CINEMA MUCHO GUSTO

WEEKLY CineBUZZ REPORT - 1 February 2012

2012-02-02T09:55:00.000-05:00

Exhibitors will pay tax on VPF payments

IRS WILL RULE "VPF" IS INCOME TO EXHIBITORS
It is almost a given that the IRS will rule that the Virtual Print Fee (VPF) that the studios pay exhibitors (through companies called integrators) will be subject to and will be considered as ordinary income to exhibitors receiving the VPF.
Revenue Canada, the Canadian equivalent to the IRS, has already ruled that the VPF will be reported by exhibitors as income. Additionally, in Canada, there will be no VPF associated with second-run films. I have not heard, as yet, if the VPF will be offered to U.S. second-run cinemas; although a $300/print fee was rumored.
The VPF scheme, is just that - a scheme to entice exhibitors into digital conversion - but as one delves more and more into the details the scheme becomes less and less attractive in view of the stipulations associated with it. And yes, I hear the lament of exhibitors saying, " well it's better than nothing", but is it? Each exhibitor should take a hard look at the VPF program. What is its duration? How much do you receive in fees? How and under what circumstances can the studios void the contract? How much control do you have to cede to the studios regarding the operation of your cinema? Are there additional operational or equipment costs in adopting the VPF? Under the VPF who owns what?
A VPF of $800 or $300 - after integrator fees, "other" expenses, and taxes - what is the exhibitor left with and how long will it last? Given the studios' current barbarian bean-counting mentality, to me its a one-sided game, because if it wasn't Hollywood would have paid for the industry's conversion long ago

Tech Kings Win Anti-piracy Battle

HOLLYWOOD LOSES PIRACY BATTLE TO INTERNET KINGS

As report is the CTC Flash this past Monday (1/30) Hollywood lost its fight for new and enhanced anti-piracy legislation in both houses of Congress last week. What had once been considered a shoe-in for the entertainment industry and associated labor interests crumbled as the Internet mavens put the pressure on legislators in both the Senate and House of Representatives forcing them to renege on their prior commitments to Hollywood and its cohorts.

This was a major blow to Hollywood and is an indication of their weakness and diminished clout in battling the tech Kings.

CINEMA TRAINING CENTRAL KICKS OFF 2012

New Workshops & Seminars of 2012

CTC has a new website and Guidebook for viewing at www.cinema-training.com . This year seminars and workshops will be offered in April and October, and we are anticipating increased attendance given the situation confronting cinema exhibitors and their need to bolster customer service and marketing, and enhance operations and technical capabilities.

Best and Happy Movie Going!
Jim Lavorato

My IMAX "EXPERIENCE".............REALLY

2012-01-28T19:00:00.000-05:00

THE SETTING
It's Saturday night (1/21). Three visiting relatives and I decide to attend a 7pm IMAX showing of Underworld Awakening - 3D. The IMAX is located at the Regal Cinema Transit 18, Williamsville, NY.

Admission for four adults - $64, our concession
brings the total to $112.
THE PRESENTATION
Showtime - we're excited. The trailers began and end. Then, a blank screen (no picture/no sound). After 10 minutes moviegoers are on their cells calling the Theatre to inform them that they are sitting in the IMAX auditorium with nothing happening. 5 minutes later the movie starts.
In the upper left section of the screen are huge swirl marks and the image is slightly blurry. The 3D glasses are chintzy throw-aways (bright yellow of flimsy plastic with stiff non-folding arms and very thin lenses). There are collection bins at the exits so Regal (I assume) is re-using the glasses to save money.

My companions notice the swirl marks and ask what I think. I believe it is a lens problem, and not screen or movie related. The image is dark and unless you keep your head looking straight ahead the image blurs. This is really a very poor 3D presentation.
THE "IMAX EXPERIENCE" ...... REALLY
Great movie - I really like the Underworld franchise - but the presentation was horrendous, especially in view of the $100+ cost. My three compatriots echoed my sentiments and all agreed that the overall presentation was awful and certainly did not merit its cost. We were all expecting a premium presentation and were extremely disappointed and, as you can guess, not too keen on another visit to the IMAX anytime soon.

Big and Bad

To make matters worse, this particular IMAX is showing its age (my guess - 12-15 years old). The seats are small as compared to new theatres with back-to-back seat spacing short making for cramped leg room. The seats do not recline and have fixed cup holder (not retractable) armrests.
My IMAX "experience" is the reason cinema attendance continues to drop. Movie exhibition, at many cinemas, is not customer-centric or friendly but hostile, uncaring, and money driven - and moviegoers are acutely aware of this.
Consumers like going to the cinema, but more and more it is becoming a non-value based activity as compared against other ways of viewing and enjoying a film. Regal and IMAX need to take note and quickly.

Cheers!
Jim Lavorato

WEEKLY CineBUZZ REPORT - 25 January 2012

2012-01-25T12:53:00.000-05:00

2011 Oscars : Horses, Dogs, and Cats

For me it wasn't a strong year for movies - a sentiment shared apparently by the Academy as only 9 instead of 10 films got the Best Pic nomination. They must have felt that out of the 598 commercial releases not one more was deserving of the "Best" accolade. I can say that the 2011 nominees are varied. From 3D-to-black&white, baseball-to-9/11, race relations-to-Paris love.

My pick for Best Picture is "The Artist" Not seen by many moviegoers (it only grossed $12 million) but it is a tribute film to old Hollywood which the Academy members (who are old) always love. The movies that make the real money are never nominated. The Harry Potters, Twilights, and super heroes, for all of their box office draw, can never expect to see a nomination let alone Oscar. The Academy is, well, above those kinds of movies. This is, after all, about advancing the art form. Hmmm, but without the mega-action flix there would be no Hollywood, no Academy. So, aren't the Oscars just a put-on. Aren't the Oscars a vehicle for Hollywood to advertise its contribution to the betterment of mankind, and of course a way for the public to view "the stars" all made up for their red carpet ride. The Oscars are what Hollywood is - make-believe and hype. Which is fine but at least change the faces. Scorsese, Allen, and Spielberg. Clooney, Streep. Their tiresome. No wonder the Awards lose viewership very year.

Speaking of tiresome, there will be 24 Award categories for the TV presentations. This should be streamlined down to 12, which would make the show much more entertaining and viewer friendly. The folks (I for one) aren't interested nor care about film editing, mixing, makeup. The 12 Oscars Awards for TV airing should be:
Best Pic, Actor, Actress, Supporting Actor, Supporting Actress, Director, Original Song, Documentary, Foreign Film, Cinematography, Visual Effects, and Animated Film.

Nuff said. Oh, one other thing, it was a good year for horses, dogs, and cats.

What is The Academy and How Do They Vote

Membership to the Academy of Motion Picture Arts & Sciences is by invitation from its Board of Governors. Each candidate must be sponsored by at least two members of the branch for which the person may qualify. They must than receive the endorsement of that branch's executive committee before submission to the Board. There are 15 branches to the Academy.

The race to nomination consists of attempts by film makers to ensure that each of the 6,000 Academy voting members views their film. This means special screenings, free admission to commercial runs, mailing DVDs, etc.

Nomination ballots are mailed to active members in December and are due back in January. Members of each branch vote to determine the final nominees in their respective category - actors nominate actors, directors nominate directors, and so on. The exception is Best Picture, where all Members are eligible to cast a ballot.

Final ballots are then mailed to all voting members in late January and are due back, no later then the Tuesday prior to the Oscar Sunday presentation.
All members vote for winners in all categories. Final votes are tabulated by only two partners of PriceWaterhouseCoopers (an accounting firm) and the results announced when the famous envelopes are opened on stage during the Oscar presentations.

Cheers and Happy Movie Going!
Jim Lavorato

KODAK - RIDING THE WAVE

2012-01-22T10:48:00.000-05:00

What can I say about Kodak. Was it yet another victim to digital domain disruption? A casualty of mismanagement? Was it a failed entity or one just suffering from the ravages of old age and near the end of its life-cycle. What was it that morphed an iconic American company into a bankruptcy court flier and likely absorption candidate by another entity.

One of Kodak's early '70s digital cameras

I have worked with Kodak for the last 20+ years on a variety of cinema related sound and projection projects. It always occurred to me that I was working with very smart and motivated people. But, like many large and very successful organizations, over time, they become departmentalized and layered. This has the effect of making the status quo the goal - as this is where prior success was spawned. Kodak was too successful. Given Kodak's utter dominance of the analog film industry (on a global basis) their emphasis and single mindedness was to keep the game going even when faced with certain inevitable outcomes from the digital domain.

New Packaging Imager

Kodak executives were fully aware of the impact the transition to digital photography would have on their business model. In fact, Kodak still owns many of the patents on digital photography (see CMG post " Kodak's Hidden Treasure" - August 20,2011). Additionally, Kodak built one of the first digital cameras, way back in 1975! At its heart, Kodak is a chemical and engineering company. It weakness was its marketing, promotion, and business development. Kodak could develop products but never effectively market them. So, like most companies it fell back on its core strengths to keep profitable - which was continuing to make advances in film technology and manufacturing.

The Kodak story is one of evolution and corporate fatigue not failure. Capturing the digitial photographic market, the way it had (so successfully accomplished) with film, was not in their grasp. And even if they had gotten control of it there were no profits to be made. Digital photography was and is a financial non-starter. Kodak did the only thing it could - ride the wave until it reached shore.

Best and Happy Movie Going!
Jim Lavorato
Cinema Consultant & Advisor

WEEKLY CineBUZZ REPORT - 17 January 2012

2012-01-17T15:57:00.000-05:00

Gov't Flexes Muscles

CHINA CRACKS DOWN ON CINEMAS

Last week the China Daily reported that the Chinese Government was placing a prohibition on the playing of pre-feature advertisements after the posted start time (which must be printed on admission tickets) for all movies. Cinemas violating this restriction would be fined 200,000 yuan ($31,520) and/or face operating license revocation.

Additionally, the new law makes mandatory the exhibition of at least one free movie per month to the public and two free movies during each school semester for students. It further stipulates that cinemas would be punished by fine and imprisonment for concealing box office receipts and that," any film that fails to obtain a government issued distribution permit shall not be exhibited at a cinema, over the Internet, or at film festivals."

The Chinese Government wants full control of the cinema and what its citizens view.

APPLE IN YOUR LIVING ROOM

Apple's scheduled launch of the iTV will be in the 3rd quarter of this year. I expect the iTV will feature the Siri speech recognition technology (used in the latest iPhone), customizable apps, over-the-top TV service (in other works, no set-top box) all coupled with on-line service for movies, TV shows, social networking, etc., etc. Apple's goal is to bring simplicity to TV viewing, which is currently cluttered with set-top boxes, cables, and remotes. The iTV will have bright color and excellent image (ala the iPad and Mac), low power consumption, and super thin design.

My understanding is that the technology for the iTV (hardware and software) is not the holdback to market intro, but inking partnerships and negotiating licensing deals from content providers is the stumbling block.
iTunes has a huge library of movies and TV shows but these are for download - Apple wants new and live broadcasts and content. Right now, the only way to view this "premium" content is by going to the cinema (in the case of movies) or by subscribing to cable or satellite (in the case of TV programing). What Apple, Google, Amazon, and other tech Kings want is for consumers to have the ability to choose their own customized programming - movies, shows, sports, etc. - for a monthly fee and in the process use the Internet and cloud services for content distribution and storage. This change, however, would bring major disruption and re-script the traditional entertainment content distribution model for the movie studios and cable/satellite operators.

Google, is going a step further. It is in the process of developing over 20 web-based networks of their own which would produce for webcast original shows, movies, live sports and other events - essentially becoming a studio.

The tech Kings are relentless in their pursuit to poach TV viewers and moviegoers away from cinemas and cable/satellite. Can they be stopped? No. Simply because of two overwhelming factors. First, the Darwinistic and unstoppable nature of the technology driving the digital domain; and second, because they have the financial strength to fund their efforts. For example, it is estimated that by the end of the second quarter of this year, Apple will have over $100 billion in cash and other tech Kings are also flush with cash. Microsoft $57 billion, Cisco $44b, Google $43b, Oracle $32b, Amazon $30b. The Kings can negotiate good deals with the media giants as they know they have the upper hand and if they can't strike a deal they will simply buy them out or create their own "premium" content.

WALL STREET PREDICTS BOX OFFICE GROWTH

Several Wall Street stock analysts believe the cinema box office gross will grow in 2012 - but solely based on higher admission pricing. Ticket sales are anticipated to continue their downward spiral, due to , you guessed it, higher admission pricing. Movie exhibitors must get into their noggins that ever higher admission pricing beget less moviegoers.

Barclays Capital media analysts are predicting a 1.5% increase in U.S. box office grosses which will reach $10.31 billion. However, they anticipate attendance to drop by 1%. The average ticket price will be $8.12. MKM Partners and B. Riley analysts foresee a 3-4% box office gross increase based upon a 3-5% admission price increase.

The 2012 movie slate looks promising with The Hunger Games, The Avengers, Men in Black 3, Madagascar 3, Brave, The Amazing Spider Man, The Dark Knight Rises, Twilight, The Hobbit, and James Bond 27 likely blockbusters.

Year-over-year, the 2011 box office was down 4% but admissions took a shellacking dropping close to 5%. This is unsustainable for the cinema. Do exhibitors really believe rising ticket prices will ever provide a balanced offset to attendance losses? If so, this is a major strategic miscalculation on their part!

Cheers and Happy Movie Going!
Jim Lavorato
Cinema Consultant & Advisor

CINEMAS & WAL-MART BATTLE COMMON FOE

2012-01-15T17:24:00.000-05:00

Circuits need to downsize

I don't want to become too snarky, but feel compelled to reiterate the point regarding the nature of the Internet and its eminent disruption to the cinema. I have also stated the the large cinema chains will be impacted and that their defensive strategy must include downsizing - both in terms of sites and theatre sizing.

Fortunately for the large cinema circuits, the Internet is also the nemesis of large retailers, to wit, the Regals, Cinemarks, and AMCs should look to the big retailers for survival cues - and the retailers current battle against what marketing gurus term the "Amazon disease".

WalMart, Costco, and Target's revenues make up roughly one-fifth of U.S. retail sales, but they are acutely aware that competition is intensifying. On one flank are the dollar stores, on the other, e-commerce - where on-site price comparisons from Amazon are killing big-box electronic outlets like Best Buy while negatively impacting the large retailers. To put size into perspective, WalMart operates 3,759 U.S. stores, Target 1,750, and Costco 425. Although operating much smaller stores, nonetheless Family Dollar operates 6,800 locations and Dollar General 9,500.

"Amazon is WalMart's biggest threat, hands-down", Natalie Berg, retail consultant at Planet Retail tells me. "If you look at retail stocks, companies that are viewed as at risk to "Amazon disease" have had their multiplier cut in half".

WalMart fights "Amazon disease" with smaller sites

To combat this, the large retailers have embraced selling more products under their own in-house brand, which stymies consumer efforts to make web-based price comparisons. Also, private label products carry a higher margin and breed consumer loyalty. Additionally, WalMart (leading the way) has turned to smaller format stores. In July, it launched WalMart Express (smaller stores that are easier to site and offer a product mix that is 70% groceries). Even smaller are the new on-Campus stores which launched last year. Bill Simon, WalMart CEO commented that, "WalMart plans to open hundreds of the smaller format stores over the next three years".

Amazon price sets by Region

Price matching guarantees are another tactic in the retailers arsenal in fighting the Internet. "It's all about obscuring price transparency and product exclusivity. The more you go down that path, the more immune you are to Amazon", says Berg. Amazon's strategy (and they are not alone) is to change buying habits, not only for hard goods but for entertainment, and movies are on their menu.

Social networks and wireless services are becoming a big part of marketing and all cinema exhibitors should take note of this. The Internet tech Kings' intentions are to poach moviegoers. The battle will be fought on razor-thin margins so flexibility and timing are key.

The large cinema chains should study how the big retailers are addressing the Internet threat and begin forming a defensive strategy of their own - and downsizing must be a big part of that strategy.

Best and Happy Movie Going!
Jim Lavorato
Cinema Consultant & Advisor

WHAT PEOPLE WATCH

2012-01-13T15:26:00.000-05:00

Hopefully, the Cinema will find 2012 a stellar year; however, it will be bucking some headwinds from the Presidential election and Summer Olympics. Nonetheless, consumer trends promise high demand for quality entertainment content. Much of that demand is driven by the proliferation of smartphones, tablets, other mobile devices and smartTVs that allow consumers to view both movies and TV shows most anywhere, at any time they desire. Luckily, they still do not have the impact of a cinema presentation - image and sound. However cinemas must be cognizant of what is happening around them and consumer trends taking shape.

Over 57% of People View On-line Videos

According to Google, U.S. consumers own over 105 million smartphones, 61 million gaming consoles, and 20 million tablets. Given that video consumption is in a hockey-stick growth pattern and users want to access video (including movies) - to say the trend for streaming content is strong has become a cliche'.
So, what are people watching? Research I've read from a variety of sources, including: PriceWaterhouse, Nielsen, Fox Cable Networks, Turner Broadcasting, and Multichannel News, suggest that viewing premium content on mobile devices is unstoppable and has moved streaming video out of the "new media or early-adopter" category and placed it firmly into the "mainstream mass-market" sector. Studies have found that the availability of content on multiple platforms helps build audiences because viewers can watch content they have missed - be it movies or TV shows.
These mega-trends in consumer behavior do not bode well for the Cinema overall but they will take time to fully manifest themselves allowing exhibitors time to prepare for them and defend against them.

Best and Happy Movie Going!
Jim Lavorato

FUTURE FOR THE CINEMA - DISRUPTION

2012-01-11T18:59:00.000-05:00

Jobs, as he unveiled Apple TV last year

DISRUPTION is the name of the game in the digital domain. Did the studios and movie exhibs really think they could control film distribution once it went digital? That is why over the past decade I have been against the digitization of movie theatre projection (which I might add was a losing battle).
Take for example, the latest maneuvers by Apple. Apple's desire is to become the go-to source for movie streaming/viewing in the future. At $99, the Apple TV set-top box sold over 4 million units in 2011 and with only 8% of U.S. households (7% in Europe) owning smartTVs the growth in connected-TV sales will be huge over the next 5 years.
For its part, Apple plans on being in your living room, as it interfaces its existing base of mobile devices (which number in the tens of millions) with the Apple TV. Both the iPhone and iPad will serve as remote TV controllers and AirPlay (a feature on Apple's iOS operating system) will allow mobile devices to move media to the TV from the devices and, in reverse, allow the iPhone and iPad to serve as complementary screens.
AirPlay will also feature a mirroring function which displays a mobile device's screen onto the TV and will also allow the device to functions as a game controller. Moreover, Apple is planning to launch its own TV in 2012 which will be able to tap into iTunes for seamless rentals and purchases of movies and TV shows, as well as music.
At present, Smart and connected TV sales are outpacing set-top boxes. Gaming consoles are currently the number one platform for streaming content directly to TVs but this trend will change as well. Microsoft is also planning a link-up mobile devices and TVs using its Kinect system.

Going Digital-Is It A Waste?

Movie exhibitors be prepared. It will not be enough to tell moviegoers, as Regal Cinemas postulates in its pre-feature trailer - " Go Big or Go Home". People are at home and they are staying there to view movies more and more and going to the cinema less and less. Cinemas exhibitors, prepare to defend yourselves.

Cheers,
Jim Lavorato

REAL STAR POWER

2012-01-10T09:14:00.001-05:00

WHO ARE THE REAL HOLLYWOOD STARS ?

If you take a look at the top 20 highest grossing films of all time, you quickly realize that only one had an A-lister in the lead role. The real stars of these films were the high-impact visual effects and/or computer-generated animation.
Top 20 Grossers

Avatar

Titanic

Harry Potter - Deathly Hallows Part 2

Transformers - Dark of the Moon

The Lord of the Rings - Return of the King

Pirates of the Caribbean - Dead Man's Chest

Toy Story 3

Pirates of the Caribbean - On Stranger Tides

Alice in Wonderland (2010)

The Dark Knight

Harry Potter and the Sorcerer's Stone

Pirates of the Caribbean - At World's End

Harry Potter - Deathly Hallows Part 1

The Lion King

Harry Potter and the Order of the Phoenix

Harry Potter and the Half-Blood Prince
The Lord of the Rings - The Two Towers

Star Wars - Episode 1- The Phantom Menace

Shrek 2

Jurassic Park

A-lister, Johnny Depp, in the Pirate franchise was the only recognizable star in any of these films. The rest were cast with unknowns or limited (at the time) star power actors.
It appears that this long-term trend will continue, as upcoming movie franchises are copy-catting the former winners. The super-spectacular effects movies are what consumers demand and it makes little difference to them who is cast in the acting roles (which for moviegoers are ancillary to the movie's appeal). Additionally, customers expect each new film to top the previous one's visual effects. That places the "star" power in the hands of the superstar special effects artists which now earn over $1 million per film.

Cheers and Happy Movie Going!
Jim Lavorato

WEEKLY CineBUZZ - 8 January 2012

2012-01-09T11:32:00.000-05:00

TELL ME SOMETHING I DON'T KNOW

Movie Ticket Prices Hit A High in '11

Rehashing the cinema's 2011 performance is futile. Scouring cinema grosses and admissions data and comparing it to prior years is not a fruitful exercise. It is enough to say that there are few bright spots on the cinema industry landscape. Need I say it one more time, "the cinema industry needs to re-script its business model".

To that point, a colleague brought to my attention an historical fact that was unknown to me regarding the pricing of movie admissions (as most of you are aware I have been beating the drum for some time now regarding the tiering of admission pricing, as I believe not all movies have equal box office draw) and that at one time movies were "rated" and priced accordingly. See next bullet item in this report.

But, tiering admission pricing is but one of a cadre of changes that need to be embraced and implemented by the cinema industry - with exhibitors being the spearhead for most of the changes that need to be made.

Unfortunately, the timing couldn't be worse. As we witness the challenges facing the industry, manifested by the decade long decline in cinema ticket sales, and currently in the grips of a conversion to digital projection which saps the, ever dwindling, financial resources of exhibitors. Resources which should be going into revamping and modernizing their business operations - to address declining ticket sales.

Let's all hope 2012 is a turning point for the cinema industry and both distributors and exhibitors began to embrace the operational changes needed to return the industry to solid financial footings.

HISTORY NEEDS TO BE REPEATED

Let us step back in time, oh say about 40 or so years, and look at the way cinema tickets were priced. Back then, films were given an A, B, or C rating depending upon how much star power and cost went into a movie. An A listed film carried a higher admission price than a C rated one. In the 1970s that pricing strategy (which made extremely good sense) was abandoned and movies were given to the same pricing no matter the content or cost. Cinemas need to go back to the old pricing regime. The lowering of the admission for second tier movies would increase volume at the cinemas, as moviegoers might not mind paying $5 to see a B rated film.

Now the studios figure that if the folks think that cinema admission is too high they will wait and do a buy/rent of the DVD or pay-per-view. Too bad because DVD sales/rentals are on the slide. In fact, Bloomberg Business, just last month ranked the DVD sales/rental business as one of the "dead businesses" of the future as more and more consumers are accessing the Internet for their entertainment.

Now, don't get me wrong, their will be cinemas in our future, but they will (must) be different then they are today and tiering admission prices is a step in the right direction.

INCREASING THE HOLDBACK PERIOD

Last week Warners Bros. announced that it was going to extend the holdback period (the period of time when a movie is made available to various content providers) for Netflix and other content streamers. The new deal between Warners and Netflix, Redbox, and Blockbuster among others, will double the window for new releases. This means that the streamers/renters will now have to wait 56 days after the DVD first goes on sale, instead of the current 28 days.

This move by Warner Bros. helps cinemas slightly, but their motivation is to bolster sagging DVD sales. To be announced this week at the Consumer Electronics Show, the streamers are stating that they haven't agreed to a new deal, but execs at Warners have been talking up the deal.

The move for longer holdover periods is also tied to Warner's push for UltraViolet (refer to prior posts on UltraViolet) the electronics/media industries' consortium that allows individuals to have a "lockers" where they can store content of all sorts for retreival whenever they like on whichever device they like.

For their part the streamers/renters, like Netflix, aren't making too many comments. Coinstar's (parent of Netflix) CEO Paul Davis, only commented that "Netflix would be persuing 'workarounds' if the studios tried to extend the holdback period".

Extending holdback periods for whatever reason is good news for cinemas, so long as the period is not tied to Internet streaming or very short periods for DVD or VOD options.

Best & Happy Movie Going!
Jim Lavorato

HOLIDAY GREETINGS & ADVICE from CMG

2011-12-22T13:49:00.003-05:00

Fight For Your Right To Party

Happy Holidays Everyone! Taking a page out of Lindsay Lohan's party etiquette book may not be appropriate but I thought, what the hay, I'll gift a little wisdom to go along with my holiday greeting - you guys deserve it.

Now, I know, many of you will be celebrating and partaking in festivities that include attending parties which can breed temptation and misbehavior. Not to worry, because this year CMG is providing you a Gentleman's (Woman's) Guide to Party & Self-Behavior, whether at a home or office holiday gathering.

1. Stay Away From Drunks - You of course, remain above the fray, but you may be confronted with inebriated friends, family, or acquaintances.
Best: remove yourself from their presence. Use the tried and true,"Oh, I hear my phone's ring tone. It must be Santa calling". Particularly in a business setting being "seen" with a drunk is never good for career advancement.

2. Kiss Up - Here's your opportunity to put a face to all of your memos, emails, and tweets - go for it! A quick suck-up can go a long way in cementing your relationship with a higher up. Have a game plan. Know before the party starts who your targets will be. Happy hunting.

3. No One Likes A Kill-Joy - Be sure not to gossip, gripe, or air your frustrations (business or personal - we all have them). I know it can be difficult but you must demonstrate that upbeat and "can do" spirit. Here's where taking that Drama class finally comes in handy. Complaining is natural to you, so fighting the urge to expunge may take some doing. Practice at being positive and remember, never philosophize or moralize - these are real downers.

4. Keep It Light - Small talk is the rule. Upcoming vacation, holiday plans, light-hearted topics are best. Stay away from politics, religion, and personal issues - no one cares anyway and you'll be cast as an opinionated and bigoted zealot.

5. Lay On The Charm - Your boss's significant other (and overseer) is numero uno on your charm list. Give them special attention but don't over do it. Strike up a conversation. Stay cool and don't spill your drink on them, and don't eat while your talking.

6. Watch What You Wear - Cleavage is touchy. Go with it or conceal? Best- reveal but tastefully. Experiment with colors, never wear all black. Go with bright colors or color accents - you want to be remembered but in a good way. Worst mistake: the strapless dress. You look naked to the people sitting across from you at the table.

For you men-folk, What can I say - go with a more-than-normal (for you) festive look and never, never wear a Reindeer sweater or Santa hat.

7. Prep Your Party Partner - Even the best of back-slappers can be undermined by a drunk or obnoxious partner. Prep your partner before hand. Share info on the pecking order. If a female, inform her of the cleavage rules, if male enforce the two punch bowl visit limit. Tell them to smile and nod. They are your surrogate and their behavior reflects on you. Best: skip the partner and soldier-on solo.

8. Beware The Sweaty Right Hand - Parties and handshakes go - dare I say it - hand-in-hand. You will be shaking a lot of hands. Go easy. Refrain from bear-hugs and don't go too Euro on the cheek kissing. Keep drinks or other objects in the left hand, a sweaty or wet shake is always frowned upon. Have Purell at the ready, use it discreetly but often.

9. Show Appreciation - Thank the hosts before leaving even if you had a miserable time. It's not their fault, given current economic conditions, that party expenditures have been pared. Beer v. vodka, ChexMix v.canapes, spinach dip v. caviar, its all a sign of the times. Show appreciation for the effort if not the substance.

10. The Follow-up - This is why you went in the first place. Schmoozing, intro'ing yourself to the office hottie, making that cool but critical impression, cementing the connection. Follow up with a short email and suggest a lunch or coffee date.

Merry Christmas and Happy New Year!
Jim

Future Bright For Video-on-Demand, Says CEO Benya

2011-12-20T00:52:00.000-05:00

In Web-chat Bob Benya, CEO of In Demand - the pay-per-view and video-on-demand content distributor - talks about his company and what the future holds.

For 2011, In Demand generated $1.3 billion in revenue and down-loaded approximately 175 million on-demand movie buys.

Bob Benya

What does 2012 look like for In Demand, Bob?

We're doing a lot of things with the release windows and trying to get more and more movies. We're also trying to give customers a 48 hour rental window and doing a lot of packaging. Having the customer purchase 3 or 4 movies at once at a lower price per movie.

In Demand had a very good year, what was that performance based on?

One, was to get day-and-date releases with DVD releases, which is now virtually 100%. Second, increasing the number of titles available for 48 hour rental. Third, is the Netflix hold-back, and we've been talking with the studios about extending Netflix's and other streamers hold-back. And finally, the continued expansion of acquiring independent films to fuel the VOD platform. We are now working with over 50 independent film studios. We've seen a substantial increase in the overall independent film business, and we are getting these titles the same day as theatrical release.

What's the future look like?

In Demand will be getting a lot broader and deeper on price testing and really looking at it in a much more sophisticated way. I think the studios are definitely interested in optimizing their return on investment for movies, and I think they are going to release product earlier. The other issue, we are big-time in favor of, is the studios offering 10 minute previews of movies to allow viewers an opportunity to watch before purchase - it's really good for our business.

Thanks Bob.

In Demand is owned by Comcast Inc., Cox Communications, and Time Warner.

Cheers,
Jim Lavorato

GAMING CONSOLES MOST POPULAR FOR MOVIES

2011-12-19T09:46:00.001-05:00

Nielsen Company, the pre-eminent media eyeball counter, reported last Wednesday that consumers are increasingly using their gaming consoles - Xbox, Wii, and PS-3 - for streaming movies and TV shows.

Gaming consoles readily connect to the Internet so they are used to access VOD services like Netflix, Hulu, YouTube, and other streamers including ESPN and the Major League Baseball Network for sports.
Nielson found that gaming consoles and AppleTV were the most popular ways people chose to view movies on their HD-TVs. Proven to be very effective in accessing Netflix, Nielson found that half of Netflix users utilize streaming from game consoles.

Streaming video accounted for 14% of the average time spent using the X-box, for the PS-3 it was 15%, but for the Wii 33% of owners spent their time streaming movies or TV content.

Both Xbox and Sony's PS-3 consoles are also popular as DVD players with the PS-3 capable of playing BluRay discs. Sony last week stated it would exceed its forecasted sales of PS-3 and expects to sell 1.5 million of the consoles in fiscal 2011.

Cheers,
Jim Lavorato

SILICON vs. CELLULOID

2011-12-18T11:27:00.000-05:00

Tech Kings Fight Back

As anticipated, the battle between the silicon valley Kings and the celluloid Moguls has begun - and somewhat sooner then even I expected.

In their effort to block anti-piracy legislation, Internet companies, including Google, Facebook, Amazon, and even Bloomberg are lobbying Washington hard saying that the Hollywood backed piracy measures - to curb trafficking of illegally copied music and movies - would amount to on-line censorship.

The legislation, as proposed, would allow the Justice Dept. to seek court orders requiring Internet service providers, search engines, payment services, and advertising networks to block or cease business with non-U.S. websites linked to piracy.

Anti-piracy poster

For its part, Hollywood has been waging its own rigorous campaign. For example, last week a delegation led by the Motion Picture Assoc. of America and consisting of executives from Fox, Warner Bros., and others descended on Washington, D.C. for meetings with members of the House Judiciary Committee, V.P. Joe Biden, White House Chief of Staff, Bill Daley, and Valerie Jarrett, a senior advisor to President Obama. They reject the tech companies' accusation that the proposed legislation amounts to on-line censorship.

The Web honchos, however, say that the anti-piracy laws would require them to police the Internet and "threaten the growth of the U.S. technology industry". To bolster their case they are also flexing their political muscle. Google and Facebook have increase their spending and presence in Washington to cope - not only with the pending on-line piracy legislation but consumer privacy and antitrust issues as well. Google has hired 19 new lobbying firms this year alone, and Facebook just added two new lobbyists to its army.

The tech firms are pushing for alternative legislation that would make the U.S. Intl' Trade Commission versus the Justice Dept. the major arbiter of piracy issues. The U.S. ITC has the power to block the import of products found to infringe on intellectual property rights. In a statement, the Consumer Electronics Association, asserted "the alternative would provide effective remedies without creating new liabilities for lawful, U.S. technology companies."

As of now, an amendment the the House and Senate bills has been added which calls for an "inter-agency study on the legislation's impact on the Internet." So, for now, there is a truce putting the battle on hold, allowing the opposing groups time to re-arm.

My Take

First, U.S. anti-piracy laws have no clout overseas and are not enforceable. And second, Hollywood is fighting the last battle, as the only way to stop piracy is to release movies day-and-date across the entire world accessible to all projection and mobile devices simultaneously. And we will reach that point in the future.

Best and Happy Movie Going!
Jim Lavorato

VENDING MACHINES THAT KNOW YOU

2011-12-17T05:57:00.000-05:00

Better Than Humans For Customer Recognition

If you read CMG with any regularity you know that I am a big proponent of self-serve concession at cinemas. So, the next stage in the development of vending machines (which, I might add, have recently made huge in-roads in regards to customer interface) is of great interest to me.

Face Recognition Improves Sales

A new concept vending machine developed by Sanden Corp., in cooperation with Okaya Electronics and Intel incorporates a 65" full HD display with a "transparent" touch screen. The display can show custom graphics, product & merchandizing information, and functions as a large clock when not being used.

Human Inter"face" Literally

The major development however, is that this vending machine offers facial recognition so it can display customized menus based on an individual's prior use. And, if it doesn't recognize the face, it will display products based upon what it THINKS the customer would want - performing a quick profile based upon age and gender.

Although not currently being sold, this is the cinema "concession sales clerk" of the future.

Cheers & Happy Movie Going!
Jim Lavorato

EXHIBITORS BATTLE OVER A SHRINKING PIE

2011-12-16T06:03:00.000-05:00

In Legal Battle Over "Circuit Dealing"

As I mouse around very nook and cranny of the cinema industry I sometimes come across befuddling situations that defy logic. Case in point: the lawsuit between independent theatre owners of Palme d'Or Cinemas and the Cinemark Group.

A few years ago, a group of independent theatre owners upgraded a rundown 7plex in Palm Desert, CA into a modern cinema complete with French cafe and named it Palme d'Or, after the Cannes fest award. Their dream was to have the Theatre be "the desert's premiere address for cinephiles" exhibiting a selection of art house, specialty, and foreign films. But the owners weren't just any old film buffs, but included: Bryan Cranston, star of TV and movies, and Emmy winning actor of "Breaking Bad" and "Malcolm in the Middle"; Hollywood producer Alise Benjamin, who among others co-produced the Oscar winning film "Ray"; and Steve Mason, nationally known ESPN talk-show host

Palme d'Or Cinema

They are now in a legal battle against Cinemark, the third largest U.S. theatre chain, claiming that Cinemark along with the studios illegally restrained trade by not allowing the Palme d'Or to play certain films. The suit, initially dismissed in a Los Angeles civil court, was recently reinstated by the California Appellate Court.

"It's like they're Starbucks and we're a small coffee house and they're preventing us from getting coffee beans", states Cranston, from Toronto where he is on set for the film Total Recall. "We're fighting for our existence." It is expected that the industry's top studio distribution honchos will be called to testify about their behind-the-scenes Hollywood release practices.

The Palme d'Or owners realized how unfair release practices were when they had to fight with Universal Pictures to get a print of "Ray" even when one of the owners co-produced the movie.

For their part, Cinemark, in a statement said, "the Court of Appeal's ruling was flawed and flies in the face of established modern antitrust law" and it would appeal to the California Supreme Court if necessary. The suit claims Cinemark engages in "circuit dealing" - where large chains leverage their size and buying power to pressure distributors from booking movies in small theatres. Circuit dealing was outlawed in 1948 by a U.S. Supreme Court ruling.

Here's my take:

Exhibitors have little market power as it is and as competition via the Internet intensifies - and it will - the large cinema chains burdened with heavy overheads and fixed costs will become more desperate. I envision the large chains getting smaller over the next decade as the cinema business model changes to one where large corporate structures cannot be supported. Exhibitors should stop fighting between themselves and get down to the real task at hand in changing their entire business model and embracing CMG's five cinema essentials: value, quality, experience, participation, and convenience.

Best and Happy Movie Going!
Jim Lavorato

'HUNGER GAMES' PUZZLE HUNT- Get Started!

2011-12-15T15:25:00.000-05:00

CMG Has Piece of the Puzzle

To promo "The Hunger Games" movie franchise, Lionsgate is conducting an on-line jigsaw puzzle hunt. The one-sheet (cinema lingo for a movie poster) for "Hunger" has been cut into 100 jigsaw pieces. When the first person to amass and solve the puzzle (and posts it to the "Hunger Games" Facebook page) the poster will be released - and the winner given a prize.

The puzzle pieces are being made available in the greater digital domain. So, if you have a lot of time and are a "Hunger" crazy you can start collecting by emailing me. That's right, Cinema Mucho Gusto has the #40 piece which I will gladly email to you upon request. I'm waiting.

Best & Happy Movie Going!
Jim Lavorato

WEEKLY CineBUZZ - 13 December 2011

2011-12-13T14:02:00.001-05:00

BOX TOP

I know I said box office action tends to slow the weeks before Santa arrives but last week was a total box office bust - and I remain somewhat skeptical about this week's. Hopefully, new releases: Alvin & The Chipmunks: Chipwrecked (Fox) and Sherlock Holmes: A Game of Shadows (Warners) will provide the elixir to get ornery moviegoers out of their lackadaisical, no mas movies, state of mind.

At numbero uno was star-studded (really ?) New Year's Eve (Warners) which struggled mightily to get into the teens ($s millions) as box office attendants sat lonely and dreamily at their talk-thrus. New Year's take was just $13 million and richly received an instantaneous Twitter "no go" from under-struck viewers.

Number 2 was The Sitter (Fox) which garnered a measly $9.8 million (production cost: $55 mil.). Jonah Hill isn't funny - period! The Sitter is a sea-of-sameness and now that Hill has lost a ton a weight (needs more loss) are we destined to see him in romantic roles? Please Hollywood, for all that is holy, say NO!

At 3rd was deep-keeled Twilight (Summit) which is the gift that keeps on giving - totaling a domestic b.o. of $260 mil. and a jaw-dropping $633 mil. worldwide. Without Twilight Nov./Dec. b.o. would have been a no-show and we need a replacement(s) for it.

In 4th was The Muppets (Disney) which came in just a tad under $7 mil. Although grossing over $66 mil. thus far (grossing next to nothing in the overseas markets) and a production cost of $80 mil. - Disney is counting on strong DVD/VOD sales. In 5th came Arthur Christmas (Sony) at $6.5 mil.

Lately a trip to the cinema has become much like a visit to a rummage sale. Picking through the junk in the hopes of finding a treasure (or just a nice memento).

Margin-to-Mainstream
Unless you're taking survival lessons from Ted (Uni-bomber) Kazinski, you are probably aware of .xxx - the new Internet designation to be used by porn sites. Well, doesn't this monumental development - the removal of the last fig leaf (digitally and figuratively) - beg the question (which is at the top of all movie lovers' minds): is .xxx good or bad for the cinema?

Who Knows? Anyone for Saketinis?

Cheers and Happy Movie Going!
Jim Lavorato

GOING TO THE MOVIES - BUT WHERE?

2011-12-11T12:29:00.000-05:00

Are Concessions Too High?

Affordability should be the new mantra for cinemas. Americans are finding it harder and harder to justify a trip to the "movies" given other options on how to spend their "viewing" time and money. And cinemas aren't the only ones, cable/satellite TV subscriptions are in a downward trajectory as well (see post - "Cutting The Cord", Nov. 27, '11).

Sales in most markets is a zero sum game. So, how do cinemas give their current and potential customers a clear and compelling reason to continue their patronage? Consumers are beginning to perceive the cinema as just another "place" to view a movie - and not necessarily "the place". High admission and concession pricing, (not to mention aging buildings and infrastructure) force the perception that cinemas are "not giving best value for cost".

Most cinemas don't sell on perceived value because they haven't taken the time to define it. They don't understand it. So how could they possibly relay this to customers? They can not. When competition increases, weaker (less valued) companies lose market share and this is what is happening at U.S. cinemas.
The music industry should be a great cautionary tale for the cinema. Cinemas need to get ahead of what they will be competing against in the future. The tech Kings, such as Apple, Amazon, Google, Microsoft and many others have already entered the media and cinema industries. These tech giants are in the business of disruption and they are going to have a profound impact on the cinema.
There are essentially two ways of building a business. One is to work very hard at convincing customers to pay high margins for your product or service; the other, is to work very hard to offer customers low margins - both work. Cinemas, by their nature are in the second camp but are currently operating as though they were in the first.

A perfect illustration of this is: www.studios.amazon.com . What this represents is Amazon's new way of making movies! How it works is that Amazon crowdsources (sourcing tasks normally performed by specific individuals to a group of people (crowd) through open call) the production of a "test movie" until it reaches the point where a real studio takes over. Warner Bros. has a first-look agreement with Amazon. Whether or not this concept of movie making will fly is anyone's guess - but Amazon certainly thinks it will, and Amazon is all about low margin. More importantly, it gets Amazon's nose under the movie content tent and all of the complications this presents to the current modus operandi of the cinema industry - and the studios are powerless to stop it.

I believe anyone in the cinema industry is blind if they do not recognize the toll that higher admission and concession pricing and the disruptive nature of the digital domain is manifesting on the cinema. If you are a cinema owner/operator and are not in conversation and not sensitized to these realities in the business decisions you are making - you will probably not survive in the cinema industry of the future.
Cheers,
Jim Lavorato
Cinema/Media Consultant

GETTING AHEAD OF THE TECH CURVE

2011-12-11T10:36:00.000-05:00

CINEMA SHOULD EMBRACE MOBILE PAYMENTS

It's On The Way

The trend of consumers paying at retail site via their smartphones will really start to pick up in 2012. Discussed in prior posts (see Weekly CineBuzz - October 5th, Ten Years After - July 10th, and Moola Report - June 19th) mobile payments will become very popular.

Near-field communication (or NFC) is the technology powering mobile payments via smartphones but it will soon trickle down to other devices, and this is not just me talking. In-Stat, the top-notch media research firm, is predicting that NFC chip production "will reach 1.2 billion by 2015".

Google is using NFC for its Google Wallet mobile payment system and eBay, through its subsidiary PayPal (which at present focuses on payments via mobile apps, credit cards, and phone numbers) will also be using NFC technology in the future. In fact, virtually all mobile devices will carry the NFC chip.

Cinemas Need This Now!

Next year, you'll be seeing major retailers launching marketing programs that integrate "smart payment posters" into their in-store, web, social network, print, and out-door advertising which will feature the use of mobile payment.

Cinemas should get ahead of this technology and adopt its use NOW!

Cheers and Happy Movie Going
Jim Lavorato

WEEKLY CineBUZZ - 5 December 2011

2011-12-05T10:56:00.003-05:00

BOX TOPS

Twilight, still strong

Traffic at cinemas normally slows down the weeks before Christmas and although there were 20 (by my count) new debuts this weekend, none had wide release, providing an opportunity for current marquee names. Hugo (Paramount) and Arthur Christmas (Sony), which didn't post very well on their openings last week were given a second chance. However, it was not to be, as the weekend box office was a repeat of the last, as Twilight (Summit) took top honors for the 3rd week running with a gross of $16.9 million (it has now grossed over one-half billion worldwide) and The Muppets (Disney) came in #2 for the 2nd week in a row with $11.2 million.

Rounding out the top five were: Hugo taking in $7.6 million, this movie has been a big disappoint, Arthur Christmas (Sony) at $7.4 million, and Happy Feet Two (Warners) at $6.0 million. Besides, Twilight, the biggest grosser over the last month was Puss in Boots (Paramount) which came in 9th over the weekend. In its 6th week of release, Puss has raked in over $139 million domestically and $228 worldwide.

Even with the stellar performance of Twilight, November's box office was down year-over-year. Total domestic gross was $863 million or about 4% below 2010's performance and 13% below 2009s level - this in light of much higher admission pricing. It will become harder and harder in the U.S. to get consumers to the cinema and my rant continues regarding the re-scripting of the cinema business model.

One movie I wanted to comment on was Shame (Fox) which generated uber buzz and kudos at film fests (Fox purchased it at the Telluride Fest) and got loads of critical acclaim. Shame - a 99 minute biopic written/directed by Steve McQueen (no relation to "the" Steve McQueen) - mustered a pretty respectable $362,000 in it debut release at 10 locations over the weekend. Really very good for an NC-17 rated pic.

McQueen - whose cinema forte includes holding ultra long camera shots, giving actors free-range, and using extreme closeups - is the " nouveau" filmmaker to some cine-aficionados. Problems is, they are the only believers. Trying to gain cine-cred as the new Fellini is fine but not by being touted as such by a cadre of entertainment rags, blogs, and websters. The film should speak for itself. Showgirls, the all time high NC-17 grosser at $20.4 million, puts Shame to shame. Fact is, at its current pace Shame won't even make it into the NC-17 top 10.
Shame's premise centers around a thirty-something guy living in NYC who likes getting laid - Surprise! Yes, I know, he's suppose to be addicted to sex but that's pretty much it for the film. Anyone for The Muppets?

DISNEY BRAND NEEDS A REFRESH

Mouse Club No Longer Relevant

The Disney brand ain't what it use to be. Boomers grew up with Disney from the weekly Disney TV show and The Mouseketeers to the opening of Disney Land and Disney World complete with futurist Epcot Center - it was all part of greater America. However, younger Americans don't have that affinity and view Disney as, well, old and stodgy.

Disneys' Aulani Resort, Oahu, Hawaii

Case in point: After five years of pushing its plan to develop a stand-alone hotel/resort and retail center Disney, last week, announced it has scrapped plans on the Disney-branded Potomac River complex near Washington, DC. This, coming on the heels of Disney's newly constructed hotel/timeshare in Oahu - The Aulani - which opened in August at a cost of $850 million and ran into some unintended financial miscalculations. It seems Disney management underestimated the operating costs of the resort and will now be forced to subsidize early time-share buyers for the next 50 years.

In addition to the Hawaiian fiasco, two new cruise ships and park expansions have ballooned Disney's capital budget to over $3 billion for 2012, so putting the kibosh on the Washington project was necessary.

Disney to build Avatar Lands

And other deals are coming up. The main one being the Shanghai - Disney Land project which carries a price tag of $4.4 billion. Also Disney recently acquired the theme park rights to the Avatar film franchise. As party to that deal, Disney is required to build Avatar-themed "lands" at multiple parks around the world - beginning with a $500 million investment at the Animal Kingdom in Walt Disney World, Florida.
Disney can no longer rely on it brand for instant success, especially as it expands away from its core businesses of movie making and theme parks. The Disney brand needs a refresh but that takes investment in innovative projects that were the initial spark that made Disney so special. Investing in commonplace upscale stand-alone resort hotels is not the answer and I think Disney management knows this - at least now they do.

FEDS BUST PIRATE WEBSITES

Millions of Chinese work in pirated media trade

On Cyber Monday, Federal ICE & FBI agents seized the domain names and shutdown 150 websites selling counterfeit products and pirated movies & TV shows. Although registered in the U.S. the bogus websites were being managed from abroad - primarily from China. Although impossible to prosecute most offenders, five people in Virginia were arrested and indicted.
Constant vigilance is required as these bogus sites siphon off revenue and jobs from the movie industry.

Cheers and Happy Movie Going!
Jim Lavorato

ADS JUST FOR YOU - Customized Commercials

2011-12-04T10:23:00.000-05:00

GETTING YOU TO WATCH COMMERCIALS

Sitting in a movie theatre yesterday and watching the pre-feature ads -which I had seen before and pretty much mentally blocked out - begs an answer to the age old issue of how to get viewers to watch ads?

Problem: Viewers hate commercials.

Solution: Let viewers choose the ads they watch.

Can we pretty much agree that viewers hate commercials. Yet the business models of broadcasters and webcasters alike depend on ad revenue for their
very being. However, this is about to change!

Both Hulu and YouTube are experimenting with formats that give users the option of clicking an "ad swap button" and replacing the commercial they are watching. Not only swapping but once the webcasters get enough profile data on which ads a viewer likes they will be given choices that are of interest to them.

Icons on a Hulu screen allow for "ad swapping"

On the flip side, advertisers will have options as well. For example, giving viewers a choice at the beginning of a show to endure 2-3 minutes of ads and then be ad free. Another format offers the option of playing a trivia quiz or puzzle, sponsored by the advertiser, in order to earn a commercial-free viewing.

YouTube offers "skippable ads", where users are allowed to end the ad after five seconds, and no replacement follows, the program simply resumes. Under this format, the advertiser is charged only when users have chosen to watch the ad. Advertisers like this, as they are assured that viewers who stuck around to watch the ad did so by choice.

Related "ad swap" options from a single company

Of course, webcasters have the option of going ad-free and turning to a subscription based model. Hmmm, isn't that what the cable companies promised back in the eighties.

Whichever model is used, I am sure that individualized advertising will be in all of our futures. Collecting data on what we purchase, where, and how and customizing ads around our "digital' profile is inevitable.

Best & Happy Shopping
Jim Lavorato

WEEKLY CineBUZZ - 28 November 2011 (Revised)

2011-11-28T17:01:00.003-05:00

Twilight's Stewart & Greene

GOBBLE! GOBBLE! GOBBLE!

Although they get a A for effort, the kiddie pics couldn't unseat Twilight from the head of the Thanksgiving table. Nonetheless, there were no turkeys at the box office over the 5 day extended holiday weekend.

Twilight Breaking Dawn - Part 1(Summit) ended its second week with a total box office gross of $61 million. It has now amassed $221 million domestically and $268 million internationally, not too shabby for a film with a $110 million production cost.
The Twilight saga is on warp speed to reach a franchise total $3 billion. It will easily score another $1-2 billion in ancillary product and down-stream presentations - and there is still another installment (BD-Part 2) in the hopper for 2012.

The current cinema marquee boasts a cadre of good pics for all ages. In addition to The Muppets (Disney), which grossed $41.5 million and took 2nd place to Twilight, and should have good legs throughout the pre-X-Mas period. Happy Feet Two (Warners) in its second week, took 3rd and grossed $18.4 million. Arthur Christmas (Sony) came in 4th and grossed a rather disappointing $16.3 million. 5th place went to newbie Hugo (Paramount) at $15.4 million.
The U.S. cinema has now grossed a YTD total of $9.1 billion with 1.14 billion admissions. This is in line with 2010's performance.
Sneaks - Do They Work?

War Horse Should Do Well

We Bought The Zoo (Fox) had a sneak preview over the weekend to mixed results but it may help when it debuts on 12/23 against some stiff competition: War Horse (Dreamworks), Alvin & The Chipmonks-ChipWrecked (Fox), and The Adventures of TinTin (Paramount) 3 good family flix. We'll wait and see how the Zoo makes out.

Sequels - We Love Them!

Sherlock Holmes #2 out 12/16

Hollywood is all about risk management. And to decrease risk sequels are the way to go. One good pic deserves a follow-up and if possible a 3rd, 4th, and more - until moviegoers tire of the premise.Some sequels are serial, ie. Harry Potter or Twilight, others are new stories with the same characters, like Mission Impossible (the 4th MI film to debut shortly) or Sherlock Holmes (in its 2nd plot). Either way sequels make sense for the studios - as they limit risk in a very risky business.

Cheers.
Jim Lavorato

CUTTING THE CORD

2011-11-27T14:11:00.002-05:00

Termed Cord Cutters, young adults have no intention of becoming $1000+ a year consumers (like their parents) of conventional cable or satellite TV subscriptions.

In conversation, DISH Network CEO, Charlie Ergen, stated that, "Young people who move into an apartment or starter home do not subscribe to any cable or satellite service. They get their video over-the-top and their network programs from Hulu, Netflix, Roku, or Amazon. Instead of paying $70-120, or more, per month they get it free or pay $7.99 per month from Netflix or $79 per year from Amazon.This is a long-term macro trend that is a threat to our industry." Charlie you couldn't have said it any better.

Top 10 Cable Alternatives

Reuters even reported on a "Cord Cutting Holiday Gift Guide" - check it out at www.reuters.com .
The coming cinema-TV-internet connection is going to be really messy but it is inevitable and unstoppable.

Cheers, Jim Lavorato

GOOGLE GOES HOLLYWOOD

2011-11-27T13:40:00.000-05:00

Reported in a recent CMG post - "Disney & Google Team UP", 11/9/11 - Google has earmarked an "initial" $100 million as an incentive pool for storytellers and producers to submit original content which would fuel YouTube and Google's developing on-line TV channels.

Google wants to work directly with celebrities and Hollywood producers as it launches its on-line cable network and Google TV. YouTube (owned by Google) has 96 shows currently in the works for its foray into webTV - from sports to pre-school childrens' fare.

My guess is that Apple, Amazon, Microsoft and others won't be far behind. What these tech Kings are doing is training a mobile and global audience to consume premium content on smartphones, tablets, and ultrabooks, in addition to TVs and feeding this growing appetite with millions of views - from feature films to homemade videos.

Cinema owners/operators must be aware of these trends and set so work on adopting, need I say it again, the 5 cinema essentials: Value, Convenience, Quality, Participation, and Experience.

Cheers & Happy Movie Going!
Jim Lavorato