Seeing Positive Signs for 2015
Following a soft year at the box office in 2014, especially during the summer months, the industry ended strong and now has a lot to look forward to in 2015 despite piracy and competition from Netflix, Amazon and Video on Demand. Analysts are projecting that box office this year in North America will soar past $11.5 billion, outpacing the record $10.9 billion in 2013. And in a very pleasant surprise, theatres for the first two months in 2015 are performing more than 10 percent better than they were at this time last year, thanks to films like American Sniper, Fifty Shades of Grey and The SpongeBob Movie.
This has been very meaningful for Hollywood, as the first months of the year have traditionally been seen as low-grossing periods. But studios see the potential for gaining audiences year-round. It’s taken quite a while, but they are realizing that this is a 52-week-a-year business.
Investors have been putting their money into some of the country’s biggest theatre chains, with stock prices rising at AMC Entertainment, Carmike, Cinemark and Regal Entertainment in anticipation of a robust 2015. Huge blockbusters are expected with Avengers: Age of Ultron, Jurassic World, Furious 7, the Star Wars reboot, the final Hunger Games and the latest James Bond thriller.
Fifty Shades of Grey and American Sniper set records in January and February. Social media played a major role in spreading the word on these two films. The revenue increase has been helped by average ticket prices climbing to over $8.13 in 2013.
If projections for 2015 prove true, the record year could be a very strong argument to keep releasing tentpole films first in theatres, as opposed to streaming them or enabling downloads at home. Despite this, Amazon.com plans this year to start making movies and Netflix has already announced plans to produce a sequel to Crouching Tiger, Hidden Dragon which will be streamed and appear on IMAX screens. Netflix also has a deal in place with Adam Sandler to make four movies, and most recently announced a deal for global rights to Beasts of No Nation, from “True Detective” director Cary Fukunaga. Netflix doesn’t seem to mind that most theatre operators refuse to play a film at the same time it’s available online.
Exhibition is changing with the times also. Theatres are finding new ways to capitalize on the moviegoing business. Thirty-five states now allow alcohol to be served in cinemas. In-theatre restaurants offer more high-quality food and alternative content and luxury seating are gaining traction. As ticket sales fell in 2014, some circuits actually saw food and drink sales and concession spending per theatregoer climb.
Another phenomenon that we have witnessed is that films like Fifty Shades have successfully appealed to a very different demographic—namely, women over 25. There has been an overall dearth of female major characters and that creates a hunger to see women in major roles. Hopefully, because of the success of Fifty Shades, Hollywood will develop a newfound respect for the genre and increase production of similar type movies.
A Landmark Deal for Event Cinema
It’s quite evident that alternative content or event cinema continues to be another vehicle for movie theatres to pull in revenue during downtimes. Although the dollars are not substantial yet, they continue to grow. It’s similar to the way cinema advertising, once just a blip on the screen, has become a very real revenue provider. We believe event cinema will grow at a rapid pace in the near future, provided the content is good.
A new three-way partnership between Vue Entertainment, National Theatre Live and Sony Digital Cinema is a significant event for event cinema, the first of its kind between a leading cultural institution, a cinema chain and an electronics manufacturer. With this initiative, audiences across the U.K. will be able to enjoy theatrical productions captured in 4K resolution using Sony’s F55 cameras.
The 12-month arrangement will see various productions from London’s prestigious National Theatre distributed exclusively in Vue’s 83 sites across the country. The first event of the new partnership is the National Theatre’s acclaimed staging of David Hare’s Behind the Beautiful Forevers, based on the book by Katherine Boo, directed by Rufus Norris and starring Meera Syal. The recorded performance will be distributed to Vue cinemas as a 4K DCP (Digital Cinema Package), stored on a hard drive or transmitted secure by satellite.
In February 2014, National Theatre Live broadcast the Tony and Olivier Award-winning production of War Horse live from the New London Theatre to cinemas around the world, including 36 Vue cinemas. The performance was captured with Sony F55 cameras and projected using Sony 4K projectors.
National Theatre Live, Sony and Vue Entertainment expect to collaborate even further with other technical innovations during the course of the agreement, including live 4K capture and transmission of future productions.
David McIntosh, VP of Sony Digital Cinema 4K Solutions for Europe and the Americas, stated: “If there’s a medium that’s naturally suited to the immersive detail and realism of 4K, it’s got be live theatre.”
Filling seats with innovative programming is not new to the cinema industry, but with quality alternative content a new business has been created, one that should flourish in the years ahead.