No question about it, the pandemic hit movie theaters hard. As theater owners assemble this week for their annual convention CinemaCon in Las Vegas, after a year of cancellations all around, they are licking their wounds and repeating familiar mantras about the sanctity of the theatrical experience. Rather then tout the year’s record-breaking box office achievements as in past years (because there were none to be had this time around), when NATO chief John Fithian and MPA chairman Charles Rivkin on Tuesday morning gave their usual speeches at the Colosseum at Caesars Palace to a masked crowd, both men were rallying the troops, weary from fighting in the trenches.
“We have been through one of the worst years that the global economy — and our industry in particular — has had in a generation,” said Rivkin. “Few took this harder than theater owners and their employees, across the United States and around the world. Theaters completely shuttered. Employees let go. Hundreds of thousands of people have lost their jobs or were furloughed. More than 96 percent of independently owned and mid-sized theaters lost 70 percent of their income. And just when things seemed to be coming back, and talk of recovery was everywhere, the Delta variant came in, making everyone fear once again for their health and their economic security.”
And clearly, the industry has solidified around key talking points and targets. While the theater owners come to terms with permanently shortened ancillary windows, enemy number one is now day-and-date releasing. “Exclusive release periods remain vital to the survival and success of the theatrical experience,” said Fithian. “Theatrical windows won’t be what they were before, but they can’t be what they were during the pandemic either. What the future holds is up to our members and distributors to decide, but let us be clear about one thing: simultaneous release DOES. NOT. WORK. For anyone. A steady flow of strong movies released with exclusive windows is essential to exhibition’s recovery, and to the profitability of the entire movie ecosystem.”
Enemy number two is piracy. “The data shows us that in the pre-release period of a movie, piracy reduces box-office revenue by more than 19 percent,” said Rivkin, while hailing the success of a handful of recent movies, from Warner Bros.’ “Godzilla vs. Kong,” which “was the first to cross the $100 million mark in the U.S.,” to Paramount’s “A Quiet Place Part II” and Disney’s “Cruella.” “And ‘A Quiet Place Part II’ has now passed the $160 million mark. Universal Picture’s ‘F9: The Fast Saga’ put its pedal to the metal with a $70 million opening weekend in North America, the best since ‘Star Wars: The Rise of Skywalker’ in 2019. It’s now grossed more than $172 million — (and that’s just domestic). And only 3 weeks after ‘F9’ debuted, Disney’s ‘Black Widow’ had an $80 million opening, and now it’s closing in on $180 million.”
And the pandemic-fueled rise of streaming is not necessarily the enemy, said Rivkin: “Recent studies have confirmed that streaming and moviegoing are not zero sum. They are not in competition. Rather, as studies show, consumers consider them to be part of a shared spectrum of entertainment. NATO’s new Ernst & Young report for 2020 proved — yet again — that movie buffs are both going to the movies and consuming streaming content. As another study finds, consumers consider a theatrical opening to be the stamp of quality. If a film has been released in the theaters, they know it has ‘pedigree’. Well clearly, the box office numbers that we’ve been seeing lately show that audiences don’t want to wait at home. They want to enjoy that ‘pedigree’ right now. In some ways, it can be said that we are living in a new ‘golden age of content’. Because never before have we had the choice of so many rich and diverse stories across multiple platforms. And yet, there is nothing that grabs the attention for such a sustained period of time as the theatrical experience.”
An AMC location in NYC
STRF/STAR MAX/IPx
Both men described the ways that movie theaters remain vital to local communities, both economically and emotionally. “We are the industry that drives economic growth across our country,” said Rivkin. “We are the industry that brings 2.5 million jobs to men and women in all 50 states, across a diversity of skills and trades. We are the industry that pays out more than $188 billion to American workers every year. That comprises more than 93,000 American businesses (most of which have fewer than 10 people). We employ more than 741,000 people across the entire country, including over 150,000 ushers, ticket takers and concession workers in our movie theaters. We are the industry that drives one of America’s greatest exports. $16 billion in export revenue, and a positive balance of trade with nearly every country on the planet.”
“Cinemas are a vital part of the small towns and big cities in which they are located,” Fithian said. “The foot traffic movie theaters create will help surrounding businesses recover from COVID-19. According to an Ernst and Young study that NATO released last week, in addition to the $18.3 billion in direct movie theater revenue, movie-night spending on other businesses here in the U.S. amounted to $5 billion in 2019 before the pandemic hit. We will return to that level again.”
Rivkin exhorted the theater owners to get up and fight, with comeback movies to inspire them: “Ladies and gentlemen, for more than a hundred years, we have built one of the most successful and iconic industries in human history. And together, we will build an even greater one in the century to come. As movie lovers, I’m sure you’ll agree that we can all appreciate a great comeback story. Think of Rocky Balboa going the distance. Think of every superhero in the Marvel Cinematic Universe. Always fighting to regain their lost superpowers so they can save the world.”
That rah-rah return to normalcy is unlikely to be fulfilled, as shopping malls that house theaters are among the pandemic distressed, weaker theaters are closing, and while the industry may remain vital, theaters will have a smaller footprint and are unlikely to regain past revenue markers. Tellingly, following an era when once-mighty theater chains like AMC and Regal brought faceless corporate consolidation to the theater industry, Fithian and Rivkin are preaching a return to a local footprint, as individual theaters reach out to their own constituencies. That can only be a good thing.
The full text of both speeches are below.
“We have been through one of the worst years that the global economy — and our industry in particular — has had in a generation,” said Rivkin. “Few took this harder than theater owners and their employees, across the United States and around the world. Theaters completely shuttered. Employees let go. Hundreds of thousands of people have lost their jobs or were furloughed. More than 96 percent of independently owned and mid-sized theaters lost 70 percent of their income. And just when things seemed to be coming back, and talk of recovery was everywhere, the Delta variant came in, making everyone fear once again for their health and their economic security.”
And clearly, the industry has solidified around key talking points and targets. While the theater owners come to terms with permanently shortened ancillary windows, enemy number one is now day-and-date releasing. “Exclusive release periods remain vital to the survival and success of the theatrical experience,” said Fithian. “Theatrical windows won’t be what they were before, but they can’t be what they were during the pandemic either. What the future holds is up to our members and distributors to decide, but let us be clear about one thing: simultaneous release DOES. NOT. WORK. For anyone. A steady flow of strong movies released with exclusive windows is essential to exhibition’s recovery, and to the profitability of the entire movie ecosystem.”
Enemy number two is piracy. “The data shows us that in the pre-release period of a movie, piracy reduces box-office revenue by more than 19 percent,” said Rivkin, while hailing the success of a handful of recent movies, from Warner Bros.’ “Godzilla vs. Kong,” which “was the first to cross the $100 million mark in the U.S.,” to Paramount’s “A Quiet Place Part II” and Disney’s “Cruella.” “And ‘A Quiet Place Part II’ has now passed the $160 million mark. Universal Picture’s ‘F9: The Fast Saga’ put its pedal to the metal with a $70 million opening weekend in North America, the best since ‘Star Wars: The Rise of Skywalker’ in 2019. It’s now grossed more than $172 million — (and that’s just domestic). And only 3 weeks after ‘F9’ debuted, Disney’s ‘Black Widow’ had an $80 million opening, and now it’s closing in on $180 million.”
And the pandemic-fueled rise of streaming is not necessarily the enemy, said Rivkin: “Recent studies have confirmed that streaming and moviegoing are not zero sum. They are not in competition. Rather, as studies show, consumers consider them to be part of a shared spectrum of entertainment. NATO’s new Ernst & Young report for 2020 proved — yet again — that movie buffs are both going to the movies and consuming streaming content. As another study finds, consumers consider a theatrical opening to be the stamp of quality. If a film has been released in the theaters, they know it has ‘pedigree’. Well clearly, the box office numbers that we’ve been seeing lately show that audiences don’t want to wait at home. They want to enjoy that ‘pedigree’ right now. In some ways, it can be said that we are living in a new ‘golden age of content’. Because never before have we had the choice of so many rich and diverse stories across multiple platforms. And yet, there is nothing that grabs the attention for such a sustained period of time as the theatrical experience.”
An AMC location in NYC
STRF/STAR MAX/IPx
Both men described the ways that movie theaters remain vital to local communities, both economically and emotionally. “We are the industry that drives economic growth across our country,” said Rivkin. “We are the industry that brings 2.5 million jobs to men and women in all 50 states, across a diversity of skills and trades. We are the industry that pays out more than $188 billion to American workers every year. That comprises more than 93,000 American businesses (most of which have fewer than 10 people). We employ more than 741,000 people across the entire country, including over 150,000 ushers, ticket takers and concession workers in our movie theaters. We are the industry that drives one of America’s greatest exports. $16 billion in export revenue, and a positive balance of trade with nearly every country on the planet.”
“Cinemas are a vital part of the small towns and big cities in which they are located,” Fithian said. “The foot traffic movie theaters create will help surrounding businesses recover from COVID-19. According to an Ernst and Young study that NATO released last week, in addition to the $18.3 billion in direct movie theater revenue, movie-night spending on other businesses here in the U.S. amounted to $5 billion in 2019 before the pandemic hit. We will return to that level again.”
Rivkin exhorted the theater owners to get up and fight, with comeback movies to inspire them: “Ladies and gentlemen, for more than a hundred years, we have built one of the most successful and iconic industries in human history. And together, we will build an even greater one in the century to come. As movie lovers, I’m sure you’ll agree that we can all appreciate a great comeback story. Think of Rocky Balboa going the distance. Think of every superhero in the Marvel Cinematic Universe. Always fighting to regain their lost superpowers so they can save the world.”
That rah-rah return to normalcy is unlikely to be fulfilled, as shopping malls that house theaters are among the pandemic distressed, weaker theaters are closing, and while the industry may remain vital, theaters will have a smaller footprint and are unlikely to regain past revenue markers. Tellingly, following an era when once-mighty theater chains like AMC and Regal brought faceless corporate consolidation to the theater industry, Fithian and Rivkin are preaching a return to a local footprint, as individual theaters reach out to their own constituencies. That can only be a good thing.
The full text of both speeches are below.