UPDATED, 1:00 PM: Asked by Deadline about whether the studios or other companies will be able to pull off Premium Video on Demand (PVOD), NATO President and CEO John Fithian said, “Going back to 2010 (we) said, ‘Let’s stop fighting publicly about the future of our release dates, this is about growing the pie for everyone.’ So, our partners in distribution and our partners in exhibition said let’s talk about how to grow the business together … finding a way to grow the home market is important not only to distributors but also exhibitors. It’s tricky but it is doable,” he said.
“These things need to be discussed privately and negotiated comprehensively and then go publicly,” he said, adding that they “went nuts” when word of a new PVOD business to shorten the theatrical window broke in the press. “Our strong encouragement to our partners in distribution is to keep going, but we need to talk about this privately. What you have not seen from exhibitors is public comment about release dates and price points. We’re not going to talk about it publicly and neither our our members. There may be a whole lot more on the table than what they talked about.” He said his advice for everyone is to keep going and find solutions for everyone.
What will NATO’s role in this be? Fithian said, “Cheerleaders for the process … a collaborative process. Once you start discussing competitive terms, we’re out of it.” Asked about independent operators and their opinion, Fithian said, “The independents are having their voice heard.” He said some of them have come to Los Angeles to have their own discussions. “The independents are engaging themselves” in finding the solution and share in that process.
Asked about the worry about piracy with PVOD, he said, “Yes, some people have argued that shortening windows is a way to fight piracy. The data shows that there are two big piracy periods, when the movie first hits theaters … and that’s with camcorders (and the like) … and then as the awareness off the movie dies down, we see drops in piracy and there is virtual no piracy on a movie until its get ready for digital and then there is a second spike in piracy … so if you shrink the release windows, all you are doing is accelerating the second wave of piracy.” He said the industry lose about $1.8B in ticket sales a year in piracy. He said if there is a new early window, “there has to be really, really, really good protection against piracy.”
PREVIOUSLY, TUES, 10:58 AM: NATO President and CEO John Fithian said Tuesday at CinemaCon that despite “misconceptions” that millennials aren’t attending movies, the stats prove otherwise. He also noted that this month will be the first billion-dollar March in movie history. And, he said, with only four days remaining in the quarter, it is clear box office numbers will be up.
“We are up 2.3% from a year earlier, and films that grossed between $50M and $100M accounted for $250M more in 2016 than in the prior year,” he noted. So far, 2017 has gone against analyst predictions with such box office superstars this quarter as Universal’s Get Out ($148.5M domestically) and Split ($137.3M), Fox’s holdover Hidden Figures ($167M), Lionsgate’s holdover La La Land ($150.2M), Fox’s Logan ($201.6M), Warner Bros’ The Lego Batman Movie ($171M) and, of course, Beauty And The Beast ($326.15M).
He also noted that nine titles last year gross over $300M while there were only six in 2015.
The National Association of Theatre Owners chief also noted that global box office was up 1% to $39.6B from 2016. He said you also must take into account currency fluxuations to get a clearer picture of the state of the industry. For instance, he noted in China the box office was down $200M in U.S. dollars but up in RMB. “China is still growing but there are some complicated things going on in China,” he said to reporters afterwards. “The Chinese box office grew but not as much as in previous years. It’s still growing and are continuing to grow at a pace and there is only a question of when it catches up with the domestic market. We would like to get more foreign films into China.” He said it was up about 4%. “I local currency, only one — Germany — did not grow.”
“Despite all this excited talk about the Internet and streaming disrupting the movie business, domestic box office has been on a steady upward path for more than a decade,” Fithian said. Domestic ticket sales brought in $11.37B last year and that was up by 40.2%. And, he said the average ticket price of $8.65 is lower (when you consider inflation) than 1976. “Mind you, this performance was not only a rebuke to the idea of disruption, it was in teh face of two recessions, 10% unemployment and a U.S. median income that is only now returning to the levels last seen 17 years ago.”
“The industry has not held still,” he said, pointing out that they have invested billions of dollars to improve the moviegoing experience both in the technology and perks inside theaters.
“Another common misconception is that millennials aren’t going to the movies, but statistics show differently,” said Fithian. He showed a slide that 55% of frequent moviegoers — those going to at least four movies during the past two months — fall into the 18-34 age range which is up 40%. One of the reasons they found this age group goes to the theater more often because of reclining seats.
Hispanics, he said, constitute the most frequent moviegoers with 21% of the pie even though they only rep 18% of the population. Asian moviegoers and African American moviegoers over-index. Per capita, Asian American movie attendance grew from 3.5 to 4.2 times a year while African American attendance grew from 3.5 to 4.2 times a year in moviegoing.
Fithian also said, “NATO benefits from a global worldview … exhibition is becoming a global business.” He noted the amount of exhibition expansion with AMC in Europe (with the acquisitions of Odeon and Nordic) and Wanda continuing to acquire chains, like Hoyts in Australia.
“Exhibitors around the world, as we know, lose billions of dollars a year on movie theft and would lose even more if there wasn’t an effort against piracy,” he said, and was happy that everyone is contributing to stopping it. NATO currently has members in 91 countries. “This convention is very global now,” he told reporters. “Our members love that we focus on international on Monday (during CinemaCon).”
“Free trade is very good for our business and always has been. Immigration is good for our business,” said Fithian when asked about the current political environment. Asked specifically about the relationship between Mexico and the U.S., he said they want to work on “good bi-lateral agreements.”
In terms of 3-D, “it is still a value-add for our business but it is very movie specific. It started out small and then Jim Cameron did this movie called Avatar and (it shot up), I think we’re getting more sophisticated in the movies that use 3-D now.” About VR, “We looking at it because there are filmmakers that are interested in promoting their movies through it.”