Never mind the concerns about movie theaters suffering from declining appeal to Millennials, a shift of interest to home video, growing technology costs, or even the Justice Department’s investigation of exclusive local clearance deals. The industry is doing fine, National Association of Theater Owners VP Patrick Corcoran told investors this morning at the Gabelli & Co. annual Movie & Entertainment Conference.
Teen and Millennials “continue to overindex in terms of how often they go to the movies,” he says — challenging the thesis of a provocative article in The Atlantic yesterday that said Hollywood has “a huge Millennial problem.”
Statistics showing diminishing movie attendance by young adults often are skiewed because they depend on surveys conducted via landline phones. The mobile generation is “incredibly hard to reach.”
Other research shows that Millennial attendance has been “growing by double digits for the last five years, and into the first quarter of this year,” Corcoran says. What’s more, “the movies they go to are the premium, higher ticket price movies.”
The NATO representative also.rejects the idea that theaters are too dependent on a handful of blockbusters.
“We had a lot of people who hadn’t been to the movie theaters for a long time come back for Star Wars,” he says. Many were surprised to see how much has changed — for example with digital projection and more sophisticated concessions. That will pay off because “moviegoing begets moviegoing.”
Corcoran defended theaters’ struggle to maintain their ability to exclusively offer new releases.
Netflix — which is producing films it simultaneously releases on its platform — “does the same thing,” he says. When new episodes of its series House of Cards debut they are “not available on Hulu, DVD or pay TV.”
Regarding the recent debate over a premium VOD service, The Screening Room, Corcoran says that it “got a lot of attention in the press but not a lot of traction in the industry itself.” Supporters said that adding a home market for new films would encourage studios to produce more high quality films, and that would benefit theaters.
But Corcoran says that “the press to get to the home market is for the home market, not to save theatrical.” As the DVD business declined, the home video business offers studios far less than theaters do when you take streaming services such as Netflix, straight-to-video releases, and TV series out of the equasion.
Even so, exhibition and studio execs are engaging in “face to face talks” to consider opportunities to open home video opportunities without encroaching on theaters.
The conversations are important because theater owners need to weigh the potential pay off of investments in new projection and audio technology. “We’re head and shoulders ahead of the home and we want to keep that technological edge.,” Corcoran says.
For now, theaters are focusing their investments in their premium, often large screen, venues. “You can test it out to see if the audience notices…Theater companies are going to continue to experiment.”
To avoid violating antitrust laws, NATO can’t become directly involved in the debate over efforts by large theater chains to negotiate clearance deals with studios — terms that would give an exhibitor exclusive access to major releases in a community. Small and independent theaters say that makes it too hard for them to compete.
Yet Corcoran says that DOJ’s interest in the movie business “far outweighs the size of our industry.He adds that he trusts “it will go away very soon.”