IT SEEMS THE 3D CRAZE IS EVERYWHERE - 3D TVs, 3D VIDEO GAMES, 3D DVDs, 3D SMART PHONES, AND OF COURSE, 3D MOVIES - AND THE CRAZE WAS AT FULL THROTTLE AT SHOWEST THIS YEAR.
RUMORS WERE RAMPANT AT THE SHOW. SO, DID I WALK A AWAY WITH ANY SOLID ANSWERS - NO!
AM I THE ONE WHO HAS TO MAKE THE HARD DICISIONS - NO! IT'S THE MOVIE EXHIBITOR THAT HAS TO MAKE THE HARD DECISIONS, AND THIS YEAR SHOWEST WAS ALL ABOUT DECIDING WHAT NOT TO DO, WHAT NOT TO BUY, WHAT NOT TO EMBRACE, WHAT NOT TO INVEST IN. IT WAS ALL ABOUT TRYING TO DECIDE - BY VIRTUR OF ELIMINATION - WHAT THE BEST COURSE OF ACTION REGARDING WHAT ARE LONG-TERM, STRATEGIC DECISIONS IMPACTING THE MOVIE EXHIBITOR'S BUSINESS.
GO WITH DIGITAL CINEMA AND 3D OR GO WITH THE NEW ON-FILM 3D OPTION, OR GO WITH NO 3D AT ALL.
Friday, April 02, 2010
Wednesday, March 31, 2010
T-3D - WHERE THE FUTURE LIES
FOR MANY EXHIBITORS THE TECHNICOLOR ON-FILM 3D SYSTEM (T-3D) MAY BE THE ONLY WAY FOR THEM TO EXHIBIT 3D FILMS - AND PARTAKE IN THE CURRENT 3D CRAZE. IF YOU ARE INTERESTED IN THE T-3D OPTION CONTACT US FOR FULL DETAILS - IT MAY BE THE OPTION FOR YOU.
APRIL TRAINING WEEK AROUND THE CORNER
Digital Cinema, 3D options, technical issues, management and concession innovations, all of these and many more up-to-the-minute cinema topics will be covered during CTC's upcoming April Training Programs (April 19-23).
For details go to www.cinema-training.com or call us at 800-448-1656. Don't leave yourself wondering about the dramatic changes occurring in the cinema industry and how they (financially and operationally) impact your cinema. Get all the answers and information so you can make the right decisions - visit us at Cinema Training Central - it's easy, economical, and arguably the best and most beneficial decision you can make regarding the future of your cinema (your business).
For details go to www.cinema-training.com or call us at 800-448-1656. Don't leave yourself wondering about the dramatic changes occurring in the cinema industry and how they (financially and operationally) impact your cinema. Get all the answers and information so you can make the right decisions - visit us at Cinema Training Central - it's easy, economical, and arguably the best and most beneficial decision you can make regarding the future of your cinema (your business).
Monday, March 15, 2010
THE MOVIE INDUSTRY 2010
A sub-sector of the larger Media and Entertainment industry, the 'movies' are under much less pressure from the cyclicality of the global economic downturn as their venerability is driven more by the absence of boxoffice hits than economic weakness. Moreover, movie attendance does not make up a significant enough proportion of a consumer's overall entertainment/recreation spending to be cut dramatically in a downturn.
For 2010 the U.S. cinema's performance, both boxoffice attendance and revenue, should exceed 2009's results with continued hit driven films and the positive impact of 3D - which is still new and novel with the public. Additionally, in-cinema advertising, which grew by 17% in 2009 to over $900 million, will buck the more general slowdown in overall advertising expenditures and can be expected to increase 9-12%, and exceed the $1 billion mark this year.
EXHIBITION - STEADY AS SHE GOES
Exhibitors although somewhat burdened with escalating operating expenses and high fixed costs, carry limited inventory and all sales are essentially immediate (cash or credit card}, making for a very low level of receivables while payables are extended and paid on traditional business terms. Although the movie exhibition business does have some concentration (large circuits like Regal and AMC} there are limited benefits to industry concentration given strong buyer (moviegoers) and supplier (studios) power present in the industry. Exhibitors are highly susceptible to top-line volatality ss they are completely reliant on the studios for the quality and quantity of their product stream, making for limited opportunities to differentiate particularly in the case of the large circuits. However, direct competition for exhibsitors is low, their threat comes from indirect competition - the distribution of movie content through non-traditional channels such as DVD, VOD, and the Internet coupled with a collapsing window of exclusive theatrical release.
Nonetheless, movie going remains popular and affordable, although I would be cautious regarding exhibitors ability to maintain boxoffice and concession pricing increases over the next several years. Therefore, movie operators must pay particular attention to operating costs as debt levels and lease obligations are high on average, as are capital expenditures meaning that excellent cash flow and operating expense management is imperative.
DISTRIBUTION - IN AN UNFRIENDLY WORLD
Digital initiatives, such as Digital Cinema, are not consequential to the movie industry's overall profitability. The introduction of 3D will provide a boost to both attendance and admission revenue (with premium 3D pricing) but it remains to be seen if this trend will continue over time.
3D or not, the movie industry is a hit-driven business The large studios are housed within media/industrial conglomerates (Time-Warner, Disney, GE, Sony, News Corp., Viacom) and are viewed as relatively modest profit contributors to the consolidated operations of these media giants. However, there are huge barriers to industry entry by outsiders, the most notably being control of a global network. Moreover, there is limited direct competition between the studios as they do not compete on price but on content delivery that can fluctuate significantly year-to-year. Quality of film product will continue to be the main driver of movie attendance and revenue. Going forward, I would expect the studios to focus more on titles, characters and stories that can be leveraged into other licensing and ancillary products and outlets. This should be good news for exhibitors as well given that these concept/character-driven movies - particularly the fantasy and superhero films - are the current boxoffice center spikes.
OUTLOOK
Moving forward exhibitors should look to improving operations by increasing productivity and efficiency. Implementing environmental sustainability programs which reduce energy, water, and waste costs, improving local community relations, introducing non-movie (alternative) content and activities, and finding ways to enhance their patrons' entertainment experience.
Distributors must be very careful regarding their adoption of digital distribution as this could lead to the eventual loss of their global distribution control - which exists only because it is film (analog) based. The downside for the media giants would be seeing the film industry succumb to the "digital" fate of the music and publishing industries.
By: Jim Lavorato, President
Entertainment Equipment Corp.
For 2010 the U.S. cinema's performance, both boxoffice attendance and revenue, should exceed 2009's results with continued hit driven films and the positive impact of 3D - which is still new and novel with the public. Additionally, in-cinema advertising, which grew by 17% in 2009 to over $900 million, will buck the more general slowdown in overall advertising expenditures and can be expected to increase 9-12%, and exceed the $1 billion mark this year.
EXHIBITION - STEADY AS SHE GOES
Exhibitors although somewhat burdened with escalating operating expenses and high fixed costs, carry limited inventory and all sales are essentially immediate (cash or credit card}, making for a very low level of receivables while payables are extended and paid on traditional business terms. Although the movie exhibition business does have some concentration (large circuits like Regal and AMC} there are limited benefits to industry concentration given strong buyer (moviegoers) and supplier (studios) power present in the industry. Exhibitors are highly susceptible to top-line volatality ss they are completely reliant on the studios for the quality and quantity of their product stream, making for limited opportunities to differentiate particularly in the case of the large circuits. However, direct competition for exhibsitors is low, their threat comes from indirect competition - the distribution of movie content through non-traditional channels such as DVD, VOD, and the Internet coupled with a collapsing window of exclusive theatrical release.
Nonetheless, movie going remains popular and affordable, although I would be cautious regarding exhibitors ability to maintain boxoffice and concession pricing increases over the next several years. Therefore, movie operators must pay particular attention to operating costs as debt levels and lease obligations are high on average, as are capital expenditures meaning that excellent cash flow and operating expense management is imperative.
DISTRIBUTION - IN AN UNFRIENDLY WORLD
Digital initiatives, such as Digital Cinema, are not consequential to the movie industry's overall profitability. The introduction of 3D will provide a boost to both attendance and admission revenue (with premium 3D pricing) but it remains to be seen if this trend will continue over time.
3D or not, the movie industry is a hit-driven business The large studios are housed within media/industrial conglomerates (Time-Warner, Disney, GE, Sony, News Corp., Viacom) and are viewed as relatively modest profit contributors to the consolidated operations of these media giants. However, there are huge barriers to industry entry by outsiders, the most notably being control of a global network. Moreover, there is limited direct competition between the studios as they do not compete on price but on content delivery that can fluctuate significantly year-to-year. Quality of film product will continue to be the main driver of movie attendance and revenue. Going forward, I would expect the studios to focus more on titles, characters and stories that can be leveraged into other licensing and ancillary products and outlets. This should be good news for exhibitors as well given that these concept/character-driven movies - particularly the fantasy and superhero films - are the current boxoffice center spikes.
OUTLOOK
Moving forward exhibitors should look to improving operations by increasing productivity and efficiency. Implementing environmental sustainability programs which reduce energy, water, and waste costs, improving local community relations, introducing non-movie (alternative) content and activities, and finding ways to enhance their patrons' entertainment experience.
Distributors must be very careful regarding their adoption of digital distribution as this could lead to the eventual loss of their global distribution control - which exists only because it is film (analog) based. The downside for the media giants would be seeing the film industry succumb to the "digital" fate of the music and publishing industries.
By: Jim Lavorato, President
Entertainment Equipment Corp.
Tuesday, January 26, 2010
BUILDING YOUR GREEN CRED
With an eye on the future, it's important for your business to build its environmental sustainability reputation and credibility. It makes all the difference if your company is perceived as a value player in the green movement - and as we all know - perception is reality.
No business wants to be open to accusations or even worse the perception of green washing. The lesson here is you must foster and demonstrate through positive actions a deep and long-term commitment to sustainability issues and effectively communicate to your customers and community.
To build your Eco-cred follow these steps:
- A company should engage with a variety of different local/national or perhaps even international groups that have sustainability goals in common with yours. This engagement should be accomplished on a regular basis, and is preferable to single issue initiatives as it reaps much more positive results and cumulative benefits.
- Consider paarticipating in local programs. It is not necessarily better to focus on high profile media opportunities. In fact, in many cases, going local is the preferable tact.
- Always research the groups you are working with and/or sponsoring for their credibility as well. What have they accomplished in the past and what are their goals regarding sustainability? Teaming up with an organization - private firm, public entity, or not-for-profit - with a lot of sustainable cred can make all the difference.
- Initiate programs and actions that present your company as a meaningful contributor and practitioner of sustainability practices. Don't fool and don't spin this issue, as a bad reputation is going to be very hard to fix.
To build a truly sustainable business reputation companies must do more, a lot more, than just talk a good show or implement a few superficial energy saving initiatives. The environmental program you adopt must be strategic, long-term, thoughtful, and productive not only for the company but for the community at large, and your customers. Being part of the global ecological initiative and demostrating your commitment to it will bring significant benefit to your firm's eco-credibility and, over time, your firm's profitability and goodwill.
By: Jim Lavorato
No business wants to be open to accusations or even worse the perception of green washing. The lesson here is you must foster and demonstrate through positive actions a deep and long-term commitment to sustainability issues and effectively communicate to your customers and community.
To build your Eco-cred follow these steps:
- A company should engage with a variety of different local/national or perhaps even international groups that have sustainability goals in common with yours. This engagement should be accomplished on a regular basis, and is preferable to single issue initiatives as it reaps much more positive results and cumulative benefits.
- Consider paarticipating in local programs. It is not necessarily better to focus on high profile media opportunities. In fact, in many cases, going local is the preferable tact.
- Always research the groups you are working with and/or sponsoring for their credibility as well. What have they accomplished in the past and what are their goals regarding sustainability? Teaming up with an organization - private firm, public entity, or not-for-profit - with a lot of sustainable cred can make all the difference.
- Initiate programs and actions that present your company as a meaningful contributor and practitioner of sustainability practices. Don't fool and don't spin this issue, as a bad reputation is going to be very hard to fix.
To build a truly sustainable business reputation companies must do more, a lot more, than just talk a good show or implement a few superficial energy saving initiatives. The environmental program you adopt must be strategic, long-term, thoughtful, and productive not only for the company but for the community at large, and your customers. Being part of the global ecological initiative and demostrating your commitment to it will bring significant benefit to your firm's eco-credibility and, over time, your firm's profitability and goodwill.
By: Jim Lavorato
Monday, January 11, 2010
CUSTOMERS DRIVE SUSTAINABILITY
Completed in September, a survey undertaken by the Packaging Industry Digest (PID) reported that 66% of companies (across all products and industries) reported that customers are driving their sustainable decisions. However, the survey found that only 21% of companies have formal, written policies on sustainability. This points to a real disconnect between customers/consumers and companies' sustainable practices and policies. Additionally, a full 53% of companies reported they have no measurement tool in place to evaluate performance or track progress of their sustainable activities.
As a counterweight a whopping 93% of the companies surveyed stated that Green Washing - the deceptive use of marketing by companies to spin their products and policies as environmentally friendly - was an on-going problem in their purchasing decisions regarding sustainability.
The PID study which surveyed over 500 companies of various size further reported that 69% of companies expect to receive a return on their investment in sustainable upgrades and capital improvements. With 82% expecting a payback on their investment within 2 - 5 years.
When, not if, you begin planning for your company's sustainability contact the Arboreel Group* - which can assist, direct, provide follow-up, and quantify your progress, savings, and ROI.
*Arboreel Group - Designs, develops and certifies environmental sustainability programs and initiatives for cinemas and is managed jointly by Entertainment Equipment Corporation (entequip@aol.com) and Screentrade Magazine (screentrademagazine.com). Arboreel Group is a member of the U.S. Green Building Council and an EPA - EnergyStar participant.
As a counterweight a whopping 93% of the companies surveyed stated that Green Washing - the deceptive use of marketing by companies to spin their products and policies as environmentally friendly - was an on-going problem in their purchasing decisions regarding sustainability.
The PID study which surveyed over 500 companies of various size further reported that 69% of companies expect to receive a return on their investment in sustainable upgrades and capital improvements. With 82% expecting a payback on their investment within 2 - 5 years.
When, not if, you begin planning for your company's sustainability contact the Arboreel Group* - which can assist, direct, provide follow-up, and quantify your progress, savings, and ROI.
*Arboreel Group - Designs, develops and certifies environmental sustainability programs and initiatives for cinemas and is managed jointly by Entertainment Equipment Corporation (entequip@aol.com) and Screentrade Magazine (screentrademagazine.com). Arboreel Group is a member of the U.S. Green Building Council and an EPA - EnergyStar participant.
LOOKING AT CLOUDS
Want to reduce energy costs & consumption - one sure and simple way is to get rid of your computing equipment. If your company is large enough to run various applications on a daily basis look to the clouds for a solution.
Cloud computing is used to store, retrieve, and manipulate company files and data. Cloud computing users only use what they need and pay for only what they use. When a company stores applications in the clouds, money and energy is saved because applications run on shared infrastructure where many businesses are utilizing the same server. Think of your emails - they're in a cloud and do not reside on your PC.
Subscribing to a cloud service provider requires little or no capital. The service is delivered over the Internet for a monthly fee and has the potential of saving a business a lot of money.
Cloud computing has been in existence for several years so any "bugs" cloud providers may have experienced have now been solved, and they are very safe. Cloud providers include Amazon, Microsoft, and IBM to name just several.
Cloud computing is used to store, retrieve, and manipulate company files and data. Cloud computing users only use what they need and pay for only what they use. When a company stores applications in the clouds, money and energy is saved because applications run on shared infrastructure where many businesses are utilizing the same server. Think of your emails - they're in a cloud and do not reside on your PC.
Subscribing to a cloud service provider requires little or no capital. The service is delivered over the Internet for a monthly fee and has the potential of saving a business a lot of money.
Cloud computing has been in existence for several years so any "bugs" cloud providers may have experienced have now been solved, and they are very safe. Cloud providers include Amazon, Microsoft, and IBM to name just several.
Friday, January 08, 2010
THE TECHNICOLOR "OVER/UNDER" 3D
The Technicolor on-film system enables exhibitors (worldwide) to use their current 35mm projectors to exhibit 3D films. The on-screen image is comparable to digital 3D and will allow exhibitors to charge a ticket premium just like digital 3D.
Requirements for the Technicolor 3D are a silver screen and certain lighting and film projection parameters which must be met and maintained to run their system. Technicolor will provide a special lens to each exhibitor meeting the specified requirements. Proper evaluation of each auditorium to comply with Technicolor's projection specifications and installation of the lenses will need to be performed by a Technicolor certified cinema equipment dealer that is also a bonafide technical cinema service provider - such as Entertainment Equipment Corp.
The system works with industry accepted polarized glasses and all of the film prints will be optimized for 35mm 3D using Technicolor's new post-production over/under processing.
Requirements for the Technicolor 3D are a silver screen and certain lighting and film projection parameters which must be met and maintained to run their system. Technicolor will provide a special lens to each exhibitor meeting the specified requirements. Proper evaluation of each auditorium to comply with Technicolor's projection specifications and installation of the lenses will need to be performed by a Technicolor certified cinema equipment dealer that is also a bonafide technical cinema service provider - such as Entertainment Equipment Corp.
The system works with industry accepted polarized glasses and all of the film prints will be optimized for 35mm 3D using Technicolor's new post-production over/under processing.
Thursday, January 07, 2010
3D BECOMES MORE INCLUSIVE & PROFITABLE
Currently to run a 3D movie an exhibitor needs a Digital Cinema Projection system and a compliant 3D system - costing approx. $100,000. Given this situation, thus far, only a small number of cinema screens (approx. 3000 out of a total universe of 35,000 in the U.S.) have opted for this capability and the ones that have only upgraded one or two screens at each multiplex.
Now Technicolor, a stalwart in the cinema industry, has developed a new on-film 3D System which will be made available to exhibitors in the near future. The cost of the Technicolor 3D will be much less than the current digital based systems and should be viewed as very good news for both the studios and exhibitors.
3D films generate a significantly greater per screen gross vs. 2D versions of the same movie - so distribution of more 3D films should generate higher grosses and attendance. The U.S. boxoffice gross will exceed $10 billion for 2009 - a record, but not a lot of revenue for a major industry. For example, Wal-Mart grosses $10 billion in sales on any given day. However, the cultural footprint of the cinema is huge in comparison to its dollar value. And certainly for big media a movie's theatrical release is only a small portion of a movie's life cycle as a product. By lowering the cost of 3D, Technicolor's new on-film system will be a boom to the movie industry - both for distributors and exhibitors alike and validates the premise of those, like myself, who have been postulating for some years now, that going digital would be the demise of Hollywood as the studios would lose distribution control. And as we all know, in the digital domain, it's distribution, and not content, that is King.
Now Technicolor, a stalwart in the cinema industry, has developed a new on-film 3D System which will be made available to exhibitors in the near future. The cost of the Technicolor 3D will be much less than the current digital based systems and should be viewed as very good news for both the studios and exhibitors.
3D films generate a significantly greater per screen gross vs. 2D versions of the same movie - so distribution of more 3D films should generate higher grosses and attendance. The U.S. boxoffice gross will exceed $10 billion for 2009 - a record, but not a lot of revenue for a major industry. For example, Wal-Mart grosses $10 billion in sales on any given day. However, the cultural footprint of the cinema is huge in comparison to its dollar value. And certainly for big media a movie's theatrical release is only a small portion of a movie's life cycle as a product. By lowering the cost of 3D, Technicolor's new on-film system will be a boom to the movie industry - both for distributors and exhibitors alike and validates the premise of those, like myself, who have been postulating for some years now, that going digital would be the demise of Hollywood as the studios would lose distribution control. And as we all know, in the digital domain, it's distribution, and not content, that is King.
Monday, December 14, 2009
CINEMA and GREEN - What's The CONNECTION ?
Cinema Mucho Gusto is a blog which centers around commenting about the cinema industry, mainly from the perspective of movie distributors and exhibitors. So, you ask why are there so many posts about environmental issues ?
The answer is that two years ago this month I began thinking about the sustainability of cinemas and how much more " green " they could become and how to go about initiating that processs in the industry.
Cinemas are big users of paper products and energy. They are big boxes, essentially, divided into smaller boxes, but use a great deal of energy, as the utilization of cinemas is less then 15%. Meaning that 85% of the time when a movie is being played there is no one sitting in the seat.
I began my quest to make cinemas greener by educating myself. I read and studied everything I could find regarding the green movement and environmental sustainability of existing buildings. I join the U.S. Green Building Council and became a LEED associate, and developed a action plan to impliment my goals.
6 months later Arboreel, an environmental evaluation and rating system designed specifically for cinemas was conceived. Based upon LEED criteria, Arboreel is a unique process which moves cinemas along the sustainability path.
So,in response to the twenty or so blog comments I have received on this point, this is why Cinema Mucho Gusto has gone "Green" . And why the cinema related posts and opinions I write dovetail with the green commentary .
Jim Lavorato
The answer is that two years ago this month I began thinking about the sustainability of cinemas and how much more " green " they could become and how to go about initiating that processs in the industry.
Cinemas are big users of paper products and energy. They are big boxes, essentially, divided into smaller boxes, but use a great deal of energy, as the utilization of cinemas is less then 15%. Meaning that 85% of the time when a movie is being played there is no one sitting in the seat.
I began my quest to make cinemas greener by educating myself. I read and studied everything I could find regarding the green movement and environmental sustainability of existing buildings. I join the U.S. Green Building Council and became a LEED associate, and developed a action plan to impliment my goals.
6 months later Arboreel, an environmental evaluation and rating system designed specifically for cinemas was conceived. Based upon LEED criteria, Arboreel is a unique process which moves cinemas along the sustainability path.
So,in response to the twenty or so blog comments I have received on this point, this is why Cinema Mucho Gusto has gone "Green" . And why the cinema related posts and opinions I write dovetail with the green commentary .
Jim Lavorato
Thursday, November 05, 2009
NASCAR - GOES GREEN
If you think your business is not suitable for "greening" - think again. Even NASCAR - the epitome of fossil fuel excess (where race cars get only 5 mpg) - is going green.
Building solar farms at race tracks and camp grounds, renovating and outfitting race shops to meet sustainability standards, ramping up recycling programs, and marketing hybrids and high-efficiency products through racing are just a few initiatives on NASCAR's green agenda to reduce its carbon footprint.
Fueled by what it sees as its own need to improve the environment and its corporate sponsors' demand to leverage NASCAR's involvement in sustainability, NASCAR views "greening" as a long-term commitment. For example, Coca-Cola collected over 65,000 pounds of recyclable material at NASCAR races last year. While Safety-Kleen recycled 125,000 gallons of oil and 5,000 oil filters. Goodyear recycles all used tires. These sponsors get huge eco-cache from their NASCAR relationship and as a strategic commitment NASCAR sees only upside to turning over a new (green) leaf.
Building solar farms at race tracks and camp grounds, renovating and outfitting race shops to meet sustainability standards, ramping up recycling programs, and marketing hybrids and high-efficiency products through racing are just a few initiatives on NASCAR's green agenda to reduce its carbon footprint.
Fueled by what it sees as its own need to improve the environment and its corporate sponsors' demand to leverage NASCAR's involvement in sustainability, NASCAR views "greening" as a long-term commitment. For example, Coca-Cola collected over 65,000 pounds of recyclable material at NASCAR races last year. While Safety-Kleen recycled 125,000 gallons of oil and 5,000 oil filters. Goodyear recycles all used tires. These sponsors get huge eco-cache from their NASCAR relationship and as a strategic commitment NASCAR sees only upside to turning over a new (green) leaf.
THE ARBOREAL APPROACH
When speaking with people about Arboreal and the benefits of using our expertise regarding implementing environmental improvements and upgrades, invariably the
question arises as to whether the Arboreal approach to making buildings more environmentally sustainable uses a "thou-shalt-not" or negative approach. This couldn't be further from the truth. The main precept of Arboreal is it must work on the business side or it won't work at all.
Using and implementing Arboreal is a business "positive" both over the short and loong term and its impact can be seen and measured in expense reduction, business promotion and branding, and employee productivity.
question arises as to whether the Arboreal approach to making buildings more environmentally sustainable uses a "thou-shalt-not" or negative approach. This couldn't be further from the truth. The main precept of Arboreal is it must work on the business side or it won't work at all.
Using and implementing Arboreal is a business "positive" both over the short and loong term and its impact can be seen and measured in expense reduction, business promotion and branding, and employee productivity.
Tuesday, November 03, 2009
3D & D-Cinema - A Potent Boxoffice Combo
We have been marketing and installing D-Cinema/3D Systems. It appears that exhibitors who have decided to purchase a Digital Cinema Projection System are doing so only to take advantage of the 3D option. In fact, this year we have only sold and installed 3D/D-Cinema systems. Exhibitors are purchasing these combo Systems sparingly - only one or two per multiplex and placing them in their largest auditorium(s) - for use only when running 3D films.
Our system of choice is the Strong/NEC projector coupled with the Dolby Server and
3D System. We believe this combination presents the brightest and sharpest image - particularly for 3D. Although the Dolby viewing glasses must be purchased, after 25 uses they are paid for and the exhibitors can then retain any fee they are charging patrons for the viewing glasses, and there are no royalties or long-term agreements with the 3D system provider.
The 3D/D-Cinema Systems can be financed or leased. If interested, contact us for information on any of the Systems currently on the market.
SPEAKING OF 3D
What's the latest regarding 3D - well, it's all about the Home and both 3D - TVs and PCs.
In June, Nvidia, a PC graphics chip maker, introduced "3D Vision" - a $199 PC Upgrade Kit complete w/plug-in computer viewing glasses and while Samsung and Viewsonic currently make the highest quality 3D/PC monitors to go with Nvidia's 3D Vision all of the top PC vendors will introduce a 3D monitor in 2010. So, look for consumers to embrace 3D PCs first.
On the TV front, to make 3D viewing less expensive, TV manufacturers are not going to use the 3D technology currently in use at cinemas but a different technology called "active shutter". Active Shutter uses a set-top infrared emitter which transmits a signal to battery powered viewing glasses which turn on/off and give the perception of depth. The TV sets themselves will require very little upgrade.
3D TV could be the boost the Hollywood Studios need to revitalize the home video market. DVDs generate far more revenue and profits than the cinema; however, as of late DVDs have been steadily losing market share to pay-per-view and video on demand.
I believe 3D TV (using DVDs) and - without doubt - PCs will become a significant part of our video viewing and game playing over the next 3 - 5 years, and if successful, look for 3D TV broadcasting to reach homes within 5 - 7 years.
Our system of choice is the Strong/NEC projector coupled with the Dolby Server and
3D System. We believe this combination presents the brightest and sharpest image - particularly for 3D. Although the Dolby viewing glasses must be purchased, after 25 uses they are paid for and the exhibitors can then retain any fee they are charging patrons for the viewing glasses, and there are no royalties or long-term agreements with the 3D system provider.
The 3D/D-Cinema Systems can be financed or leased. If interested, contact us for information on any of the Systems currently on the market.
SPEAKING OF 3D
What's the latest regarding 3D - well, it's all about the Home and both 3D - TVs and PCs.
In June, Nvidia, a PC graphics chip maker, introduced "3D Vision" - a $199 PC Upgrade Kit complete w/plug-in computer viewing glasses and while Samsung and Viewsonic currently make the highest quality 3D/PC monitors to go with Nvidia's 3D Vision all of the top PC vendors will introduce a 3D monitor in 2010. So, look for consumers to embrace 3D PCs first.
On the TV front, to make 3D viewing less expensive, TV manufacturers are not going to use the 3D technology currently in use at cinemas but a different technology called "active shutter". Active Shutter uses a set-top infrared emitter which transmits a signal to battery powered viewing glasses which turn on/off and give the perception of depth. The TV sets themselves will require very little upgrade.
3D TV could be the boost the Hollywood Studios need to revitalize the home video market. DVDs generate far more revenue and profits than the cinema; however, as of late DVDs have been steadily losing market share to pay-per-view and video on demand.
I believe 3D TV (using DVDs) and - without doubt - PCs will become a significant part of our video viewing and game playing over the next 3 - 5 years, and if successful, look for 3D TV broadcasting to reach homes within 5 - 7 years.
Tuesday, October 13, 2009
3-D TV- Will The Public 'BUY' In?
In an attempt to get TV sales back on a positive trajectory - now that flat-panels have saturated the marketplace - TV manufacturers are taking a page from Hollywood's playbook in embracing 3-D and are planning on mass marketing 3-D TVs.
You'll need to wear those pesky glasses to view it and although no pricing has been released, it's rumored Panasonic will market (under its Viera brand) a 50 inch plasma 3-D TV for over $2,000 and charge $50/pair for the glasses (you'll also need to obtain a Blu-ray DVD player). Additionally, Sony has announced that it will be introducing 3-D TV technology through its Bravia TV brand, in Vaio notebooks, and in its PlayStation 3 video game console.
3-D TV works by rapidly alternating between left and right frames of the video being played. Viewers wear glasses that sync with the television via an infrared signal. The right frame is seen only with the right eye, the left frame only with the left eye, creating the illusion of depth.
HOLLYWOOD LEADS THE WAY
The movie industry has embraced 3-D and TV manufacturers want to capitalize on this trend. The studios, in turn, are eager to sell 3-D films on Blu-ray DVDs. Additionally, the TV manufacturers hope that promoting 3-D technology with Hollywood will spur TV broadcasters to start offering 3-D programming - however, this would entail major investments in filming and broadcasting in 3-D images. We'll keep you informed.
The Impact Of Pending Climate Legislation On Your Cinema
Climate legislation that is currently winding its way through the U.S. Congress will affect all businesses - so readying your cinema for climate policy changes is prudent. Compliance with forthcoming energy reporting requirements, usage/reduction standards will necessitate a proactive posture in determining your facilities' energy profile.
WHAT IS SURE TO HAPPEN
Whatever is enacted you can be sure it will include reporting energy usage within a specific time frame. This will require tracking and monitoring usage, setting benchmarks, collecting and consolidating data, and then acting upon it. This is the first step in avoiding the inevitable carbon taxes that the new legislation will bring. Additionally, states may tax energy use above what the federal government will enact. For example, legislation may drive up the cost of electricity in those states where coal-fired plants provide power.
The most important thing for businesses to do is to be aware of and plan for the future. If you wait too long to start implementing basic energy measurement and monitoring you might find yourself spending more in the long run.
ARBOREEL GROUP TIPS: What To Do NOW!
- Begin measuring energy usage TODAY!
- Make your business as energy efficient as possible to lower or mitigate the coming CARBON-USE tax,
- Monitor your energy use, set up benchmarks, START improving your sustainability.
- RETAIN a reputable environmental consultant.
These actions are inexpensive and will have a huge pay-off in the future and get you moving on what is inevitable. Contact Arboreel Group for more information.
WHAT IS SURE TO HAPPEN
Whatever is enacted you can be sure it will include reporting energy usage within a specific time frame. This will require tracking and monitoring usage, setting benchmarks, collecting and consolidating data, and then acting upon it. This is the first step in avoiding the inevitable carbon taxes that the new legislation will bring. Additionally, states may tax energy use above what the federal government will enact. For example, legislation may drive up the cost of electricity in those states where coal-fired plants provide power.
The most important thing for businesses to do is to be aware of and plan for the future. If you wait too long to start implementing basic energy measurement and monitoring you might find yourself spending more in the long run.
ARBOREEL GROUP TIPS: What To Do NOW!
- Begin measuring energy usage TODAY!
- Make your business as energy efficient as possible to lower or mitigate the coming CARBON-USE tax,
- Monitor your energy use, set up benchmarks, START improving your sustainability.
- RETAIN a reputable environmental consultant.
These actions are inexpensive and will have a huge pay-off in the future and get you moving on what is inevitable. Contact Arboreel Group for more information.
HOW MUCH DO IDLE APPLIANCES CONSUME?
An idle cell phone charger uses .25 watts. Other items are much worse.
Coffee Maker 1.14 watts
Printer 1.26
Microwave 3.08
Cable Modem 3.85
CD Player 5.04
Fax 5.31
Laptop 15.77
Cable Box/DVR 43.46
Arboreel Group Tip: SHUT-IT-OFF: it may not be convenient but it is painless and will save money and energy!
Coffee Maker 1.14 watts
Printer 1.26
Microwave 3.08
Cable Modem 3.85
CD Player 5.04
Fax 5.31
Laptop 15.77
Cable Box/DVR 43.46
Arboreel Group Tip: SHUT-IT-OFF: it may not be convenient but it is painless and will save money and energy!
Wednesday, October 07, 2009
TECHNICOLOR'S NEW - ON FILM - 3-D SYSTEM
Termed - "over-under" - Technicolor's new (but yet to be sold), on film 3-D projection process may well be the formula needed by the cinema industry. Technicolor, owned by Thompson, the French media technology company, is one of the largest processors of movie film - it will process over 3 billion feet this year - but is also the leader in the processing and distribution of digital cinema. In all, Technicolor generates $3 billion in annual revenue - about 45% of Thompson's total.
Principally, because of its high expense, Digital Cinema - which has been available since 2000 - has not been widely accepted by movie theatres primarily because it has no positive impact on boxoffice admissions. Currently there are only 6500 Digital Cinema installations out of a universe of 39,000 total screens in the U.S.
Now, Hollywood has embraced 3-D which requires a D-Cinema projection system. However, this has not moved exhibitors to mass conversion either as 3-D films have not really "pushed" the boxoffice. Through mid-September the U.S. boxoffice - including eighteen 3-D releases - totaled $7.6 billion, only 7.4% over 2008, while admissions were only 35,000 higher!
Recently, however, Technicolor unveiled a system that can exhibit 3-D movies using existing 35mm film projectors - saving exhibitors the expensive investment required for a Digital/3D projection system (about $90,000). Technicolor's belief is that many more screens will convert to 3-D using their much less expensive system.
Rumor has it that Technicolor's 3-D system will be priced under $8,000 and be comprised of a state-of-the-art split projection lens and polarized glasses which when coupled with a split 35mm film frame produces an excellent on-screen 3-D image.
To date, Technicolor has not provided a timeframe as to when their 3-D system will be available.
MOVIES ON PHONES - WHY NOT
mSpot, a U.S. mobile entertainment company, has begun offering full-length movies for streaming to cell phones. In an announcement last week, mSpot stated it has signed deals with Paramount, Universal, and the Weinstein Co. to bring movies to the "tiny screen". Currently, 300 movies are available. Termed, Mobile Movies, they are available (thus far) only in the U.S. on 4 mobile carriers and 30 different phones including iPhones, Blackberries, and Androids.
The movies are streamed directly to the user's phone - and can be stopped and started on demand. A movie downloaded from mSpot costs $4.99. Note: I recommend users have an unlimited data plan with their mobile carrier.
CAN TWITTER MAKE OR BREAK A MOVIE?
When people view a movie, if they Twitter their critique as they walk out of the cinema their impact is instantaneous. That is called the Twitter Effect. Can it break or boost boxoffice performance? Maybe not yet, but social networking platforms will continue to impact the studios' marketing campaigns. The Twitter Effect came to life after Hollywood blamed Twitterers from panning Universal's "Bruno" which supposedly caused that film's lackluster boxoffice.
To counteract, Sony Pictures, recently created branded Twitter pages for its films. These sites are meant to keep the "conversation" around each film active and updated. Sony has dedicated staffers who manage and measure social-networking activity around their films - manufacturing hype for the film around those all important first three days of cinema release.
As Peter Bradshaw, VP at Nielsen Ratings On-Line stated, "The name of the game for studios is to take full advantage of all the early signals - the buzz - on a film. The downside is a movie can be damaged very quickly". The flow of information on Twitter, and other social network platforms, is fast and their influence - at least for now - unmeasurable.
ARBOREEL NOTES
The latest in electronic recycling is the EcoATM which pays you for used/old electronic gadgets! The EcoATM is a self-serve kiosk that electronically inspects a cell phone, or other device, assigns it a value, and automatically issues a gift card or an in-store coupon. If the phone has no resale value you can choose to re-take the phone, or request that the phone be retained and re-cycled.
EcoATM, a San Diego start-up, is using the Nebraska Furniture Mart in Omaha, as its first test site. The company plans to install kiosks at wireless stores, as well as, big-box retailers beginning in 2010.
EcoATM's will be able to recognize phones, MP3 players, digital cameras, notebooks, printers, and storage devices, and rely on a camera-based system that detects wear, cracked screens, missing keys, etc. to determine the device's value. If it's not worth anything, users can still get a free gift - such as a waterproof phone case. Retailers get the EcoATM installed free. Obvious incentives include: reward tie-ins, increased foot traffic, and eco-cachet for your cinema. Eco-cachet is a term I coined to dsscribe the consumer goodwill afforded businesses that embrace green initiatives.
Consumer convenience is important to solving the huge e-waste issue and the EcoATM is a great way for cinemas to participate. The EcoATM is aimed at the growing problem of e-waste. In the U.S. alone, over 100 million cell phones are thrown away each year.
For more information, contact us.
Principally, because of its high expense, Digital Cinema - which has been available since 2000 - has not been widely accepted by movie theatres primarily because it has no positive impact on boxoffice admissions. Currently there are only 6500 Digital Cinema installations out of a universe of 39,000 total screens in the U.S.
Now, Hollywood has embraced 3-D which requires a D-Cinema projection system. However, this has not moved exhibitors to mass conversion either as 3-D films have not really "pushed" the boxoffice. Through mid-September the U.S. boxoffice - including eighteen 3-D releases - totaled $7.6 billion, only 7.4% over 2008, while admissions were only 35,000 higher!
Recently, however, Technicolor unveiled a system that can exhibit 3-D movies using existing 35mm film projectors - saving exhibitors the expensive investment required for a Digital/3D projection system (about $90,000). Technicolor's belief is that many more screens will convert to 3-D using their much less expensive system.
Rumor has it that Technicolor's 3-D system will be priced under $8,000 and be comprised of a state-of-the-art split projection lens and polarized glasses which when coupled with a split 35mm film frame produces an excellent on-screen 3-D image.
To date, Technicolor has not provided a timeframe as to when their 3-D system will be available.
MOVIES ON PHONES - WHY NOT
mSpot, a U.S. mobile entertainment company, has begun offering full-length movies for streaming to cell phones. In an announcement last week, mSpot stated it has signed deals with Paramount, Universal, and the Weinstein Co. to bring movies to the "tiny screen". Currently, 300 movies are available. Termed, Mobile Movies, they are available (thus far) only in the U.S. on 4 mobile carriers and 30 different phones including iPhones, Blackberries, and Androids.
The movies are streamed directly to the user's phone - and can be stopped and started on demand. A movie downloaded from mSpot costs $4.99. Note: I recommend users have an unlimited data plan with their mobile carrier.
CAN TWITTER MAKE OR BREAK A MOVIE?
When people view a movie, if they Twitter their critique as they walk out of the cinema their impact is instantaneous. That is called the Twitter Effect. Can it break or boost boxoffice performance? Maybe not yet, but social networking platforms will continue to impact the studios' marketing campaigns. The Twitter Effect came to life after Hollywood blamed Twitterers from panning Universal's "Bruno" which supposedly caused that film's lackluster boxoffice.
To counteract, Sony Pictures, recently created branded Twitter pages for its films. These sites are meant to keep the "conversation" around each film active and updated. Sony has dedicated staffers who manage and measure social-networking activity around their films - manufacturing hype for the film around those all important first three days of cinema release.
As Peter Bradshaw, VP at Nielsen Ratings On-Line stated, "The name of the game for studios is to take full advantage of all the early signals - the buzz - on a film. The downside is a movie can be damaged very quickly". The flow of information on Twitter, and other social network platforms, is fast and their influence - at least for now - unmeasurable.
ARBOREEL NOTES
The latest in electronic recycling is the EcoATM which pays you for used/old electronic gadgets! The EcoATM is a self-serve kiosk that electronically inspects a cell phone, or other device, assigns it a value, and automatically issues a gift card or an in-store coupon. If the phone has no resale value you can choose to re-take the phone, or request that the phone be retained and re-cycled.
EcoATM, a San Diego start-up, is using the Nebraska Furniture Mart in Omaha, as its first test site. The company plans to install kiosks at wireless stores, as well as, big-box retailers beginning in 2010.
EcoATM's will be able to recognize phones, MP3 players, digital cameras, notebooks, printers, and storage devices, and rely on a camera-based system that detects wear, cracked screens, missing keys, etc. to determine the device's value. If it's not worth anything, users can still get a free gift - such as a waterproof phone case. Retailers get the EcoATM installed free. Obvious incentives include: reward tie-ins, increased foot traffic, and eco-cachet for your cinema. Eco-cachet is a term I coined to dsscribe the consumer goodwill afforded businesses that embrace green initiatives.
Consumer convenience is important to solving the huge e-waste issue and the EcoATM is a great way for cinemas to participate. The EcoATM is aimed at the growing problem of e-waste. In the U.S. alone, over 100 million cell phones are thrown away each year.
For more information, contact us.
Friday, October 02, 2009
Digital Cinema/3D Bulletin - Issue #101
This is the first Cinema Mucho Gusto Digital Cinema Bulletin. It is a new service for clients that have purchased a Digital Cinema projection system or have expressed interest in doing so. Each Bulletin will provide timely and pertinent information on D-Cinema and 3D technology, relevant industry news, and provide recommendations on new and existing equipment, products and services.
THE 3D OPTION - This Bulletin is devoted to discussing 3D Systems:
- All 3D Systems are optional additions to any Digital Cinema System.
- Currently there are five 3D Systems available. However, we consider only the Dolby, Master Image and Real-D to be viable purchase options. For a "Comparison Of Existing 3D Systems" - entequip@aol.com.
- We believe that the 3D movie presentation provides the impetus for the purchase of a Digital Cinema System, as having the 3D option enhances boxoffice attendance and additional concession sales.
- Early adopters of the 3D option may benefit at the expense of other movie exhibitors which do not offer a 3D presentation. However, we believe over time this competitive advantage will abate as:
- Hollywood may lose interest in distributing 3D films
- More exhibitors install 3D Systems
- The public's diminishing interest in 3D films and/or their premium admission
price
- Financing Digital Cinema & 3D Systems
- Outright purchasing of equipment - Dolby 3D
- Royalty deals:
- Real-D - 10 years exclusive with a Royalty paid to Real-D on each 3D
admission
- Master Image - $5,000+ either 45 cents/ticket sold for 5 yrs. or
$600/month for 5 yrs.
- Leasing:
- There are a number of leasing companies willing to finance D-Cinema/
3D equipment purchases - call for information.
- 3D Systems Recurring Costs:
- Annual Service of Equipment
- Maintenance/Repair Service - As needed
- Xenon Lamp Replacements - Varies w/Lamp Size & Usage
- System Software Upgrades - Varies w/Manufacturers
By Jim Lavorato
THE 3D OPTION - This Bulletin is devoted to discussing 3D Systems:
- All 3D Systems are optional additions to any Digital Cinema System.
- Currently there are five 3D Systems available. However, we consider only the Dolby, Master Image and Real-D to be viable purchase options. For a "Comparison Of Existing 3D Systems" - entequip@aol.com.
- We believe that the 3D movie presentation provides the impetus for the purchase of a Digital Cinema System, as having the 3D option enhances boxoffice attendance and additional concession sales.
- Early adopters of the 3D option may benefit at the expense of other movie exhibitors which do not offer a 3D presentation. However, we believe over time this competitive advantage will abate as:
- Hollywood may lose interest in distributing 3D films
- More exhibitors install 3D Systems
- The public's diminishing interest in 3D films and/or their premium admission
price
- Financing Digital Cinema & 3D Systems
- Outright purchasing of equipment - Dolby 3D
- Royalty deals:
- Real-D - 10 years exclusive with a Royalty paid to Real-D on each 3D
admission
- Master Image - $5,000+ either 45 cents/ticket sold for 5 yrs. or
$600/month for 5 yrs.
- Leasing:
- There are a number of leasing companies willing to finance D-Cinema/
3D equipment purchases - call for information.
- 3D Systems Recurring Costs:
- Annual Service of Equipment
- Maintenance/Repair Service - As needed
- Xenon Lamp Replacements - Varies w/Lamp Size & Usage
- System Software Upgrades - Varies w/Manufacturers
By Jim Lavorato
Wednesday, September 16, 2009
'GREEN' PAYS OFF
SUSTAINABILITY DOESN'T MEAN MORE EXPENSE
It's easy to say you want to go green and a lot tougher to figure out where to get started. Going green can be viewed along the lines of doing more with less or accomplishing the same amount while being more efficient with your use of energy and water.
Under the current economic situation and with all the green washing in the marketplace businesses need to be wary and smart. A recent survey by the U.S. Department of Commerce reported that 70% of companies surveyed reported they have no funds directly budgeted for green improvements or initiatives and many organizations remain myopic on sustainability - a business driver that requires a wide focus.
WHERE TO START
- Figure out where you are. Make a thorough assessment of your current energy and consumables use, then implement green procedures and recycling policies. Cost - $0.
- Develop a strategy. Decide upon an action plan. Start with small steps and implement initiatives you know will work and are easily accomplished. Investigate outside incentives and programs. For example, make use of the current tax laws for rapid ROI to justify any capital outlays. Cost - $0.
- Update purchasing policies. Build sustainability into procurement. Accelerate, whenever possible, acquisition of newer, more efficient equipment to avoid escalating energy costs due to old, inefficient hardware. Cost - $0.
- Engage employees. Green initiatives go nowhere unless they are promoted. Educate employees and bring them into the process early on. Cost - $0.
ACTION PLAN
- MEASURE: Arm yourself with as much information about the company's consumption of energy and water, your waste disposal and recycling procedures, and your staff's work habits and policies and then set a baseline for consumption, reuse, and re-education.
- ANALYZE: Once you've set the baseline it is much easier to identify offenders, uncover wasteful practices and begin to implement new, greener ways of conducting business.
- ACT: Adjust operations and schedules as is warranted. Replace, repair, and turn-off offending equipment and embrace no cost or often inexpensive solutions to consumption. Keep in mind that every initiative, however small, will generate savings and compound those savings over time.
Starting and implementing green business practices should be a top priority for all organizations, particularly in these sluggish economic times. For little or no cost and with a guaranteed payback going or becoming greener is not a political or feel good issue but a business imperative where failure to act indicates poor management judgment.
It's easy to say you want to go green and a lot tougher to figure out where to get started. Going green can be viewed along the lines of doing more with less or accomplishing the same amount while being more efficient with your use of energy and water.
Under the current economic situation and with all the green washing in the marketplace businesses need to be wary and smart. A recent survey by the U.S. Department of Commerce reported that 70% of companies surveyed reported they have no funds directly budgeted for green improvements or initiatives and many organizations remain myopic on sustainability - a business driver that requires a wide focus.
WHERE TO START
- Figure out where you are. Make a thorough assessment of your current energy and consumables use, then implement green procedures and recycling policies. Cost - $0.
- Develop a strategy. Decide upon an action plan. Start with small steps and implement initiatives you know will work and are easily accomplished. Investigate outside incentives and programs. For example, make use of the current tax laws for rapid ROI to justify any capital outlays. Cost - $0.
- Update purchasing policies. Build sustainability into procurement. Accelerate, whenever possible, acquisition of newer, more efficient equipment to avoid escalating energy costs due to old, inefficient hardware. Cost - $0.
- Engage employees. Green initiatives go nowhere unless they are promoted. Educate employees and bring them into the process early on. Cost - $0.
ACTION PLAN
- MEASURE: Arm yourself with as much information about the company's consumption of energy and water, your waste disposal and recycling procedures, and your staff's work habits and policies and then set a baseline for consumption, reuse, and re-education.
- ANALYZE: Once you've set the baseline it is much easier to identify offenders, uncover wasteful practices and begin to implement new, greener ways of conducting business.
- ACT: Adjust operations and schedules as is warranted. Replace, repair, and turn-off offending equipment and embrace no cost or often inexpensive solutions to consumption. Keep in mind that every initiative, however small, will generate savings and compound those savings over time.
Starting and implementing green business practices should be a top priority for all organizations, particularly in these sluggish economic times. For little or no cost and with a guaranteed payback going or becoming greener is not a political or feel good issue but a business imperative where failure to act indicates poor management judgment.
Thursday, August 20, 2009
FIRST READ - THE REDBOX SAGA
FIRST READ
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?
CTC FALL TRAINING PROGRAMS
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.
eBOOK WARS BEGIN - ANOTHER DISTRIBUTION BATTLE
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.
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?
CTC FALL TRAINING PROGRAMS
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.
eBOOK WARS BEGIN - ANOTHER DISTRIBUTION BATTLE
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
CINEMA TRAINING TO INCLUDE GREEN TOPICS
'EARLY BIRD' REGISTRATION SAVES $'s
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.
"THEATRE DESIGN & PLANNING" WORKSHOP
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.
WHEN DO MOVIEGOERS PICK THE FLIX?
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.
ARBOREEL NEWS
EPEAT FOR TVS
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.
WATER $
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.
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.
"THEATRE DESIGN & PLANNING" WORKSHOP
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.
WHEN DO MOVIEGOERS PICK THE FLIX?
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.
ARBOREEL NEWS
EPEAT FOR TVS
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.
WATER $
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
DVD VIDEO GAME CHANGER
REDBOX BATTLES HOLLYWOOD
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.
CINEMA TRAINING CENTRAL - NEWS
PARENTS SPEND MORE THAN OTHERS ON CONCESSIONS
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.
SPEAKING OF SWEETS
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.
CTC WORKSHOPS ADD GREEN
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.
THE SOLE SOURCE FOR CINEMA TRAINING
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.
ARBOREEL NEWS
SINGLE-STREAM RECYCLING - GOOD OR BAD?
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.
A SMALL ECO-FRIENDLY STEP FOR CINEMAS
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.
ARBOREEL CERTIFICATION
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.
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.
CINEMA TRAINING CENTRAL - NEWS
PARENTS SPEND MORE THAN OTHERS ON CONCESSIONS
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.
SPEAKING OF SWEETS
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.
CTC WORKSHOPS ADD GREEN
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.
THE SOLE SOURCE FOR CINEMA TRAINING
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.
ARBOREEL NEWS
SINGLE-STREAM RECYCLING - GOOD OR BAD?
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.
A SMALL ECO-FRIENDLY STEP FOR CINEMAS
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.
ARBOREEL CERTIFICATION
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.
Thursday, July 02, 2009
THE BLACK SIDE OF GREEN BUILDING
For some companies "going green" means changing light bulbs and installing a new thermostat. For others - those that are serious - it means taking the first steps on a journey to sustainability based upon a strategic commitment. The decision is not whether to go green, rather to go it alone or retain the assistance of a green building specialist.
More and more the decision is to use an environmental spcialist - that is the wise choice. In the overall development of a sustainability program, the price of utilizing a specialist who expedites, advises, and provides the critical expertise required to formulate and implement an environmental initiative is prudent.
BACKGROUND
In the U.S. alone, commercial buildings consume 39% of energy, 72% of electricity, and account for 35% of greenhouse emissions. Given this impact, the recently enacted American Recovery and Reinvestment Act of 2009 contains tens of billions of dollars in funding for green building incentives available to businesses. On the flipside, federal agencies and state and municipal governments are beginning to enact green building standards and mandates for any new commercial construction or renovation.
Like the Arboreel Group, environmental specialists - schooled in the art of green building operation and maintenance - provide the guiding hand that: streamlines the process, delineates best resource use (money and staff), trains, and perhaps more importantly, advises on a variety of (what I term) unforeseeable factors. In this article I discuss but one of these factors - the potential legal risks surrounding green building and how a qualified environmental specialist can provide a blueprint for avoiding legal entanglement.
THE RISKS
As green building and operations expand from the exception to the rule, certain legal risks are inevitable. Lawsuits related to negligence and fraud, violation of consumer protection laws, and failure to meet certification standards resulting in loss of tax credits are but a few examples. And those parties involved - owners, tenants, designers, architects, engineers and contractors - should be advised of these liabilities and the strategies to minimize or eliminate them. This is where competent environmental specialists comes in.
For example, owners risk that their projects will fail to achieve the required or desired green building standards or certification and thus fail to qualify for tax credits. Design professionals (architects, engineers and interior consultants) may face a higher standard of care and heightened liability stemming from design defects, liability due to the failure of systems or components to perform adequately over the building's life cycle, or trigger insurance exclusions where certain green outcomes were expected.
Contractors risk liability stemming from a failure to deliver contracted green builidng requirements, or from non-performing green products where sustainability outcomes were guaranteed. Tenants risk that the building fails to meet expectations for tax credits and abatements received based upon reduced energy use, etc.
Breach of contract claims might include breach of the implied warrants of construction materials, workmanship and purpose, or failure to deliver and/or meet energy efficiency standards. Parties may also be subject to fraud claims resulting from false or misleading statements regarding the performance of the building.
MITIGATING THE RISKS
Having a qualified environmental specialist greatly aids mitigating potential liabilities, especially when these issues are managed with thoughtful attention to detail. Here I identify four ways to minimize these legal risks:
1. The project management process must clarify the project goals up-front.
Use an integral design process, and assure the free-flow of project
information.
2. Each and every contract should be drafted to ensure the contractual
language clearly reflects the expectations for certifications, tax credits,
and future sustainability. This would include timeline and documentation
requirements, provide for non-performance damages and detail expectations of
tenant's benefits and obligations.
3. Design professionals and owners must pay special attention to their
insurance policies and seek coverage for green-specific warranties or
services.
4. Owners, tenants, and buyers need be mindful that any disclosures and
marketing materials defining expectations and risks for a green
construction project are aligned with reality.
Legal firms do not and cannot pretend to know all the issues regarding green building materials, green certification standards and requirements, and are neither trained nor equipped to effectively liaise with all of the team members and the numerous project nuances as does an environmental specialist.
AN OUNCE OF PREVENTION GOES A LONG WAY
The benefits of going green are undeniable and non-arguable, but you must ensure the legal risks and pitfalls in the process are mitigated through retaining qualified professionals to asssist in the journey toward sustainability.
Green building is defined as an effort to apply principles of environmental sustainablity to every aspect of the construction and renovation of buildings. This presents three main bases for legal liability: breach of contract, fraud and negligence.
Mitigating your exposure in going green rests heavily upon assigning the right in-house staff to manage the project and having the right environmental specialist on your team to provide the required sustainability expertise that is imperative.
This article presents only one of the unforeseen risks of going green - to think that any business can ignore the greening issue and maintain a status quo posture is delusional. Going green is a long-term cultural commitment for any company, but a journey that will have to be taken. Currently for new builds there is no green option, for existing buildings it is quasi-optional. However, in the near future all existing structures will be mandated to effect a greener footprint - this is the future.
By: Jim Lavorato
President, Entertainment Equipment Corporation and Principal, Arboreel Group
More and more the decision is to use an environmental spcialist - that is the wise choice. In the overall development of a sustainability program, the price of utilizing a specialist who expedites, advises, and provides the critical expertise required to formulate and implement an environmental initiative is prudent.
BACKGROUND
In the U.S. alone, commercial buildings consume 39% of energy, 72% of electricity, and account for 35% of greenhouse emissions. Given this impact, the recently enacted American Recovery and Reinvestment Act of 2009 contains tens of billions of dollars in funding for green building incentives available to businesses. On the flipside, federal agencies and state and municipal governments are beginning to enact green building standards and mandates for any new commercial construction or renovation.
Like the Arboreel Group, environmental specialists - schooled in the art of green building operation and maintenance - provide the guiding hand that: streamlines the process, delineates best resource use (money and staff), trains, and perhaps more importantly, advises on a variety of (what I term) unforeseeable factors. In this article I discuss but one of these factors - the potential legal risks surrounding green building and how a qualified environmental specialist can provide a blueprint for avoiding legal entanglement.
THE RISKS
As green building and operations expand from the exception to the rule, certain legal risks are inevitable. Lawsuits related to negligence and fraud, violation of consumer protection laws, and failure to meet certification standards resulting in loss of tax credits are but a few examples. And those parties involved - owners, tenants, designers, architects, engineers and contractors - should be advised of these liabilities and the strategies to minimize or eliminate them. This is where competent environmental specialists comes in.
For example, owners risk that their projects will fail to achieve the required or desired green building standards or certification and thus fail to qualify for tax credits. Design professionals (architects, engineers and interior consultants) may face a higher standard of care and heightened liability stemming from design defects, liability due to the failure of systems or components to perform adequately over the building's life cycle, or trigger insurance exclusions where certain green outcomes were expected.
Contractors risk liability stemming from a failure to deliver contracted green builidng requirements, or from non-performing green products where sustainability outcomes were guaranteed. Tenants risk that the building fails to meet expectations for tax credits and abatements received based upon reduced energy use, etc.
Breach of contract claims might include breach of the implied warrants of construction materials, workmanship and purpose, or failure to deliver and/or meet energy efficiency standards. Parties may also be subject to fraud claims resulting from false or misleading statements regarding the performance of the building.
MITIGATING THE RISKS
Having a qualified environmental specialist greatly aids mitigating potential liabilities, especially when these issues are managed with thoughtful attention to detail. Here I identify four ways to minimize these legal risks:
1. The project management process must clarify the project goals up-front.
Use an integral design process, and assure the free-flow of project
information.
2. Each and every contract should be drafted to ensure the contractual
language clearly reflects the expectations for certifications, tax credits,
and future sustainability. This would include timeline and documentation
requirements, provide for non-performance damages and detail expectations of
tenant's benefits and obligations.
3. Design professionals and owners must pay special attention to their
insurance policies and seek coverage for green-specific warranties or
services.
4. Owners, tenants, and buyers need be mindful that any disclosures and
marketing materials defining expectations and risks for a green
construction project are aligned with reality.
Legal firms do not and cannot pretend to know all the issues regarding green building materials, green certification standards and requirements, and are neither trained nor equipped to effectively liaise with all of the team members and the numerous project nuances as does an environmental specialist.
AN OUNCE OF PREVENTION GOES A LONG WAY
The benefits of going green are undeniable and non-arguable, but you must ensure the legal risks and pitfalls in the process are mitigated through retaining qualified professionals to asssist in the journey toward sustainability.
Green building is defined as an effort to apply principles of environmental sustainablity to every aspect of the construction and renovation of buildings. This presents three main bases for legal liability: breach of contract, fraud and negligence.
Mitigating your exposure in going green rests heavily upon assigning the right in-house staff to manage the project and having the right environmental specialist on your team to provide the required sustainability expertise that is imperative.
This article presents only one of the unforeseen risks of going green - to think that any business can ignore the greening issue and maintain a status quo posture is delusional. Going green is a long-term cultural commitment for any company, but a journey that will have to be taken. Currently for new builds there is no green option, for existing buildings it is quasi-optional. However, in the near future all existing structures will be mandated to effect a greener footprint - this is the future.
By: Jim Lavorato
President, Entertainment Equipment Corporation and Principal, Arboreel Group
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