projector and definitely no sound upgrade (even if they currently have mono sound in their theatre) my heart drops.  Why? Because in the future their business, under this scenario,  is terminal.  That cinema  simply will not be able to compete in terms of presentation quality (image and sound) with a dark on-screen image and sub-par sound.  Exhibs, you need to have the 'WOW' factor in your presentation.  It has to be better, significantly better, than what people are viewing in their homes!

To their credit, after some discussion, most exhibitors that Entertainment Equipment deals with (and most are long-term customers) trust our judgment and understand that since they are making a significant investment regardless, their best course is to invest a little extra and give their patrons a movie presentation the likes of which is beyond their wildest expectations and one that cannot be replicated in their home- media room!

Exhibitors, if an equipment provider isn't telling you that purchasing an undersized D-Cinema projection system is not the way to go - than BEWARE , because they don't have you best interests at heart.

So, you ask "Why do I think this way?" 

Well, let's have a look.  The new normal in Hi-Def  TV purchases for home media is the 72" ( preferably called the 6 footer) screen - which is quickly becoming the 7 ft. (84") screen, These 7 footer will be on many a Christmas list this year, but it doesn't end there.  Several trends are emerging in 'home entertainment' that we need to explore.

First, is the Multiple Screen trend.  The use of dual and multiple screens is becoming more popular.  This can mean two or more flat-panels on the same wall or screens on various walls in a room - which is a popular arrangement in rooms that function as party or entertainment spaces.  Why, multiple screens?  Because our video choices are now so vast that people often don't want to be restricted to just one screen in a room.

Needless to say, a cinema has one screen, so the presentation must be damn good!.

Second, the Media Room is transforming.  What was once the '90s trend of a 'dedicated home theatre' with a 'cinema' look and fixed seating etc. has given way to
more comfort with sofas and chaise lounges.   People want a home theatre experience but don't want to limit the room to just one use and making it a multipurpose room ensures the systems installed are used more frequently and by more family members.

Third, Social Networking.  Multi-screen goes beyond traditional TV,  Smartphones and tablets are not only being used as TV remote controllers but as second viewing screens as well, with social media driving this trend.  Users are 'live' tweeting, posting, and texting while watching sporting events, movies, or TV shows.

Fourth, Networking Media. According to the Consumer Electronics Association, 25% of all U.S. homes now have an Internet connected Blu-Ray player and over 70% have a gaming console connected to there primary viewing screen.  The internet will become 'the source' for accessing content in the home.

Fifth, Sound. Sound is one-half the experience in viewing any content. And this is no exception in the home,  Better and higher sound quality continues to evolve and is being incorporated in home media systems.  The current trend is the use of floorstanding speakers rather than in-wall speakers.  Floor speakers deliver the best and clearest sound and they are mobile.  Another trend will be toward 'soundbars'. Not only aesthetically pleasing but good soundbars deliver the quality of full-range speakers and even incorporate subwoofers. 

In summary, Cinemas must have that 'WOW factor'  in all of their presentations.  In-home entertainment isn't at the cinema level - yet,  but cinemas have to do it right and when converting to Digital Cinema, well, that is the time to do it.  Digital cinema is the great equalizer, because it allows a single screen theatre in a small town the opportunity to present a movie or other content that is equal in image and sound quality to the 'best' cinema.


Best
Jim Lavorato
Comments Welcomed  

HOLLYWOOD vs.SILICON VALLEY

Former U.S. Senator Chris Dodd - you remember ....... Dodd-Frank, the legislation enacted by Congress which was intended to right the wrongs and abuses of the banking industry which caused the financial melt-down of 2008.  Yes, that Chris Dodd, now the Chairman of the Motion Picture Assoc. of America,  who was offering a high-five to  tech industry honchos at a Commonwealth  Club of California dinner last week.

The conciliatory gesture came on the heels of the movie industry's humiliating defeat in their efforts to control content piracy on the Internet. The MPAA and the studios were shocked by the huge defeat of legislation they lobbied hard for, and now it was all about face-saving and passing the peace pipe.  In his speech, Dodd noted that Google, which was the lead opponent against the studios, by contrast has the most content deals with Hollywood.

The anti-piracy legislation that was voted down in both the U.S. Senate and the House of Represenatives were the Stop Online Protection Act (SOPA) and the Protect Intellectual Property Act (PIPA).

"We call them audiences, you call them users, but giving them the best possible experience is a shared goal" Dodd told the dinner attendees. "In the end, we all report to the same people. I want you to know that our community is listening, continuously innovating, and hungry for more. And we know we can't do this without the work of the brilliant and creative minds behind the new devices, internet platforms, and other digital outlets."

Dodd also suggested it was important for both Hollywood and Silicon Valley to bury the hatchet and work together to enable seamless content sharing, saying, "We have to break through the notion that this is a zero-sum game, we need to benefit from each others success."

Good intentions aside, both groups have been preparing for further conflict.  The MPAA and studios have bolstered their social media strengths while its Silicon foes recently formed the Internet Defense League, whose purpose is to immediately respond to any threat to the Internet from Hollywood.

CMG believes the war has just begun!


Best
Jim Lavorato
Comments Welcomed

LIONSGATE CEO ROARS

Jon Feltheimer, Lionsgate CEO

CMG caught up with Jon Feltheimer, Lionsgate Studio's CEO during a webinar held at  the CTAM (Communications & Theatre Association) conference last week.

CMG: What is the most pressing issue you are dealing with right now?

JF: Our biggest issue, and what I am discussing at this conference , is the falling revenue from DVD sales but how they are being offset by VOD revenue, which is where we must be moving.

CMG: Explain.

JF: Let's take one our our latest films, Arbitrage staring Richard Gere. It brought in about $6 million in VOD revenue compared with $7 million at the boxoffice. That level of on-demand revenue would have been unimaginable for a specialty film just a few years ago.

CMG: Why is this?

JF: The audience for on-demand movies is different than that of moviegoers. 90% of Arbitrage's theatrical audience didn't know the movie was available on-demand and the majority that purchased the movie on VOD didn't know it was playing in theatres. They are totally different audiences.

CMG: I understand that digital rights also play a huge role in the TV sector, could you comment on this?

JF: Yes. For example digital rights were an important factor in renegotiating the final three seasons of  Mad Men (a Lionsgate production with AMC).  At nearly $5 million per episode, we needed to find ways to make Mad Men profitable, so syndication deals were struck with Netflix and other web-based streamers. 

CMG: You spoke at the conference on the need for the industry to work together and not compete in ways that make it harder for others, can you comment on this?

JF: Narrow agendas can make it hard to work together and look at the big picture. For example, the battle between the satellite networks (Dish Network and DirectTV) and content producers over Dish's AutoHop system (AutoHop allows users to skip over commercials and ads) is bad for the industry. We also need better user interface.  You can have premium content, but it's no good if the viewer can't find it.

CMG: What do you mean by - can't find it?

JF: For example, the on-demand release of "What To Expect When You're Expecting" underperformed our expectations simply because the movie starts with a "W".  As such it appears near the end of the A-to-Z lineup and viewers don't scroll down all the way.

CMG: Can you quickly speak about EPIX (Lionsgate's video service) ?

JF: EPIX continues to be a focus for us and our partners, Viacom and MGM. We believe that digital distribution deals will drive the content providers in certain directions.  EPIX recently struck a deal with Amazon Prime and ended it exclusive distribution arrangement with Netflix. We felt we needed more outlets for our content and this trend will continue.

CMG: Thanks, Jon



Best & Happy Movie Going!
Jim Lavorato
Comments Welcome

WEEKLY CineBUZZ REPORT - 10 October 2012

ULTRA HI-DEF TVs

One of the issues I stress when discussing Digital Cinema conversion with movie exhibitors is that D-Cinema presents an opportunity to improve the image and sound quality of the movie presentation, which is paramount in remaining competitive with their biggest threat - the living room!.

Consumers' living rooms are getting more and more 'entertainment immersive'. For example, at last week's CEATEC show (Japan's annual electronics love fest) the major TV manufacturers were all highlighting future Hi-Def TVs.  Touting 4 times the resolution and boasting larger screens (84" or 7ft. is becoming the new normal for size) these 'new' TVs will further enhance the in-home 'movie experience'.

The shift to D-Cinema for exhibitors is not only necessitated by film's demise but by the requirement that the movie theatre 'experience' keeps pace with other advancing technologies.  This means that a cinema's digital conversion be accomplished 'right', with proper sized digital projectors and enhanced sound.  This is the only way a local cinema will survive the relentless competition.  Choosing the smallest projector, not enhancing the existing sound system, and just trying to squeak by to save a few dollars on conversion won't get the average cinema the wow factor needed to compete against a 7ft. TV screen with surround sound.

The writing is on the wall and cinema owners need to read it.


LOOK MA - NO COMMERCIALS ......... NOT !

For years now, consumers have been by-passing TV ads by using their DVRs (digital video recorders) - but those days are numbered.  The DVR is destined for the techo scrap heap of history as viewers exchange their ability to skip ads for the convenience of streaming their favorite content on any device at any time.  The DVR is essentially being replaced by VOC (video on demand). And this is really good news for media companies and advertisers alike. 

Consumer behavior is shifting as cable and satellite providers have broadened their VOD offerings.  Viewers no longer need a DVR to watch most of their favorite sitcoms, dramas, or reality shows.
This behavior shift is further promoted by on-demand video subscription services, such as Netflix, Amazon, and Hulu.  Younger viewers are quickly moving to a scenario where they never knew you had to 'set' a TV to record a show.

What will happen is that VOD programming will disable one's ability to fast-forward, ie viewers can't escape the ads when they watch via VOD content.  In addition to controlling commercial skipping, VOD allows media companies the ability to control how long a program stays available and when it goes down - with DVRs they had no such control.

Right now, it appears that the scale is tilting back in favor of media companies and advertisers as commercials will once again be unavoidable for viewers.

ULTRA VIOLET - STILL INVISIBLE

UltraViolet, the movie studios initiative to push consumers to stream content from the cloud and store it in their personal media 'lockers' hasn't caught on.

Like its name, UltraViolet (UV) has thus far been invisible to consumers.  What UV's sponsors (which consist of the major studios, software & hardware manufacturers, and web retailers) wanted was for consumers to store (stash in their lockers) all manner of content and be able to access it at their convenience using any type of UV compatible web-connected device.

The problem is, consumers haven't shown much interest in the UV concept.  Why?  A big factor, I believe, is that marketing and promotion of UV by its sponsors have been dismal.  There should have been a global marketing campaign.  Another factor, was that early on UV was riddled with technical problems regarding the proper functioning of the locker system (these issues have now been solved).

The studios, led by Paramount and Fox, are now back on the UV band wagon, so you'll be hearing more about it and its value in the future.


3D - IT's ALL ABOUT THE LIGHT

I can not emphasize enough the importance of presenting 3D  movies with the proper amount of light, as not doing so puts 3D exhibition at risk of losing patronage and tarnishing a cinema's reputation.

Some 3D systems, such as RealD require an enormous amount of light as they rest in front of the lens outside of the projector.  So, running RealD 3D with a 2000 or 3000 watt xenon lamp is woefully inadequate even with the required silver screen.  Dolby 3D requires the least amount of light as its 3D system rests inside the projector and even then a minimum 4000 watt xenon should be used, no matter what size the screen.

The biggest complaint from audiences and filmmakers alike is that 3D films are too dark.  In 3D, you can only get the perception of depth when there is enough light otherwise the image looks flat.

I'm aware that the cost to exhibitors for the 3D add-on is substantial; however, if an exhibitor opts for 3D they must do it right, and there is no substitute for the proper amount of light to obtain the full 3D effect as the filmmaker intended.  When moviegoers have a bad experience with 3D it makes them less likely to attend (and spend on the 3D up-charge) going forward.

In 3D exhibition it's all about the light, so if installing a 3D system exhibitors and there equipment providers/installers must insist on using the proper light level.


Best
Jim Lavorato

CHIEF EXECUTIVE CUSTOMER

Over the last 4 months I have logged in over 12,000 travel miles visiting scores of theatres to discuss their conversion to Digital Cinema.  One question that almost always arises, goes something like this, "should I raise my admission prices upon conversion".  At first blush the answer seems easy. Will the current customers (and possibly new ones) continue to attend and support the cinema, if prices are raised?  But the answer is more complex.

Lets face it, every business has to raise its prices at some point.  And if you provide genuine value, and the price boosts aren't too onerous then your customers may accept them in stride.  But by the same token, raising prices can be tricky, particularly in the very competitive entertainment business.

So the question becomes whats the best way to raise prices, without losing customers?

First, start by taking into account all the factors that influence how you price for admissions and concessions.  Such as, market forces, the economic conditions in your area, competition, and cost-of-doing business (just opening your doors).  This is your start point and provides you a base or break even price point.

Second, if you don't think your customers can handle a direct price increase, than consider how you package your current pricing structure.  Most cinemas already use tiered pricing for popcorn and drinks but make sure your pricing is structured to that it pushes the patron to at least the middle priced item (never have more than three sizes or options from which to choose). 

Third, since you are investing a considerable amount of money into digital cinema conversion, make sure you explain this to your community.  There has been plenty of press (national and local) regarding 'the cinemas' move into the digital domain but it must be emphasized by you.  That YOU are making a commitment to THEM in providing the latest and best way to view the latest movies and other entertaining content.  Contact your local press, TV and radio stations, spread the word on your website, and use all of the social networks you can - this is free and great promotion and sets the way toward increasing prices.

Fourth, be prepared for blow-back!  While you may have every reason to raise prices you should be prepared to explain them, just don't blame the cost of doing business. If necessary show off (yes, offer the moviegoers the opportunity to view the projection room) your new digital projection equipment (your investment) and explain how you and your staff are working hard to ensure they continue to receive the best movie entertainment unavailable in their living room.

Should cinemas raise their prices upon digital conversion.  Well, to my mind, it's worth it, but you must put in the effort to explain the increase and its value. Place yourself in the moviegoers shoes -what they want is very good/excellent movie entertainment with few distractions and courteous and efficient service. If executed properly, the customer will understand and accept the price increase, but it's your job to make 'the sale'.

Good Luck

Best
Jim Lavorato

CINEMAS NEED TO USE PHONE TECHNOLOGY

GOOD/HID Access Reader Just Takes a Swipe

If you read CMG with any regularity you are acutely aware that I am a huge proponent of the use of Smartphones technology by cinemas for everything from admission and concession sales - to - inventory control.

Now another use can be taken advantage of by cinemas - Security !  Recenty, Good Technology, a Sunnyvale, CA security software company teamed up with HID Global, a manufacturer of physical access readers, to produce and market security access door locks - turning the Smartphone into a "key" with just a swipe near the reader/lock.

Calling it the "world's first NFC (near field-communication) enabled system for the use of Smartphones for physical access to buildings and offices " Good choose the Samsung Galaxy S III Smartphone for its application.  Using secure NFC microSD cards in the phones, users are sent physical access credentials (ie keys) 'wirelessly'  via HID's Secure Identity Service, which also lets the system administrator (cinema owner) manage and monitor credentials and identities tied to specific phones. 

What this means is that you can 'push or revoke' credentials over the air to each user,
For example, allowing access to a certain facility (or certain doors within that facility)
or providing a one day or even one time access only, or provide an employee or manager full access to the facility 24/7, or allowing access only on the days that an employee works, say Monday, Wednesday, Friday and no other days.  Another benefit is that there are no physical keys to worry about, to forget, to lose. When an employee leaves access is simply revoked wirelessly.

Using the Smartphone adds another layer of security because users not only need to obtain the appropriate credential but they need to know that phone's  password to use it as the key.  Additionally, no one is going to forget their phone, because it is their phone. If they forget it, they will always go back and get it.  The speed comes from the fact that all users are never slowed down or inconvenienced when reaching a doorway and not being able to access it (because they forgot their phone).  If  the phone is lost or stolen, first one would need the code to unlock the phone and second, the access credentials can be revoked instantaneously.

This use of Smartphone technology is not only smart but inexpensive and the control it provides over individuals' access to a facility and premises is truly remarkable.


Best
Jim Lavorato
Comments welcomed !

HOLLYWOOD REWORKS REVENUE STREAM

P. Dauman, Viacom CEO

DVD sales of new released movies (one of Hollywood's main revenue streams) continues to tumble - forcing the major studios to completely rethink their movie making/distribution model.  As multi-platform 'pay for view' takes a firmer hold on the consumer the studios are re-casting how they fund movies.

This redo of a movie's revenue stream has taken hold in Hollywood.  "Greenlighting a feature film, Paramount now restructures deals made with actors, producers, and directors to better reflect a 'partnership' relationship' on the economies of a film rather than a high upfront cost", Viacom CEO Philippe Dauman, told CGM.

"We don't mind sharing the upside of a movie with talent as long as we don't have a downside, or we have a sharing of risk" says Dauman.  "It is no longer feasible for a studio to make huge upfront payments to talent with an increase uncertainty on the back end due to faltering DVD sales."


Until recently, the big share of a movie's profits rested with the sale of DVDs and not the box office, but as consumers have moved (very quickly) to internet downloading of content the studios have scrambled to re-think how they contract with talent and, just as importantly, maneuvering to get a larger piece of the digital streaming pie.

"The way we look at the movie business is that we want to create great films and we want to manage the downside, the risk/reward equation if you will". Dauman said. "We're looking at all sorts of revenue opportunities".

Best and Happy Movie Going!
Jim Lavorato

USING "THE" TECHNOLOGY

Dolby's 'Digital Plus' - Hits The Mark

Conversion to digital projection presents new business opportunities for cinemas. A few days ago I blogged on the movie program available to cinemas from the National Geographic Society.  Programming is also available from the NY Metropolitan Opera Company and there are and will be many others offering content to cinemas.

Amazon's Kindle Fire HD w/Digital Plus

Cinema exhibitors, however small, should take advantage of this alternative content (to movies) for expanding their customer base.  Adopting, and more importantly, using the new digital technology affords great opportunity for many businesses that were traditionally mainly  in the movie business.  Case in point: Dolby Laboratories.

Not content to rely solely on the audio or cinema industries to determine its future, Dolby has embraced digital technology and expanded it reach - developing new markets in which to expand and grow.

As audio quality took a back seat to HD displays on mobile devices - Dolby realized opportunity and jumped on it.  Last Thursday, Amazon introduced the Kindle Fire HD tablet with Dolby's new Digital Plus audio.  "Dolby's Digital Plus is every impressive, says, Tim Bajarin of Creative Strategies, "it will make audio the next battlefront in tablets as all of the current tablets have inferior sound." 

Dolby accomplished this feat by developing new software that is custom tuned for each mobile device being introduced with Digital Plus - making the downloading of the software as an application a non-starter.  Amazon, by incorporating Digital Plus into the Fire HD has "thrown down the gauntlet, this is a new level of differentiation and users will love it", says Bajarin.

Amazon exec, Dave Limp called Dolby Digital Plus "a perfect complement to the sound system we designed into the Kindle Fire.  Customers have told us they want great sound for movies, music, and games."
Dolby equates quality audio for mobile devices as following in the footsteps of its technology advances going from stereo, to theatre sound, to home audio systems.  To extend that to mobile devices was the next step. Digital Plus incorporates volume leveling, a surround virtualizer, and a dialog enhancer.

Dolby Laboratories (DLB) is publicly traded. At a current share price of $34.50 and given the potential to have its Digital Plus audio software included into every mobile device to be produced, it may be a terrific buy.

Best
Jim Lavorato
I welcome your comments

WEEKLY CineBUZZ REPORT - 12 September 2012

Highlights Of This Week's Report:

- Five of Six Studios Sign On to M-GO
- Dalian Wanda: AMC Purchase Only Start of $10b Investment
- 'Lawrence of Arabia' to Hit Screens on Oct.10th.
- Going To A Higher Frame Rate
- Fox Narrows Theatrical Release Window

M-GO Gets OK From Studios

M-GO, a mobile device entertainment application, backed by Technicolor and DreamWorks Animation has signed on five of the six major studios to offer content day and date with DVD/BluRay releases. WBs, Fox, Sony, Paramount, and Universal will all offer new release and catalog content for both rentals and electronic sell-through.  Disney has not signed on, as yet.

M-GO will be available as a down-load via iTunes and Google Play, will be pre-loaded on Samsung 2012 HDTVs, Blu-Ray players and Intel Ultrabooks.  M-GO will also serve as an UltraViolet retailer, offering streaming and downloading of titles enabled with the 'buy one/play anywhere' cloud based  UltraViolet system.


Chinese Media Giant "Dalian Wanda' Looks to Invest Big in U.S.

Wang Jianlin, CEO

Just having completed it $2.6 billion acquisition of the AMC cinema chain of theatres, Wang Jianlin, Chairman & President of Chinese media giant Dalian Wanda said the the company plans to invest $10 billion in the coming years - with hotels, retail stores, and cinemas at the top of the buy list. Film production is also on the to do list.

Wang hinted about a possible film production fund or joint venture with a major studio.  When asked why he is attracted to the U.S. when there is so much opportunity in China's cinema business, he stated "We can't put all the eggs in one basket."

'Lawrence' Makes Encore

Sony Pictures and NCM Fathom Events is marking the 50th Anniversary of 'Lawrence of Arabia" with a digitally restored version available nationwide at cinemas on October 4th.  This will precede Sony's release of a limited-edition four-disc set on November 13th in a fully-restored Blu-Ray with UltraViolet.

'Lawrence of Arabia' won seven Academy Awards including Best Picture in 1962 and is listed as number 7 on the American Film Institutes's "100 Greatest Movies of All Time".  The restoration is from the original 65mm negative and the presentation features an introduction by Omar Sharif, one of the film's stars.


Moving To A Higher Frame Rate

Hollywood wants to move to a higher frame rate for motion pictures, particularly 3D films. Why and What is meant by HFR.

Film and digitally based movies are projected at 24 frames per second (fps). This has been the standard for film projection for decades, however, the move to a frame rate higher than 24 was not feasible: first, because to move to a 48 fps required twice as much film, and second , it would have necessitated a complete retrofit of all of the 35mm projection systems worldwide.  Now, with digital cinema projection a higher frame rate is possible.

Hollywood supports a 48 fps for 2D movies, but for 3D it becomes more problematic as the effective frame rate for 3D is double the number - to 96 fps, which poses technical issues regarding networking and data compression.  That amount of data could be accommodated on a hard drive but would not be feasible for electronic distribution of movies.

The whole purpose of a HFR is to improve the viewing experience - reducing motion blur and increasing the clarity of the on-screen image.  As it stands, the industry is moving towards a standards criteria for 2D at 48 fps, we'll see what happens for 3D.

Fox Narrows Cinema Release Window

Fox plans on releasing "Prometheus" in a high-definition on-line version about three weeks before its release on DVD or VOD.  This move will shorten the waiting time between theatrical release and normal video release.

Consumers are purchasing more of their movie entertainment via on-line outlets like Amazon, Google Play, and iTunes and Fox wants to take advantage of this trend. 

Prometheus will be available for digital download on Sept 18th well in advance of its October 11th DVD release date.  Fox is calling its electronic movie sale "Digital HD or DHD", and plans on offering many more movies via this marketing mode.  The DHD movies will be available in about 50 countries worldwide.

Best and Happy Movie Going!
Jim Lavorato
We welcome your comments.

NATIONAL GEOGRAPHIC CINEMA VENTURES

'Flying Monsters' - a NGS Movie for Cinemas

The NGS Offers Cinemas Outstanding Content

The National Geographic Society has a movie section that specializes in distributing content to movie theatres - called Cinema Ventures.

The array of available movies is extensive and available to all cinemas that are Digital Cinema ready.  This is one way for cinemas to expand their audience and exhibit alternative content that is relevant and different.  Available on BluRay disc or DVDs these movies can play directly through a cinema's D-Cinema projection system producing a very high quality on-screen presentation.

The NGS is very well known and respected and their movies offer top-notch entertainment for children and adults. Please contact them as this represents a great opportunity for cinemas to demonstrate the diverse content that their investment in digital cinema affords their customers.

For more information on NGS's Cinema Ventures contact:
Mark Katz or John Wickstrom
Cinema Ventures, National Geographic Society Entertainment
161 6th Avenue, 15 Floor
New York, NY 10013
212-224-8479 or 913-648-5886
mkatz@ngs.org or jwickstr@ngsorg

CineBUZZ REPORT - 1 September 2012

HIGHLIGHTS OF THIS REPORT

- New York May Nix Sales Tax on Digital Flix
- Dine-In Theatres - Have They Gone Too Far ?
- Coming To Your Wrist - Movie Viewing
- 3D Glasses Cleaning Made Easy
- Minimum Wage Increase - Good or Bad ?
- Potter's Magic No Match For Hunger

NO SALES TAX ON DIGITAL MOVIES

The New York State Division Tax Appeals Court recently ruled and determined that the delivery of digital movies on hard drives would not cause the transaction to be taxable under the New York Sales Tax law primarily because the hard drives were not necessary for the display of the movies. New York State imposes its sales tax on retail sales of tangible personal property, thus in order for sales tax to apply, there must be a transfer of title or possession or both of the property.

Traditionally, movies have been viewed as constituting tangible personal property because the 35mm film they were recorded on was "corporeal" and therefore licenses to exhibit movies on the film have been subject to New York sales tax.  However, digital movies delivered electronically are intangible property, and receipts from licenses of them are thus not subject to NY Sales Tax.

The ruling found the, "hard drives, unlike traditional film, were not necessary to each (or even any) instance of displaying the content, and that the hard drive was not itself the desired object of the transaction."  The ruling further found that exhibitors, "did not take title to the hard drives, but rather immediately returned them to the distributor after uploading the movies."

The New York State Department of Taxation & Finance has 30 days from the Appeals Court determination date to file an exception (appeal) to the ruling.

This is great news for New York exhibs and the ruling should hold up against appeal, if filed.

UPDATE: It was learned yesterday that the NYS Department of  Taxation would not be filing for an appeal of the sales tax ruling.

DINE-IN THEATRES - HAVE THEY GONE TOO FAR?

CMG has preached on the benefits of expanding/embellishing cinemas' concession offerings for many years.  We now can test this theory in the extreme as AMC Entertainment (the U.S. movie chain now owned by Chinese media company Dalian Wanda) opened its seventh Dine-In Theatre - a 13 screen venture located within the confines of AMC's Easton Town 30plex in Columbus, Ohio.

The new 13 Dine-In auditoriums are converted/remodeled regular auditoriums, and demonstrate AMC's commitment to the Dine-In strategy as the loss, of each converted auditorium's seating capacity averaged 50%.  To further delineate their commitment,  AMC has two separate types of Dine-Ins. Nine of the 13 converted auditoriums are termed "Fork & Screen" auds. - which are family-friendly and allow children under 18 admittance if accompanied by an adult.  The other four auds. are termed, "Cinema Suites" and are only for the 21 and above crowd.

The Dine-Ins serve up burgers, sandwiches, salads, pizza, and quesadillas, in addition to regular concession fare.  The food is touted as being top quality with pricing, for most menu items, in the $10-15 range.

Good strategy or has AMC gone too far?  The Dine-In concept is not new (see CMG post of September 2011 on Platinum Cinema Suites in Singapore) but devoting 13 auditoriums to the idea may be overkill - do that many moviegoers want to dine and watch a movie?  We'll keep you informed as to their market success.


MOVIE VIEWING ON YOUR WRIST - it's just a matter of time.


Wristwatches that just tell time are fast disappearing.  SmartWatches will be the future, not only of time-telling but a mode of getting a lot of information.  Companies like Apple, Sony, Nike and loads of others hope that you will be strapping a 'device' on your wrist very soon.

The new devices won't replace SmartPhones but rather connect to them, but they will provide far more information than the most advanced watch or chronometer.  For example, the Sony SmartWatch (pictured above) can display emails, Twitter posts, other text and images  all 'pulled' from an Android phone.  "The wrist becomes a remote screen where you now have the ability to control your phone with a number of different applications," states Stephen Sneeden, Sony's Product Marketing Manager. " By virtue of the intelligence of the smartphone, it's going to help redefine what goes on your wrist." 

Big issue: the new SmartWatches must strike a balance between technology and fashion in order to entice a broader audience, particularly those under 21, who have given up on the wristwatch. The wrist is used for fashion and expression not just funcion - the two will have to be merged for the SmartWatches to really catch on.

My take: Consumers do not buy multiple SmartPhones, but multiple wrist devices - well that may be a different story and one the manufactuers, I'm sure, are drooling over.


3D GLASSES CLEANING MADE EASY

Esther Hormatz of the Dietrich Theatre, in Tuckhannock, PA recently informed me that they clean their Dolby 3D glasses using a normal dish washer, and "it works great."

"We weren't sure if the glasses would get tossed about, but they don't. The unit has a heat boost cycle, and a shorter wash cycle." says Esther. " We use the dishwasher packets with bleach, and spot free rinse. We don't let them dry inside the washer. After the wash, the kids immediately take them out and lay them on the counter to dry".  The glasses are given a quick wipe with a microfiber cloth which the staff performs between shows.

"We are very satisfied with the regular dishwasher" states Esther, "and it cost a lot less than the washers made specifically for washing glasses and the required special holding racks, which still require the simple dry wiping with a cloth".

Thanks Esther for the great information and excellent advice.  I'll be using this info. as a selling point, as the Dolby 3D System provides, by far, the best on-screen 3D image.


INCREASING THE MINIMUM WAGE: GOOD/BAD FOR EXHIBS.

The federal minimum wage stands at $7.25/hour.  Usually, efforts to raise the minimum wage has drawn fierce opposition from small business, but the U.S. income equality issue will make opposing the raising of the rate very difficult this time around.

The current proposed legislation would boost the federal rate in three 85 cent increments, to $9.80 an hour, over three years, then adjust it annually to keep pace with the cost of living.  Those favoring the increase argue that employees who are paid more work harder and stay on the job longer.  But the timing for increasing labor costs couldn't be worse, particularly for movie exhibitors - which are dealing with digital conversion and most of which can't raise prices to offset higher wages .Currently  18 states have minimum wage rates that are higher than the federal rate (New York is at the $7.25 federal rate) five states have no minimim.

My take:  The minimum federal rate increase will be enacted after the Presidential election but not to the extend as proposed, but at a lesser amount.

'HUNGER GAMES' BEATS 'HARRY POTTER'

Amazon reported that on-line sales of the three novels that make up The Hunger Games triology surpassed the seven books that made up the 'Harry Potter' series. This makes the Suzanne Collins saga the best selling book series (cum movie franchise) of all time on Amazon - both ebook and print sales. It is estimated that there have been more than 50 million copies of the three books sold - print or digital versions.

Hopefully these record sales will translate to record box office admissions as the second film in the tri-movie franchise is released.


Best and Happy Movie Going!
Jim Lavorato

We encourage your input and response

FALL (HOLIDAY) MOVIES BEST IN YEARS

By my count, there will be 98 major movies released during the September-to-December period and it looks to be one of the best fall seasons EVER !

Now, I may be going out on a limb but when a previewed the release slate I saw a number of really good box office grossers, so I don't think I'll miss the mark and may hit a bull's eye with my prediction. My picks are as follows:

SEPTEMBER - 27 MAJOR RELEASES

Big Grosser Picks : Finding Nemo 3D, The Master, Resident Evil:Retribution, Trouble with the Curve, Hotel Transylvania, End of Watch, Looper.

Sleeper Picks: Bachelorette, The Inbetweeners, The Perks of Being a Wallflower, Don't Back Down.

OCTOBER - 30 MAJOR RELEASES

Big Grosser Picks: Frankenweenie, Taken 2, Argo, Here Comes the Boom, Seven Psychopaths, Killing Them Softly, Paranormal Activity 4.

Sleeper Picks: Pitch Perfect, Smashed, Cloud Atlas.

NOVEMBER - 23 MAJOR RELEASES

Big Grosser Picks: Wreck-It-Ralph, Lincoln, Skyfall, Twilight:Breaking Dawn-P2, Life of Pi, Silver Linings Playbook.

Sleeper Picks: Flight, Rise of the Guardians, Chasing Ice

DECEMBER - 18 MAJOR RELEASES
Big Grosser Picks: The Hobbit: An Unexpected Journey, Les Miserables, Monsters Inc. 3D, Zero Dark Thirty, This Is 40, Parental Guidance.

Sleeper Picks: Hyde Park on Hudson, Jack Reacher, On the Road, The Guilt Trip.

Of the 98 major releases 9 will be in 3D: Finding Nemo 3D, Resident Evil:Retribution, Hotel Transylvania, Frankenweenie, Wreck-It-Ralph, Life of Pi, Rise of the Guardians, The Hobbit, and Monsters, Inc. 3D.

A great roster of films for the Fall of 2012 so it should be a very merry holiday season for distribs and exhibs alike.

Best and Happy Movie Going!
Jim Lavorato

CineBUZZ REPORT - 5 August 2012

HIGH LITES OF THIS WEEK'S REPORT

- WB BATTLES PIRATES ON AMAZON
- GOOGLE WALLET Goes BIG For CINEMAS
- EEC AND NOISE STUDIOS FORM AFFILIATION
- HOBBIT To Use SPECIAL EDITION 3D GLASSES

WB Targets Pirates Using AMAZON
Last week Warner Bros. filed suit in U.S. District Court in California alleging that third-party sellers are retailing counterfeit and unauthorized copies of WB movies through Amazon on-line.
In its suit, WB states that it "has suffered and continues to suffer irreparable harm and damage through these illegal sales."  The suits were filed against Amazon seller Todd Beckman and 10 other co-defendants with an additional 19 lawsuits filed against other sellers.  WB claims there are more than 2 million independent sellers using Amazon.com as there sales vehicle.
WB claims the defendants sell the counterfeit and pirated copies of movies in several formats, including: video cassettes, laser discs, DVDs, compact discs, and BluRay discs.  Amazon declined to comment on WB's allegations.  CMG will keep you informed.



Google Wallet System

GOOGLE WALLET Now Good With All Credit Cards

Last year CMG reported on the value of equipping cinemas with the ability to accept payment for admissions and concession sales via smartphones - and saying that the Google Wallet was one of the best payment systems for this.  Since that time, the use of smartphones for retail payments by consumers has soared.
The Wallet is now one of the largest apps used for phone payments and it just expanded - as it can now be used with all credit cards.  Originally, only Citibank customers with a MasterCard could use the Wallet service, but last week Google enhanced Wallet so it can now be used with any credit card and allows users to access credit card data and the capability to disable Wallet on-line should your phone be lost or stolen. Google Wallet competes against Square, LevelUp, and Pay Pal but with its new enhancements Wallet is the most user-friendly system.
For there part, to take advantage of a phone payment system, cinemas need to install point-of-sale systems that include near-field-communications (NFC). NFC allows cash registers to communicate wirelessly with smartphones.  About 200,000 retail outlets in the U.S. currently use Google Wallet - including McDonald's, WalMart, Whole Foods, and Macys - which also use Wallet to provide users with store coupons and rewards.

EEC Forms ALLIANCE With NOISE STUDIOS

Entertainment Equipment Corp. and NOISE Studios have formed a representative agreement, whereby NOISE will sell, install, and service cinema audio products throughout the Middle East and North Africa. with the assistance of EEC.
Located in Cairo, NOISE Studios currently markets, installs, and services audio systems to commercial and entertainment venues. "Given it's international business experience, the addition of the cinema market - through its affiliation with Entertainment Equipment -  will further strengthen NOISE's market depth, reputation, and brand" says, Mohamed Omar, President, NOISE Studios.

" As in the Far East, the cinema is expanding rapidly in the Middle East and there is great opportunity for good companies to grow and prosper. Our venture with NOISE will expand our market reach and provides a real growth opportunity for us", states Jim Lavorato, President, Entertainment Equipment Corp.

Contact: Mohamed Omar, NOISE Studios
16 26 of July Street, Suite 3
Modandessin-Giza 12411
Cario, Egypt
2-02-3346-9023  or mail@noisestudios.net

"The Hobbit" To Use SPECIAL EDITION 3D Glasses

The Hobbit franchise will consist of three films which are scheduled to be released in a high-frame rate format of 48 frames per second and in 3D.  For this event, special edition 3D glasses are being producted (see insert).

Inspired by Middle Earth the first of the 3 films - The Hobbit: An Unexpected Journey is due to be released on December 4th.  It is rumored that The Hobbit trilogy will have the impact and imagery of Avatar.  Lets hope it does and matches Avatar's grosses as well,

Kodak's Patent Portfoilo - On The Block

This coming Monday, the bidding will take place on the purchase of Eastman Kodak's patent portfolio. The deadline for bid submission is 5pm EST.   Over 1,100 patents will be up for sale with the most sought being those related to digital-photo technology.

Kodak hopes the auction proceeds will surpass the $2.6 billion estimated auction value of the patents  and provide it enough money to pay off it creditors and allow it to be released from bankruptcy (which it entered into earlier this year).  Early indications are that a bidding war may be brewing with Apple and Microsoft teamed with patent purchaser Intellectual Venture Management pitted against Google, patent purchaser RPX Corp.,  Samsung, LG Electronics, and HTC (the cell phone manufacturer).

Kodak hopes the opposing groups will enter into a bidding war as was the case last year when the same groups fought over Nortel Networks patents which finally sold (to the Apple/Microsoft group) for over $4.2 billion - and were not of the scope or  importance of the Kodak patents. Unfortunately, for Kodak, last week the U.S. International Trade Commission invalidated one of Kodak's most valuable patents - the one governing how images are previewed by a digital camera.

Even with the ITC's determination, however, Kodak's patent portfolio is substancial and provides holders the potential to block competitors from releasing new products - particularly  smartphones and tablets.

We wish Kodak the best come Monday.


I'd like to have your thoughts.

Best and Happy Movie Going!
Jim Lavorato