Why wait for summer?

Columns

A plethora of films has made Hollywood rethink their release strategies and move some potential blockbusters to March, and to this point the strategy has definitely paid off. Universal’s Dr. Seuss’ The Lorax posted the biggest opening of the year and after the second weekend had scored with $120 million at the box office.

The real significance of this is that Hollywood seems to be accommodating a 52–week release schedule, and that is real good news for movie theatres and the industry. Moviegoers are proving that if there is a film they are interested in, they will show up regardless of the time of the year.

Everyone knows that the summer season becomes too crowded. When a movie sets its sights on the other weeks of the year, it gets more playing time and room to breathe. At the time of this writing, box office was up ten weeks in a row, compare to the same frames last year. Movie grosses are outpacing 2011 by almost 19 percent, with admissions up even a bit higher. After last year’s downturn, it’s a great feeling to be rebounding in this fashion.

What’s driving this rebound? Industry executives point to a slate of films that appeal to all age groups, including young adults and teens, two groups that were largely AWOL in 2011. Signs of an economic recovery and an unusually mild winter also are contributing to the uptick. We believe there is a lot more good news on the way and the industry gathering in Las Vegas shortly will certainly be upbeat and enthusiastic.

A Breakthrough in China

The overseas film market is responsible for more than two-thirds of the box-office revenue of feature films released globally. This fact is astounding when you consider the numbers only ten years ago. This is why all facets of the motion picture industry are focused on Europe, Asia and Latin America. In addition to box office, equipment sales are greater now in these same territories.

Although countries like Russia and Japan might still generate higher grosses, China is the place you want to be. The country boasts a population of nearly 1.4 billion people and only about 9,000 modern movie screens. That equates to about one screen for every 155,000 people, whereas in the U.S. the equation is one screen for every 7,200 people. The Chinese movie market did about $2.1 billion in ticket sales last year. With a building spree that should result in almost 16,000 screens by 2015, one can anticipate about $5 billion in revenues.

What’s really holding back even more fantastic growth is that the Chinese government only allows into the country 20 films from foreign territories on a revenue-sharing basis. This 20-film quota has been in existence too long and the MPAA has been lobbying the government to increase that number for quite some time. Well, there has finally been some movement and a new agreement is in place that provides that special-category films that are available in premium 3D or giant-screen formats will be allowed into the country.

Although the quota system needs to be adjusted, this move by the Chinese government is in keeping with the tremendous expansion in the number of screens being built as well as the major increase in both 3D and IMAX theatres. The agreement brokered by Vice President Joseph Biden and Chinese VP Xi Jinping also raised a foreign studio’s allowed share of box-office receipts from a film released in China to 25 percent from 13 percent. The deal augurs a dramatic increase in revenue from a growing Chinese movie market.

No doubt, China is the place to be doing business.

A Foolish Lawsuit

We live in a free society, where you can choose what to do and when to do it. If you want to go to the movies, you have different theatres to select from as well as different content. No one twists your arm to attend a movie theatre and no one twists your arm to buy concessions when you are in that theatre. So why is a filmgoer from Livonia, Michigan, filing a class-action lawsuit against his local AMC Theatre for charging excessive prices at the concession stand?

What’s next, a spectator at a Major League stadium suing the New York Yankees for the high cost of a beer and hot dog? This is ridiculous. Sure, concession items in theatres are pricey, but you are not being forced to buy them.

Movie theatres across the nation are at the beck and call of the content providers. If product is good and plentiful, they can earn some good money, but if it is not so good and attendance is down like it was in 2011, than they see red at the bottom line. Most people do not realize that theatres do not own the movies but in fact lease them from the film studios and pay excessive film rentals that equate to nearly 50 percent of the box-office take. Without their concession stands, most theatres would not make it. So what if you pay more for a soda and popcorn. Just remember that you are getting to see a movie that costs $100 million to make for just $8, depending on where you go to the movies. Now that’s a great value when weighed against other entertainment events such as sports, theatre and racing.

Brick and mortar are very expensive to build and maintain. Cinemas cost more to build today because of stadium seating. Theatres are going through technological changes that are costing a small fortune—from digital to 3D. And high real-estate taxes, admission taxes, film-rental taxes, licensing fees of all types, paid sick leave, living-wage demands and mandated reporting of calories in certain territories all lead to huge expenses facing theatres.

So let’s give these guys a break. They keep on building beautiful places to visit and experience the greatest entertainment pastime there is. Don’t go if you don’t want to, but don’t make it more difficult for those who want to enjoy their soda and popcorn.