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‘A little bit of everything’ NATO’s John Fithian tackles a broad range of issues

March 21, 2014

-By Andreas Fuchs


filmjournal/photos/stylus/1396628-Fithian_Md.jpg
“Ahh…” John Fithian, the president and CEO of the National Association of Theatre Owners (NATO) begins our conversation with an audible and somewhat unexpected sigh when we catch up with him after his visit to several of his exhibitor members. “It was four different cities, so we were quite busy,” he explains. “It was also very productive, talking about the issues at hand and then getting our notes together for CinemaCon.”

Before discussing those very notes and topics, we wanted to know more about his road trip. “We have been doing this for 15 years or so, where we touch base with our members at their home offices occasionally, reaching out and learning more about their operations and about what is on everybody’s mind.” Fithian sees additional benefits in personal contact over just speaking on the phone or during otherwise busy NATO board meetings. “Our management team gets to meet more of the people who work at the corporate headquarters of a theatre company. On our executive board, there is only one representative from a given circuit, and even on the advisory board, committees and task forces, there are only a handful from each company. Getting to meet more folks in the field also means that we learn more about their operations, which in turn helps us represent them better. It’s a good way to educate bilaterally.”

The topics at hand “covered just about everything,” Fithian says of the recent conversations. “We talked a lot about technology issues and had discussions about movie supply, as well as the ratings system along with movie theft and enforcement of content protection in the field.” Nothing much new there, this author ventures. “We are also dealing with a lot of government regulations right now. Hot topics like minimum-wage proposals both in Congress and in the field, as well as how to implement the Affordable Care Act.” Fithian also mentions accessibility for disabled patrons and making headway on regulations for laser-illuminated projection.

On the latter, some progress has indeed been made, just recently. A peer-reviewed research study published by Health Physics noted in February that “laser-illuminated projector emissions hold no resemblance to the optical hazards of collimated laser beams used in light shows and, therefore, laser-illuminated projector standards and regulations should be similar to those for lamp-based projectors, rather than those applied to laser light shows.” The Laser Illuminated Projector Association further stated, “The study was done to ensure that state-of-the-art laser-illuminated projectors (LIPs) pose no danger to theatre operators and moviegoers as they replace lamp-based systems in theatres and venues worldwide.”

While this goal will surely be appreciated on the tradeshow floors, what else will exhibitors talk about while convening in the hallowed halls at Caesars? “I don’t think this is a year where we have one or two primary themes at CinemaCon,” Fithian foresees. “It’s a little-bit-of-everything year. Just yesterday, the NATO management team and I were discussing that very question. What are the primary themes of the convention? But our topics are really pretty much all over the map.”

One item will certainly remain on the agenda, but perhaps not for long. “Gosh, how many years have we talked about digital cinema?” Fithian notes. “This may actually be the last year that we have to talk about it, because the deployment is definitely coming to an end. Several of the studios have begun to release movies only in the digital format domestically, and not in film. That is a historic transition.”

With a conversion rate of about 93% in the United States, “digital cinema is a reality now,” he attests. “You would think you can take a breather now, with the completion of such a historic technological transition. But, no, you cannot. Looking at laser-illuminated projection and hearing all about immersive audio formats, along with high frame rates and high dynamic range, the technological innovations that are made possible from the conversion from film to digital seem to be limitless.”

Fithian adds, “Some of our technology community leaders in this industry and I are going out to all the studios [prior to CinemaCon] to talk about those technology issues. It’s a busy set of subject matters for us. And so this should be, because we want to continue to provide the best possible experience to our patrons. So that they can see a movie in a cinema that is unlike any other possible way to watch a movie.”

Continuing that thought, he feels that “offering the consumer experiences at many different price points is a good thing. For decades in this country, every type of cinema experience was very, very similar… Today, you’ve got 2D, 3D, big screen, immersive sound, moving seats…theatres that have full dining and alcohol service, others that are being designed in a luxury format. The offerings and choices are numerous,” Fithian observes. “And the competition among the members is robust in how they can continue to offer different and better experiences for their patrons. Operators experimenting with different seats and different types of service, and different technology—that’s when the patron really benefits the most.”

Ongoing consolidation in this industry, Fithian says, will also not be to the detriment of moviegoers. “In this marketplace, consolidation has been a good thing for competition. Currently we have a handful of really big companies with a national footprint who are doing a lot to be competitive with each other. And you also still have a very vibrant independent cinema community. Particularly in small towns, but not only, there are operators who know their market and their patron base very well. This type of bifurcated industry is robust in its competition. And I think the patrons are benefitting from this. Although there is consolidation on one hand,” he reasons, “there are still hundreds and hundreds of independent cinemas. On both ends, if you will, there are innovations happening for the consumer.”

At some theatres, innovation is not happening because they cannot convert to digital projection, let alone the laser-illuminated kind. How many cinemas have so far closed? “Not that many at all,” Fithian notes, “because we are first getting into the final phase of the end of film. For the remaining cinemas, it is kind of now-or-never on conversion,” he admits. “Some of them will be taken off line, frankly, even by the bigger companies because they are at the end of their leases or they represent properties that they do not want to continue to operate. And others will still convert. We do not yet know how many will close.” Fithian does assert, however, that “there are going to be a lot less than people feared at the beginning of this transition.”

In general outlook as well, “the members are optimistic,” Fithian assures. “2013 was a very good year, obviously, with record box-office numbers both domestically and internationally. CinemaCon is so early this year that NATO and MPAA will be releasing all the final numbers once again at the convention.” About the year so far, he feels, “there has been talk already whether it will be an up year or a down year. Despite some negative comments, we believe 2014 is going to be another fairly decent year. It’s off to a good start already and I, personally, do not think this summer will be as challenged as some people think it is. We are seeing some decent tracking on movies that people thought might not have been as successful. I am cautiously optimistic that 2014 will be a decent year. The theatre companies are all feeling that. The stocks of the publicly traded exhibitors are all trading at fairly decent levels and there is a definite confidence in the industry right now.”

As always, that confidence is carried in large part by the product onscreen. “We are very, very happy with family pictures like The Nut Job and The Lego Movie coming out now.” Fithian cannot help but point out the difference from a year ago, when there was nothing but action fare available. “We have been suggesting the use of a 12-month release calendar for movies that reach all demographics for a long time. I think our studio partners are really getting the gist of maximizing that calendar.” He gives particular credit to Warner Bros., not just for building up the success of The Lego Movie in February, but for releasing multiple Academy Award winner Gravity last October. “So we are seeing some very commercial movies that appeal to different demographics at different times of the year. And that’s a good sign.”

With that, Fithian “absolutely” agrees that—launched and owned by exhibitors themselves—Open Road Films has been leading the charge as well. “One of the reasons Regal and AMC opened Open Road together was to increase movie supply in the off months. And they have done so consistently, of course, and successfully.”

Consistent dialogue and many discussions have led to the publication of In-Theatre Marketing Guidelines. “We’re in the implementation phase now, and we will not have a big, continued debate about the guidelines at CinemaCon.” Fithian opines that “there will be nothing significant to talk about until we get fully implemented a few more months down the road.” Last time we spoke about the topic on the occasion of ShowEast, the guidelines were still pretty much in the works. So why is this not cause for further jubilation? “We will probably know more by this fall how the implementation went,” Fithian reasons. “This is something that is important to NATO’s members. They believe that we can advertise more effectively inside our cinema complexes. But there are certainly those who don’t agree with us taking this initiative. That’s why I really don’t want to get into a public discussion now, but want to work with our partners on how all of this gets carefully implemented. That’s the stage we’re in right now.”

Better marketing, bigger box office and a bunch of business innovations are not a bad place to be in at all.


‘A little bit of everything’ NATO’s John Fithian tackles a broad range of issues

March 21, 2014

-By Andreas Fuchs


filmjournal/photos/stylus/1396628-Fithian_Md.jpg

“Ahh…” John Fithian, the president and CEO of the National Association of Theatre Owners (NATO) begins our conversation with an audible and somewhat unexpected sigh when we catch up with him after his visit to several of his exhibitor members. “It was four different cities, so we were quite busy,” he explains. “It was also very productive, talking about the issues at hand and then getting our notes together for CinemaCon.”

Before discussing those very notes and topics, we wanted to know more about his road trip. “We have been doing this for 15 years or so, where we touch base with our members at their home offices occasionally, reaching out and learning more about their operations and about what is on everybody’s mind.” Fithian sees additional benefits in personal contact over just speaking on the phone or during otherwise busy NATO board meetings. “Our management team gets to meet more of the people who work at the corporate headquarters of a theatre company. On our executive board, there is only one representative from a given circuit, and even on the advisory board, committees and task forces, there are only a handful from each company. Getting to meet more folks in the field also means that we learn more about their operations, which in turn helps us represent them better. It’s a good way to educate bilaterally.”

The topics at hand “covered just about everything,” Fithian says of the recent conversations. “We talked a lot about technology issues and had discussions about movie supply, as well as the ratings system along with movie theft and enforcement of content protection in the field.” Nothing much new there, this author ventures. “We are also dealing with a lot of government regulations right now. Hot topics like minimum-wage proposals both in Congress and in the field, as well as how to implement the Affordable Care Act.” Fithian also mentions accessibility for disabled patrons and making headway on regulations for laser-illuminated projection.

On the latter, some progress has indeed been made, just recently. A peer-reviewed research study published by Health Physics noted in February that “laser-illuminated projector emissions hold no resemblance to the optical hazards of collimated laser beams used in light shows and, therefore, laser-illuminated projector standards and regulations should be similar to those for lamp-based projectors, rather than those applied to laser light shows.” The Laser Illuminated Projector Association further stated, “The study was done to ensure that state-of-the-art laser-illuminated projectors (LIPs) pose no danger to theatre operators and moviegoers as they replace lamp-based systems in theatres and venues worldwide.”

While this goal will surely be appreciated on the tradeshow floors, what else will exhibitors talk about while convening in the hallowed halls at Caesars? “I don’t think this is a year where we have one or two primary themes at CinemaCon,” Fithian foresees. “It’s a little-bit-of-everything year. Just yesterday, the NATO management team and I were discussing that very question. What are the primary themes of the convention? But our topics are really pretty much all over the map.”

One item will certainly remain on the agenda, but perhaps not for long. “Gosh, how many years have we talked about digital cinema?” Fithian notes. “This may actually be the last year that we have to talk about it, because the deployment is definitely coming to an end. Several of the studios have begun to release movies only in the digital format domestically, and not in film. That is a historic transition.”

With a conversion rate of about 93% in the United States, “digital cinema is a reality now,” he attests. “You would think you can take a breather now, with the completion of such a historic technological transition. But, no, you cannot. Looking at laser-illuminated projection and hearing all about immersive audio formats, along with high frame rates and high dynamic range, the technological innovations that are made possible from the conversion from film to digital seem to be limitless.”

Fithian adds, “Some of our technology community leaders in this industry and I are going out to all the studios [prior to CinemaCon] to talk about those technology issues. It’s a busy set of subject matters for us. And so this should be, because we want to continue to provide the best possible experience to our patrons. So that they can see a movie in a cinema that is unlike any other possible way to watch a movie.”

Continuing that thought, he feels that “offering the consumer experiences at many different price points is a good thing. For decades in this country, every type of cinema experience was very, very similar… Today, you’ve got 2D, 3D, big screen, immersive sound, moving seats…theatres that have full dining and alcohol service, others that are being designed in a luxury format. The offerings and choices are numerous,” Fithian observes. “And the competition among the members is robust in how they can continue to offer different and better experiences for their patrons. Operators experimenting with different seats and different types of service, and different technology—that’s when the patron really benefits the most.”

Ongoing consolidation in this industry, Fithian says, will also not be to the detriment of moviegoers. “In this marketplace, consolidation has been a good thing for competition. Currently we have a handful of really big companies with a national footprint who are doing a lot to be competitive with each other. And you also still have a very vibrant independent cinema community. Particularly in small towns, but not only, there are operators who know their market and their patron base very well. This type of bifurcated industry is robust in its competition. And I think the patrons are benefitting from this. Although there is consolidation on one hand,” he reasons, “there are still hundreds and hundreds of independent cinemas. On both ends, if you will, there are innovations happening for the consumer.”

At some theatres, innovation is not happening because they cannot convert to digital projection, let alone the laser-illuminated kind. How many cinemas have so far closed? “Not that many at all,” Fithian notes, “because we are first getting into the final phase of the end of film. For the remaining cinemas, it is kind of now-or-never on conversion,” he admits. “Some of them will be taken off line, frankly, even by the bigger companies because they are at the end of their leases or they represent properties that they do not want to continue to operate. And others will still convert. We do not yet know how many will close.” Fithian does assert, however, that “there are going to be a lot less than people feared at the beginning of this transition.”

In general outlook as well, “the members are optimistic,” Fithian assures. “2013 was a very good year, obviously, with record box-office numbers both domestically and internationally. CinemaCon is so early this year that NATO and MPAA will be releasing all the final numbers once again at the convention.” About the year so far, he feels, “there has been talk already whether it will be an up year or a down year. Despite some negative comments, we believe 2014 is going to be another fairly decent year. It’s off to a good start already and I, personally, do not think this summer will be as challenged as some people think it is. We are seeing some decent tracking on movies that people thought might not have been as successful. I am cautiously optimistic that 2014 will be a decent year. The theatre companies are all feeling that. The stocks of the publicly traded exhibitors are all trading at fairly decent levels and there is a definite confidence in the industry right now.”

As always, that confidence is carried in large part by the product onscreen. “We are very, very happy with family pictures like The Nut Job and The Lego Movie coming out now.” Fithian cannot help but point out the difference from a year ago, when there was nothing but action fare available. “We have been suggesting the use of a 12-month release calendar for movies that reach all demographics for a long time. I think our studio partners are really getting the gist of maximizing that calendar.” He gives particular credit to Warner Bros., not just for building up the success of The Lego Movie in February, but for releasing multiple Academy Award winner Gravity last October. “So we are seeing some very commercial movies that appeal to different demographics at different times of the year. And that’s a good sign.”

With that, Fithian “absolutely” agrees that—launched and owned by exhibitors themselves—Open Road Films has been leading the charge as well. “One of the reasons Regal and AMC opened Open Road together was to increase movie supply in the off months. And they have done so consistently, of course, and successfully.”

Consistent dialogue and many discussions have led to the publication of In-Theatre Marketing Guidelines. “We’re in the implementation phase now, and we will not have a big, continued debate about the guidelines at CinemaCon.” Fithian opines that “there will be nothing significant to talk about until we get fully implemented a few more months down the road.” Last time we spoke about the topic on the occasion of ShowEast, the guidelines were still pretty much in the works. So why is this not cause for further jubilation? “We will probably know more by this fall how the implementation went,” Fithian reasons. “This is something that is important to NATO’s members. They believe that we can advertise more effectively inside our cinema complexes. But there are certainly those who don’t agree with us taking this initiative. That’s why I really don’t want to get into a public discussion now, but want to work with our partners on how all of this gets carefully implemented. That’s the stage we’re in right now.”

Better marketing, bigger box office and a bunch of business innovations are not a bad place to be in at all.
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