Reaching Out and Looking In: NATO chairman John Loeks welcomes diverse membership

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“CinemaCon serves the motion picture industry by bringing everyone together around topics of mutual interest.”

As John D. Loeks, chief executive officer of Grand Rapids, Michigan-based Celebration! Cinema, serves his second year as chairman of the National Association of Theatre Owners, he is looking forward to another important and impactful get-together in Las Vegas. “Exhibitors attend CinemaCon basically to learn about technology and other ways in which the industry—and our business models—may be changing.” Loeks goes on to mention one such change occurring at Celebration! Cinema that is indicative of what many exhibitors are doing. “Our company is obtaining liquor licenses for all of our megaplex movie theatres. We are installing more restaurant, food and bar services in our theatres… We are all watching each other and talking to each other about what’s effective and what is not effective, what’s efficient, what is not.”

We connected with Loeks right after the Oscars, and he was not necessarily toasting the history-making event. Prior to the 89th annual Academy Awards, he had observed how “so many of the nominees were actually coming from more independent sources. It is an interesting phenomenon that the films the Academy wants to nominate are not the blockbuster pictures that are the bread and butter of our industry.” He adds that he personally enjoyed the types of movies that got nominated, but he wonders if very many movie patrons liked some of them as well. “More often, they are coming to see films that have franchise potential with blockbuster appeal.”

“We have just come off a great 2016,” he continues on the subject of what constitutes success. “Many of the circuits are reporting some record bottom-line profits… Also at Celebration! Cinema, we had a very good year. After two months into 2017, the business has softened a bit compared to a year ago. Nonetheless, our overall view is optimistic that, as the year moves on, it will be a very good business in 2017.”

While he believes that his business colleagues in exhibition share this positive outlook, Loeks pitches CinemaCon 2017 as a good way to find out. Not only because of the product that our partners in distribution are set to showcase, but also by attendees conducting “more one-on-one conversations and attending some good meetings” during the convention.

Last year, he was pleased to be opening “The Big Tent” in Las Vegas (see our May 2016 edition) and this time around he is inviting one and all to come inside. In his role as NATO chairman, Loeks has focused leadership on two major initiatives. “One is what I would call reaching out and the other is looking in.”

Beginning with the former, “we have initiated a series of discussions with exhibitors from around the world on how we can better understand our industry together,” he says. “We had numerous conversations with exhibitors in Europe, South America, in Mexico, China, Southeast Asia and Australia…to move towards what I would deem a more federated structure.” Nothing has been finalized to the point of being announcement-ready, “but there will be very important meetings at CinemaCon,” he assures. The overall goal is to have “everyone gather around one big table and find out how we can coordinate better on issues that are important to all of us.” For example, Loeks mentions technology, legislation, windows and many more such issues “that our association views as essential to the success of our industry.”

Reaching out across the world is well underway. “We have used the term globalization,” he explains, although “there is some discussion about whether that’s the right term or how that umbrella would be… I really do not have much more to say about this until CinemaCon. But it is a major initiative for us.”

Moving to the second initiative, Loeks reassures that the North American domestic market has remained a priority as well. New challenges are continually being identified and reviewed, he notes. “With all our constituent associations across the country, the basic question before NATO is: How do we better coordinate our gathering of information and lobbying efforts in state legislatures?” Loeks mentions soda taxes, minimum-wage regulations and ADA-related issues. NATO has observed that these items are migrating from Washington, DC toward the state level. “For the National Association of Theatre Owners it has become necessary to be looking more carefully at how we can respond to legislation that may not be favorable to our industry.” Better coordination of regional activities and, possibly, some consolidation as well are items of discussion in preparation for and during CinemaCon.

Consolidation is happening on the theatre side as well, Loeks agrees. NATO membership is changing, not only on the international front, but also across North America with chains getting bigger and bigger. How does Loeks, as NATO chairman, go about balancing all the different types of members? This industry includes everybody from a single-screen operator on Main Street to Celebration!, a mid-sized, regional circuit, to the combined powers of AMC Entertainment and Wanda Group. “Consolidation is driven by perceived efficiencies,” he asserts, believed to be found in one big corporation—and in some cases on a global scale. Before addressing NATO, Loeks shares a personal observation first. Looking at efficiency alone could result in losing the role of “what a movie theatre can be in terms of a community center,” he contends. “I mean, how community-focused can an international corporation be?”

As a trade organization, NATO is well suited to maintain a diverse membership, Loeks notes, lauding its governing structure. “It is important that NATO keeps everybody at the board table.” By assigning roughly half the seats on the board to large circuits and splitting the remaining positions between mid-sized circuits and “small companies with even just one single screen or a few theaters,” Loeks believes that balance is maintained. “I think it has been a very healthy structure that allows all points of view to be expressed around the NATO board table.”

While there is a lively and diversified exhibition industry beyond the large circuits, Loeks concurs that these companies may more likely be called upon to negotiate issues such as release windows. He has, of course, read the same trade reports that we all have about constructive conversations going on between studios and exhibition companies. “In some ways,” he feels, as an industry “we have not really changed much since a year ago,” in terms of finding a better model for earlier availability that remains mutually beneficial for all stakeholders involved. “I think, however, that the notion of a reasonable window is really essential to the health of the exhibition industry. For the most part, Hollywood distributors know that and understand that, and have counted on the health of the exhibition sector as a cornerstone to their success.” With that in mind, Loeks hopes “they will not move rapidly to change the model that we have all been working with, unless there is absolute proof that tweaks can be had, or small changes,” without cannibalizing revenues. But, he admits, “I do not know exactly what the changes will be, frankly.”

The only thing that is certain is change. And Celebration! Cinema remains at the forefront of them all. “We love this business,” John D. Loeks says, sharing his personal thoughts in closing. “We have been in it for over three generations now, and it is one that we have embraced. At Celebration! Cinema, we have always identified changes and tried to be an early adopter of improvements, as we were with stadium-tiered seating, with digital projection, and as we are now in terms of food and beverage. These are challenges that are not without risks and some represent very big risks. However, we feel positive and are willing to move forward.”