2009! What a great year! And it wasn’t just assorted vintners and emerging China crowing about what has been for most an annus horribilis. In North America and even globally, the film industry also did mighty fine according to journalists, bloggers, analysts and studio execs, with record box office (over $10.5 billion!) and solid if not record attendance around 1.42 billion. And all this in a really lousy economy.

While the upbeat and ubiquitous dispatches hailing the 2009 numbers have been euphoric, not much has been heard from exhibitors and buyers—those guys (and the occasional gal) closest to the theatre action, those flies on the speaker-covered walls happy to buzz.

Yes, last year triggered age-old responses from exhibition that going out to movies is recession-proof, filmgoers love the communal experience and perceive big-screen movies as a bargain (especially in difficult times), and all continues well as long as theatres are clean, film product is strong, and rising ticket prices don’t scare customers. And a rousing Halleluiah-like chorus sings the praises of Avatar, 3D and IMAX presentations, for which audiences don’t seem to mind the premium prices.

Not surprisingly, those in the specialized/art-house sector faced some challenges, no thanks to the considerable downsizing or outright elimination of studio specialized divisions that lead to less product.

Yet Landmark Theatres had its best year ever in 2009, even in terms of tickets sold, reports CEO Ted Mundorff. He adds that it helped that art hits were spread over the 12 months, beginning with the strong 2008 spillover into 2009 and on to current films like Precious or Up in the Air.

No wonder Mundorff questions the pervasive downbeat perception. “One ponders why there are so many negative conversations about the decline of independent business when we have just come off two record-breaking years,” he offers.

But commercial theatres have another view. While Regal thrived in 2009, its more than 100 specialty screens “underperformed to a certain extent,” says Knoxville, Kentucky-based Regal Entertainment Group chairman and CEO Mike Campbell. “The supply was down and there were fewer indies that broke through to the mainstream.” But Campbell views the situation as cyclical and “it’s only a matter of time before someone fills that void and a specialty film will knock ’em out.”

Regal and other commercial theatres were surprised by how well releases spread out beyond the peak summer and holiday seasons worked. Even so, many smaller films beyond the tentpole or event fare did well, especially if the same genres weren’t simultaneously released. For Andy DiOrio, manager of corporate communications for AMC Theatres, and others, the “many surprises” included Paul Blart: Mall Cop, Coraline, Precious and The Hangover, especially with the former doing so well early in the year.

Observes Cineplex Entertainment president and CEO Ellis Jacob, “By spreading out their releases over the 12 months, the studios could deliver films like Paul Blart and The Hangover that come out of nowhere and perform so well.”

There is also the perception that different product (such as late December releases Avatar, Sherlock Holmes and Alvin and the Chipmunks: The Squeakquel) was able to deliver to different audiences simultaneously, playing solidly across demographics.

About such diversity and its appeal, DiOrio notes, “What we’re now seeing is that a lot of films that aren’t tentpoles have surpassed expectations and raised the total bar.”

In certain cases, successful films brought new audiences to theatres. Carmike marketing director Dale Hurst feels an R-rated movie like The Hangover showed strength at a time of year when family-friendly films usually cover screens.

Cinemark CEO Alan Stock also hails the diversity of product from distributors, noting that although there were fewer releases in 2009, it didn’t hurt business. “There was more escapism comedy, but all kinds of films could do well.”

Exhibitors point to just a few metaphorical small rips on the commercial theatres’ big screens last year. They cite pre-shows that may be too long and, surprisingly, some customer resistance to trailers. Says Hurst, “Our biggest grumble from customers is the cell-phone use. So we interfere and work hard to promote etiquette.”

Getting on the big and better screen bandwagon was one of last year’s biggest trends. Cinemark’s Stock goes so far as to say that customers perceive digital 3D as so different, they actually prefer it to 2D. The chain is leveraging this insight by rolling out what it calls its XD screens (extreme digital), begun last March. Stock details, “We go into theatres and put up floor-to-ceiling screens and upgrade to great chairs. We brand it Cinemark XD and now have about 15 XD screens out of our 3,800.”

For Fort Lauderdale, FL-based Muvico Theaters, its success with 4K projectors last year was also big news. Says president and CEO Hal Cleveland, “Five of our nine theatres all have 4K projectors, meaning a total of about 90 of our screens. They deliver better pictures and this is really paying off for us as attendance levels are way up in these venues.”

And then there are the new concession choices, even dining and drinking in theatres that proved profitable. Regal’s Campbell reports, “We’re rolling out our Cinebarre concept, which combines high-quality food and alcohol in auditoria with good service and food. We’re going across the country with this, but only in our smaller theatres for now. And we’re not charging extra. And this works.”

Indeed, bargains in 2009 again proved a draw. Carmike introduced what it calls “Stimulus Tuesdays,” when, says Hurst, “customers at every theatre get a fountain drink and popcorn for just a dollar each. We fill seats.”



But 2009 also proved that VIP amenities fill seats, usually of the plush leather kind. Cineplex’s Jacob says his chain recently opened a few VIP locations, for people over 19, where food and alcohol are delivered to seats. “These work extremely well and even sell out before our regular theatres.” And Muvico, a pioneer in VIP amenities, is “constantly looking at ways to improve the VIP experience,” Cleveland declares.

In fact, 2009 has energized exhibitors large and small to do testing and experimenting to fulfill that unending goal of delivering a better experience to customers.
Last year also drove home (and to the theatres) that marketing is all-important and partnering is a good way to go. Muvico, for instance, has teamed with Pepsi in this effort and Cineplex has devised new and better ways to know its customers. Theatres are also now experimenting with new methods that will allow filmgoers to print tickets online and merely scan quickly for theatre entry. Even mobile ticketing is in the works.

Creating social opportunities online is especially important as electronic communication grows and print advertising diminishes. AMC, for instance, just hired its first chief marketing officer, not just to advance its brand, but to oversee the evolution of its new Facebook page and revamp its website where filmgoers can now create their own communities.

And 2009 may even have suggested a shift in audience tastes. Observes Landmark’s Mundorff, “We did see films put out by the Hollywood mainstream become very successful with the indie audience. Star Trek and Up were big hits among the indie audiences.”

As for art-house venues, strong docs and especially move-overs like The Hurt Locker and An Education are grabbing more screens once filled by the recently defunct or radically downsized specialized distributors.

For instance, Ed Arentz, film buyer for downtown New York’s Cinema Village and managing director for Music Box Films, recently played the commercial Where The Wild Things Are and the ultra-arty move-over Sweetgrass. And Elliott Kanbar at his nearby Quad Cinemas is doing more and more move-overs. Says Kanbar, “I wish I had more of the small films, but the move-overs work so well. What I learned in 2009 is that you’ve really got to build up those relationships [with distributors] and make sure the theatres are up to snuff so they’ll be motivated to give us their films.”

While Arentz observes that video-on-demand indie offerings aren’t yet hurting the business, Jeffrey Jacobs, who heads Jacobs Entertainment, Inc. as film buyer for approximately 47 mostly art-house screens, has heard otherwise. “Many of my clients wish to demur,” he says of the VOD windows opened by companies like Magnolia and IFC.

AMC, which dedicates a number of screens to art-house fare, has also experienced change. DiOrio observes, “The [smaller] films can perform, but it depends on the number of prints that are working.”

Still, 2009 for exhibitors had much of the same old, same old, which is good news for the sector. Moviegoers tolerated ticket hikes, even as Avatar 3D prices went to the (I)max. Cinemark’s Stock declares, “What we learned is that people will pay the premium, even when we can offer 3D XD screens and have premium pricing for both [amenities].”

2009 offered further proof that alternative entertainment can work. “It’s definitely growing,” says AMC’s DiOrio. Exhibitors cite a variety of successes, many of which sell out, including the Metropolitan Opera live presentations, 2D and especially 3D sporting events, and special screenings like that of The Wizard of Oz remastered, which played AMC and other venues. These offerings, exhibitors agree, are also valuable because they attract new audiences to theatres.

But questions about alternative entertainment linger, including how to settle rights issues tied to sporting events and how to increase profitability. Cinemark’s Stock observes, “2009 gave us the impetus to experiment more [with alternative entertainment] and deliver to all audience demographics. Even the studios are thinking about what they can deliver to us, although I’m not sure what they’ll come up with.”

And The Wizard of Oz wasn’t the only oldie that worked. The classic 1948 The Red Shoes, which New York’s Film Forum played in late 2009, is again on the theatre’s calendar for Feb. 19.

Technology lessons weren’t just learned from the high end. Arentz reports that Cinema Village began in 2009 to project films from popular Quicktime files. “It’s a lot cheaper and the picture compares vary favorably with the much more expensive HDCAM delivery. We project directly from a $3,500 laptop, sourcing from the hard drive. I would encourage indie theatres to do more of this.”

2009 revealed that stateside theatres also doing business outside the U.S. are blessed with certain territories that are less “mature” but more profitable. Cinemark’s Stock observes that the chain enjoyed a slight increase in its international business over domestic.

For exhibitors, the success of 2009 portends a good 2010, but there remain those worries about windows, even for the bigger chains. Says Cineplex’s Jacob: “I am concerned about the windows between theatrical and other formats. If these releases are squeezed, it could hurt the overall business.”

And while new developments in home-entertainment technology keep few up at night, there are some innovations on the home front that are worth considering. As revealed at the recent Consumer Electronics Show, TV manufacturers saw record sales in 2009 and the number of homes with multiple hi-def sets is growing robustly.

Adding to the specter of increased home viewing are the 3D TVs many of these manufacturers are promising, the growth of Internet-enabled TVs (iNetTV, iTV and Roku box) that will free viewers from those rigid channel line-ups, movie streaming and downloading, VOD options by the thousands, and Skype-enabled TVs so that phone users can watch one another on the big screen as they talk.

The probability that Internet-enabled TV may finally bring a la carte viewing and other conveniences is very appealing to consumers, if not yet unsettling to cinema owners. Nor should exhibitors’ nerves become rattled. Granny may someday speak with the grandkids on a 152-inch screen (Panasonic reportedly unveiled such a monster at CES), but that experience will never compare to Avatar’s Jake Sully soaring on an eight-story-high IMAX screen.