If it ain't broke, why fix it?
2009 and 2010 were record years at the motion picture box office. Relationships between the exhibition and distribution communities had been nearly without incident since March 2011, other than the ongoing concern with piracy or theft of content. But suddenly, these harmonious times are evolving into open warfare between exhibition and distribution over the planned release of an upcoming film via Video on Demand to consumers’ homes only three weeks after its theatrical release, and one studio’s intention to refuse paying for 3D glasses.
The old adage, “If it’s not broken, why fix it?” certainly relates to Universal Pictures and Comcast’s short-lived plan to test the VOD release of the Eddie Murphy-Ben Stiller comedy Tower Heist in two markets three weeks after its theatrical release. One understands that Universal, like all the other film companies, needs to make up revenues after the downward spiral of DVD sales. But to do so at the expense of the exhibition industry, their bread and butter, does not really make any sense.
The audience for high-priced on-demand fare is probably small. Comcast was looking to charge $60. What is the value proposition in paying this ridiculous price to watch a feature at home when seeing it in a movie theatre almost always guarantees a great and better experience? Why do it? Was this just a test to determine the upper limit of what people will pay to watch a movie? Or was it the ultimate challenge to continue to erode the current windowing guidelines?
Although NATO did not officially speak out on the Tower Heist plan, one major theatre circuit did, vowing it would not play the film. Less than one week later, Universal announced it was cancelling the VOD test, but said it would continue to pursue premium video-on-demand. In a hopeful sign, the studio stated, "Universal continues to believe that the theatre experience and a PVOD window are business models that can coincide and thrive and we look forward to working with our partners in exhibition to find a way to experiment in this area in the future.”
Meanwhile, the wrangling over the cost of 3D glasses has been an issue ever since Chicken Little paved the way for the resurgence of 3D. However, with that film, there were fewer than 100 screens that played the movie and the number of 3D glasses used was insignificant compared to the much larger runs today. On a typical 3D movie today, one can expect a cost of between $5-10 million on glasses.
With the up-charge in admission price and the desire to establish 3D as a viable alternative to 2D presentations, the studios accepted this cost. Now, in the domestic market, the film companies are experiencing a drop in the percentage of revenues coming from 3D showings, and combined with the fact that nearly 30% of U.S. screens today have 3D capability, the studios are rethinking their position on paying for the glasses.
The best answer would be to push the cost to the patrons and have them buy a pair of reusable 3D glasses. It surely makes sense: People who play tennis or golf bring their own equipment; a baseball player has his own glove; college students buy their own books. The problem is that there are several formats of 3D and one pair of glasses will not work for all the systems in use. So until a universal pair is available, it is not anticipated that patrons will buy 3D glasses.
An arbitrary decision by the film companies that they will no longer front the funds for 3D glasses is definitely not the answer. Neither is the exhibition community’s refusal to play a film in 3D if the studios will not pay for them. There has to be a middle ground, and this is a matter that shall be explored by both sides with the goal of reaching an equitable solution—one that works for everyone. It appears to this editor that the partnership between exhibition and distribution has become more strained and the need for better communication and understanding is imperative. Hopefully, both sides will come to their senses and reach this same conclusion.
ShowEast Heads to Miami
Exhibitors are still celebrating a record summer after a dismal first quarter, but with the above conflicts between exhibition and distribution still looming, it’s anyone’s guess what will happen at the 27th edition of ShowEast.
Organizers of the event are still quite optimistic that the move from Orlando to the Miami/Hollywood area will result in a very successful show. We have been told that the trade show is completely full and the Westin Diplomat Resort is sold out—both good signs for this convention.
ShowEast is largely a convention about film, and the schedule is packed with both major company releases and strong independent titles. Major releases including The Muppets, The Adventures of Tintin, Joyful Noise and Arthur Christmas will be screened at the AMC Aventura 24 complex. Indie product rounds out the schedule with Man on a Ledge, Carnage, The Descendants and Act of Valor.
Digital projection and 3D have been the major technologies championed at the industry shows over the last decade, but the newest arrival is high frame rates. First demonstrated at the inaugural CinemaCon in Las Vegas by James Cameron, this is the hot topic now, as Peter Jackson will be looking to play his upcoming Hobbit at 48 frames per second and Cameron’s next Avatar will be shot in either 48 or 60 frames per second. Although there is not an official show demonstration, the topic will be discussed at a Monday morning session hosted by the International Cinema Technology Association and private demonstrations will be staged by Christie, Barco and Dolby at the trade show.
ShowEast continues to hold an Independent Day on Monday for exhibition from Latin America. This year, that portion of the show will feature marketing presentations from all six majors including Disney, Paramount, Universal, Warner Bros., Fox and Sony. Seminars also will touch upon concessions, the Americans with Disabilities Act and social networking to drive attendance at the nation’s theatres.
Coca-Cola is on hand for the 27th consecutive year to host the Final Night Banquet, where Jim Amos, Kurt Hall and John C. Hall will be honored.
Yes, there will be excitement generated by the movies, trade show, seminars and banquets. Hopefully, it will help dissipate any of the clouds that could dampen the networking and camaraderie that are the norm for this show.
The Legacy of Steve Jobs
Over the past several decades, these editorial pages have rarely eulogized individuals for their accomplishments or service to the motion picture industry. The broad outpouring that has followed the death of Steve Jobs has prompted us to say a few words about his incredible life. This man changed the way the world communicates, listens to music and sees movies. From the Mac Book Pro, to the iPhone, iPod and most recently the iPad, few inventors or entrepreneurs have ever been so instrumental in affecting the lives of so many.
Steve Jobs was one the most beloved billionaires ever, and a tribute by Richard Bronson captured the way people felt they could identify with his narrative: “So many people drew courage from Steve and related to his life story: adoptees, college dropouts, struggling entrepreneurs, ousted business leaders figuring how to make a difference in the world, and people fighting debilitating illnesses. We have all been there in some way and can see a bit of ourselves in his personal and professional successes and struggles.”
It will be a long time before another Steve Jobs comes along and has such an impact on business, Hollywood and the everyday citizen.