#CinemaCon2015 showcases great slates and stunning technologies

During the annual conference organized by the National Association of Theater Owners (NATO) and held at Caesar’s Palace in Las Vegas, the major Studios have as usual showcased their upcoming slates.

Not so usual however is the caliber and market potential of the movies, from Paramount‘s Summer 2015 star driven releases Mission: Impossible – Rogue Nation and Terminator Genisys presented directly by Arnold and Tom, to Warner Bros‘s big event movies such as Mad Max: Fury Road, San Andreas, Black Mass, Point Break, Entourage, and of course Batman v Superman: Dawn of Justice.

cinemacon-tomcruise

Tom Cruise presents the new chapter of the Ethan Hunt’s saga.

From Disney‘s incredible 2015-2017 of epic hero driven slate including Avengers: Age of Ultron, Tomorrowland, Inside Out (screened in Dolby Vision), Ant-Man, Star Wars: Episode VII – The Force Awakens, Captain America: Civil War, Guardians of the Galaxy 2, and Doctor Strange, to Sony‘s filmmaker driven movies such as Xmas, Spectre, Pixels, Aloha, Money Monster, Hotel Transylvania 2.

cinemacon-insideout

Preview screening of Inside Out, the new Pixar’s animation film, in Dolby Vision.

From Universal‘s franchise driven slate of films such as Ted 2, Pitch Perfect 2, Jurassic World, Minions, Fast and Furious 8, even with authorial additions such as Everest, Crimson Peak, Straight Outta Compton, and the new Illumination’s animation feature The Secret Life of Pets, to Fox‘s author driven and internationally oriented films such as Ridley Scott’s The Martian, Alejandro Gonzalez Inarritu’s The Revenant starring Leonardo Di Caprio, David O. Russel’s Joy, the new animation film The Peanuts Movie, and then Hitman Agent 47, Maze Runner: The Scorch Trials, Josh Trank’s Fantastic Four, Paul Feig’s Spy (also featured during the following party), Paper Towns.

cinemacon-spy

Paul Feig entertains the attendees of the Spy Party.

But CinemaCon means also the trade fair where hundreds of vendors showcase their products to the theater owners and film industry professionals: besides concessions and seating solutions, marketing and analytics tools and apps among which startups such as Dealflicks, Intensnet, Showtime Analytics and Peach Digital, make their way among established companies such as online ticketing/marketing providers Fandango and MovieTickets, POS providers RTS, NCR, Vista, and technology providers such as Imax, Barco, Cinemeccanica, Christie, 4DX, and Dolby, official sponsor this year with its new Vision system, based on wider color gamut and high dynamic range (HDR).

Also emerging as main point from panels discussions, one consideration needs to be made at this point: on one side the vendors and the real estate investors seem to be pushing toward building more and bigger theaters and upgrading technology turning theaters into high-end all entertainment venues for tenth-pole big event movies and richer audiences, on the other marketeers, filmmakers and distributors, together with smaller theater owners are wondering how to get teenagers back to be frequent moviegoers leveraging timely releasing and smart pricing strategies, an analysis that needs to take into account what is happening in the digital space – i.e. the shrinking windows and the increasingly common day-and-date releases. A lot of work has to be done in this respect and the different parts of the industry are responsible to seek win-win solutions, with the primary objective of protecting the moviegoing experience and ultimately making consumers happy, the one and only way to drive revenue up. For the film industry to thrive, no one should be left behind: many theater owners (the majority of attendees of CinemaCon, the ones outside the big chains) cannot keep the pace with continuous investments in technology while facing diminishing margins and lower attendance. New technologies are desirable only if the demand justifies the need of new investments: mature markets such as North America and Europe are struggling in this respect, whereas biggest part of the growth is coming from Asia, China in particular (see https://flixbiz.com/2015/03/12/global-box-office-inflated-by-chinese-wind-us-suffering/).

clint-eastwood

The legendary Clint Eastwood interviewed by Stephen Galloway, THR.

CinemaCon was also the moment to honor the careers of great executives such as Fox’s Chief Jim Gianopoulos recipient of the Pioneer of the Year award, and Warner’s SVP Asia Distribution Erlina Surharjono recipient of the Passepartout Award, and to celebrate stars like Julianne Moore and legends like Clint Eastwood, recipient of the Fandango Fan Choice Award for Favorite Film of 2014 for the surprising results of American Sniper. In particular, the director told the audience about his working style and his incredible career, disclosing also some funny anecdotes – i.e. very few people know that Sergio Leone did not speak english and he did not speak Italian, but they could understand each other using the secret language of filmmaking.

cinemacon-show

The 2015 Big Screen Achievement Awards.

The Big Screen Achievement Awards ended the 4-day convention with the bubbly and at times hilarious appearances of Alan Arkin – Lifetime Achievement Award, Elizabeth Banks – Breakthrough Filmmaker of the Year, Francis Lawrence – Director of the Year, Amy Schumer – Breakthrough Performer of the Year, again Paul Feig – Comedy Filmmaker of the Year, again Julianne Moore – CinemaCon Vanguard Award, Kevin Hart – Comedy Star of the Year, Rose Byrne – Female Star of the Year, Paul Rudd – Male Star of the Year.

There was also a final party sponsored by Coca-Cola at the Caesar’s Palace pool but that must stay outside of the chronicles because what happens in Vegas stays in Vegas!

Global box office inflated by Chinese wind, US suffering

According to the annual Theatrical Market Statistics Report for 2014 by the Motion Picture Association of America, Inc. (MPAA) released yesterday, the global box office increased by 1% to a new record of $36.4 billion. Domestic (U.S./Canada) dropped by 5% at $10.4 billion. The Asia Pacific region was up by 12% overall, whereas China’s total of $4.8 billion (first international market to exceed $4 billion) was up a huge 34%, which alone improved the combined global total. Latin America box office increased 2% (but is up 46% from 2010) to $3 billion, Europe, Middle East & Africa (EMEA) decreased 3% ($10.9 to $10.6 billion) from 2013, due to decreases in larger European markets such as Germany (-7%) and the U.K. (-1%).

Growth-of-Global-Box-Office

As far as the infrastructure, total cinema screens increased 6% worldwide in 2014 to over 142,000, due in large part to continued double digit growth in the Asia Pacific region (+15%) now accounting for more than 47.3 thousand screens against 43.2 in US/Canada, 40.4 in EMEA, 11.2 in Latin America. 90% of the world’s cinema screens are now digital, up 7 percentage points from 2013 (83%), 51% (47% in 2013) of which are 3D. In particular, in the US, the majority of screens (84%) are located at venues with 8 or more screens. The number of screens at venues with seven or fewer screens continued to decline, despite an overall increase in the number of screens.

Looking at moviegoing in the domestic market, what is particularly worrying is the drop of admissions: tickets sold (1.27 billion), and average tickets sold per person (3.7) both declined by 6% in 2014 in US and Canada, which is the lowest level in many decades, while the average cinema ticket price increased by only 4 cents (less than 1%) in 2014, less than the rate of inflation in the economy.

Going more in depth, 229.7 million people (68% of of the U.S./Canada population aged 2+, 52% female and 48% male) went to a movie at the cinema at least once in 2014 (“moviegoer”):

  • the typical moviegoer bought 5.5 tickets over the course of the year (down from 5.9 tickets in 2013);
  • frequent moviegoers (once a month or more) are 11% of the population but accounts for 51% of all tickets sold, a 1.2 million and 3% increase from 2013;
  • the number of frequent moviegoers increased (40-49 and 60+) or remained flat (50-59) among 40+ age groups, but fell or remained constant for younger age groups, including the largest frequent-moviegoing age groups (18-24 year olds and 25-39 year olds are 1.7 and 2.7 million less respectively within the last two years);
  • per capita attendance declined for all age groups under the age of 40, increased for 40-49 year olds (3.6) and 50-59 year olds (3.1), which also had their share of tickets sold at all times high and remained flat for 60+ year olds compared to 2013, even though the 12-17 year old age group (6.4) had the highest per capita attendance, followed by 18-24 year olds (6.2);
  • despite a decline in 2014, Hispanics especially continuing to oversample in tickets sold versus their proportion of the population, while Caucasian and Asian/Other frequent moviegoers increased in 2014 compared to 2013;
  • over two-thirds of all frequent moviegoers (73%) own at least four different types of key technology products, compared to 55% of the total adult population;
  • California and Texas had more moviegoers and the largest number of frequent moviegoers (5.9 and 4.1 million, respectively).

china-theater-3d-crowd__140123143948

Other key trends to keep in mind:

  • 3D is less appealing than ever but highest grossing films are released also in 3D. The percentage of the population who were 3D moviegoers in 2014 fell for all age groups, with larger declines for age groups below 40 years old and the format comprising 14% of the overall box office, however 9 of the top 10 and 15 of the top 25 films were released in 3D.
  • More theatrical releases. Films released in theaters by MPAA member studios increased for the first time in five years, reaching 136 in 2014, a +19% compared to 2013. Total films released and films by non-MPAA member studios also increased from 2013 (up to 707 or 7% and to 571 or 5%, respectively),  higher than any other year in the last decade.
  • PG-13 films comprised 14 of the top 25 films in release during 2014.
  • Total film produced for theatrical release with a budget of $1 million or higher were 481 (+6%), of which 110 (+4% were MPAA member studio films.
  • Among the top five grossing films in 2014, Guardians Of The Galaxy, Captain America: The Winter Solider, The Lego Movie (which earned 64% of box office revenue from Caucasian audiences) and Transformers: Age Of Extinction (which drew the most ethnically diverse audience) all attracted majority male audiences. The Hunger Games: Mockingjay Part 1 showed the strongest female attendance of the top 5 films, with 57% of the film’s box office revenue coming from women.

Let’s try to sum everything up.

Compared to the previous year, in 2014 the Asian gross box office increase has offset the decline in US/Canada and Europe resulting in a slight global overall growth. Furthermore, there are now more screens, more concentrated in multiplexes and more digital, and more films were released theatrically, despite domestically considerably less tickets were sold on average, to an older audience and the frequent moviegoers (who are also tech-savvy) now totally sustain the market purchasing the majority of the tickets. The highest grossing films are rated PG-13, released also in 3D and attracted male audiences mainly, deviating slightly from the general moviegoers population. Hispanics are more likely than any other ethnic group to purchase movie tickets, while California, Texas and Florida are the most receptive states.

All in all, it looks like the movie theater is becoming, partially due to competition from other forms of entertainment primarily digital VOD, something appealing to a narrower (32% of the population did not go to the movies at all) and older target population of frequent moviegoers, with more films being released in theaters for less time, while China’s growing appetite for American movies comes at a welcome time for the industry.

There is certainly at this point a need for US distributors and exhibitors to analyze these data carefully and come up with new concepts, strategies and business models for keeping up with the demands of their actual and potential moviegoers. Starting from understanding how to adapt to the digital challenge.