NATO Chief Avers “End Of Tunnel, Beginning Of Light” For Theaters; John Fithian, Charlie Rivkin Talk Biz Rebound, Piracy, Streaming On CinemaCon Eve

Breaking News, Film News

CinemaCon launches Monday at Caesars Palace in Las Vegas, the second in-person gathering of theater owners and Hollywood studios since August, and Covid. That edition was shadowed by the Delta Variant, ongoing theater closures and shifting release dates. Now the picture is significantly brighter. Domestic attendance at the confab, including a full complement of studio heads, is at a pre-pandemic level (international still a bit softer given challenges in some markets). Moviegoing is on the rise and the release sked looks full and fixed. NATO President & CEO John Fithian and MPA Chairman-CEO Charles Rivkin fielded questions from Deadline on the evolving post-Covid landscape and relationship between the two camps. (Some responses are condensed and edited for clarity.)

DEADLINE: Compare last CinemaCon to what you anticipate this coming week. What’s changed in the studio/exhibition ecosystem?

FITHIAN: This show comes at a really important and historic time in our business. We’ve been on-again-off-again with movies, theaters closed on-and-off, and just now, just starting a few weeks ago, is when the full slate of movies were back for the rest of the year. CinemaCon will show content from upcoming movies, we’ll see directors and studios and talent talking about it, showing by their very presence that they’re fired up. There’s a lot of movie content coming from now until the end of the year. Young people came back, families showed up with Sonic The Hedgehog 2 [this weekend, Bad Guys]. This is the end of the tunnel and beginning of the light. It’s a takeoff point for the resurgence of the industry.

RIVKIN: I think CinemaCon 2022 will reconfirm something we already know – that the motion picture production and the movie theater industry are now rebounding from one of the biggest challenges we’ve faced in a century. On the studio side, we’re seeing a strong recovery for production. Last year, nearly 950 films entered production, which breaks even pre-pandemic records. We’ve seen a 16% increase over 2019 and a 40% jump over 2017. Much of that recovery grew out of the strong and effective health and safety protocols that our collective industry implemented in the early months of the pandemic, to keep our workers as safe as possible and productions up and running.

DEADLINE: What gives you both confidence looking ahead?

FITHIAN: The slate is pretty stable. We don’t see any more changes in the release schedule because of the pandemic. The effects of Covid were two: one was on customer willingness, the other one, the product — so even after consumers were willing to come back with Spider-Man: No Way Home, we missed movies in January and February because of delayed production schedules. Now consumers are ready to come back, and the movies are done, in the can, and ready to show. We have struggled to get product and to open safely. We are not like a restaurant, a local business that than can serve food as soon as it opens. We need to have everything open everywhere. We serve a global product that is all back now.

RIVKEN: The theatrical market is rebounding globally. Last year, the global box office was $21.3 billion, up 81% over 2020, and the U.S. and Canada box office more than doubled in that time frame, reaching $4.5 billion. While those numbers are still down from pre-pandemic levels, they suggest there’s still substantial room for growth. I think all studios and exhibitors should be optimistic about the future. Spider-Man: No Way Home was the third highest U.S. grossing box office film of all time. That trend continued in 2022 with The Batman securing the second highest U.S. box office since the start of the pandemic. Globally, films like Battle of Lake Changjin, Hi Mom, F9, and No Time to Die brought audiences to theaters in droves.

DEADLINE: Piracy. I know you’ll be speaking on that, could we have a preview?

RIVKIN: Piracy remains an existential threat to the creative community – full stop. It affects all of us – studios, exhibitors and consumers. But as I’ll say during my state of the industry address on Tuesday, the Motion Picture Association and our global anti-piracy coalition, the Alliance for Creativity and Entertainment (ACE) – has made great progress in combating the large-scale piracy operations that pose that threat. ACE is now a 24/7 service with a formidable global reach, capable of deploying response teams anywhere. We have taken down sites all over the world that offer thousands of films and TV offerings and receive millions of visits per month.

And we’re making progress – in North America, for example, from a high of 1,400 illegal websites and streaming subscription services in 2019, our antipiracy campaign has reduced that number to slightly more than 200. That number is still too high, but we are headed in the right direction. We are proud that Amazon and Apple are both members of ACE’s governing board, ensuring that they’re both integral partners in our fight against piracy.

FITHIAN: Piracy is a very big thing to talk about, because what data came out of the pandemic showed that simultaneous release of movies in theaters and at home is the worst-case scenario. It is one thing to have a pirate camcord a movie and try to release it. It’s another thing when a clean digital version becomes available. When pirates get hands on a digital copy, that’s when piracy goes crazy. Both sides lose money. If you look at movies with windows and simultaneous release, the staying power of the former in the second, third and fourth week are dramatically better.

DEADLINE: What about specialty film? There’s this drumbeat that, yes, theaters will continue to matter, but mostly for big franchises.

FITHIAN: I think the growth is going to come as much for smaller budget films as from blockbusters. The blockbusters, when we got them during the pandemic, kind of worked. Spider-Man, Bond. The specialty, mid-budget films that appeal to older audiences or families or niche audiences were harder to get to work. But then Sonic got families, Dog and Uncharted, which are not giant blockbuster films, did business. I’m very excited about mid-budget and specialty from Damien Chazelle’s Babylon to Steven Spielberg’s The Fabelmans to A Man Called Otto with Tom Hanks and Olivia Wilde’ Don’t Worry Darling — four examples of movies in the pipeline with directors very excited to bring them to theaters with a big window. Older audiences and those with young children were the most challenged but are the most excited about coming back out now. They wanted to be protected and were right to stay home, but it’s not that they preferred it. Now their confidence is coming back. With The Duke and Downton Abbey: A New Era, we are targeting movies to every demo.

Also, moviegoing begets moviegoing. When people come for the first time, they see a whole bunch of trailers and talk about what’s coming. Advertising inside the cinema is incredibly important in getting people back. We haven’t had that opportunity because of stops and starts and fallow periods and no consistent supply of product. We are not all about the blockbuster. (Even though this is a gigantic year for those, Doctor Strange, Top Gun: Maverick, Jurassic Word Dominion, Thor: Love and Thunder, Black Panther: Wakanda Forever, Avatar 2)

RIVKIN: Audiences crave and appreciate great storytelling, and there is room for everyone in this industry. This isn’t an either-or approach, but rather, great stories lift all boats. All parts of our collective industry are important – whether you’re going to see a franchise film on the big screen or an independent film at an arthouse, or watching a movie at home. All parts of our ecosystem thrive as a result of great stories told on screen.

DEADLINE: Can you comment on streaming, and the state of relations between MPA and NATO?

RIVKIN: The MPA’s relationship with NATO has never been stronger. During the pandemic, our extended family – including the MPA, NATO, the studios, the unions and guilds, independent filmmakers – worked closely together to get us through the worst of it. And we continue to work closely together on a range of issues that require our collective input and focus – be it economic incentives, pandemic response or initiatives to take down the global piracy operations that threaten our industry.

The MPA is screen agnostic, but we join NATO in recognizing the vital and undeniable importance of movie theaters in delivering a unique moviegoing experience to audiences around the world. We believe people should be able to enjoy great TV and films on whatever screens they choose, and we appreciate that there’s nothing quite like watching movies on a big screen. It’s important to remember that streaming and theaters can and do thrive together. Data commissioned by NATO shows that streaming platforms don’t draw substantial numbers of moviegoers away from theaters, because those who attended movies in theaters more frequently also tend to consume streaming content more frequently.

FITHIAN: Streaming is a very complicated discussion. People describe streaming services as cannibalistic at the core. We view streaming and theatrical as theoretically supporting each other and studies do show that. The short-term problem now is that the streaming world is not about making money. They are putting content onto streaming services because that is Wall Street’s golden eye. It is not about making the most money. If you debut a film theatrically and it does well and gets established as a brand, when it hits your streaming service, it drives more eyeballs and business. If you drop them on a service first they get lost. People can’t find them. There are 10,000 options. What makes the movie is the theatrical release. Even studios with their own streamers are going to realize.

Apple and Amazon are different, they are not trying to make money on the movies. Amazon is trying to get you to buy groceries and use Prime Video.

But there are too many services. People won’t pay for them all. The studios will [eventually go back] to the business model that makes them money. Not to pre-pandemic windows, but that shouldn’t be. The good news is that studios and theater owners are talking now.

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