CinemaCon: Theater Chief John Fithian Says Movie Biz Doesn't Need Saving

John Fithian_Cinemacon - Getty - H 2018
Ethan Miller/Getty Images for CinemaCon

"The movie industry is not a zero-sum game," Fithian said in his annual state-of-the-industry speech in Las Vegas, where new MPAA chief Charles Rivkin made his first CinemaCon appearance.

National Association of Theatre Owners president John Fithian didn't mention the controversial movie subscription service MoviePass by name Tuesday in his CinemaCon speech, but was quick to stress that the film business doesn't need to be saved.

"There has been a lot of hype about the next 'disruption.' VHS. DVD. Streaming. Shortened windows. PVOD. Subscriptions and simultaneous release. Yet we never die but remain a strong business in the face of disruption everywhere else in the entertainment landscape," Fithian told the gathering of theater owners and Hollywood studios in Las Vegas.

"I have worked with NATO members for 26 years. I can’t begin to tell you how often reporters have asked me if the movie theater industry is dying. Every downturn in admissions is a sign of secular decline, every innovation or improvement is intended to 'save' the movie theater business," he said, according to prepared remarks.

Last year, MoviePass lowered its monthly subscription price to $9.95 in an offering that allows patrons to see one movie per day. A more recent plan lowered the price to $6.95. (MoviePass must pay theater owners the difference.)

An exclusive poll conducted by NRG for The Hollywood Reporter found that MoviePass is dramatically changing moviegoing habits. Whether it's economically viable is another matter.

While MoviePass is new to the CinemaCon scene in terms of being a topic of discussion, theatrical windows are a perennial issue that was once again addressed by Fithian during his speech.

Fithian said NATO recently conducted a study with Ernst & Young of more than 1,400 people who watched at least one movie in a theater in 2017 and spent one hour per week on streaming services. The study found that 33 percent of moviegoers who see nine or more movies per year — twice the national average — also spend 15 or more hours per week on streaming platforms.

"People who consume a lot of content do so across multiple platforms. A robust theatrical release helps a movie stand out among myriad choices on digital platforms. The movie industry is not a zero-sum game. The more movie lovers we can create, the better off we all are. And it starts with movie theaters," Fithian said. "The idea that younger adults aren’t passionate moviegoers is a myth."

According to data from comScore, NATO’s official data partner, moviegoers age 18-44 constituted 63 percent of the total box office in 2017, up from 61 percent in 2016.

Fithian also referenced the gains made in terms of diversity in front and behind the camera, pointing to the stunning success of Disney and Marvel's Black Panther.

"We also applaud content creators and distributors — both large and small — for taking significant steps to achieve more diversity and positive representation on the big screen. Our customers are demanding it, and we are optimistic that 2017 and 2018 will one day be viewed as a turning point on this front," he said. "Would Black Panther, Get Out, Wonder Woman or any other major recent hits have become significant cultural landmarks if they went straight to streaming? Of course not. Their impact is a direct result of people experiencing them in a communal way."

Further, Fithian praised Sony's CinemaCon presentation on Monday night for featuring a number of films showcasing a diverse cast.

Following his remarks, Fithian introduced Motion Picture Association of America chairman-CEO Charles Rivkin to deliver the convention's keynote speech. It was Rivkin's first CinemaCon speech after replacing Chris Dodd as Hollywood's top lobbyist last fall.

Rivkin ran through his résumé, which included stints at the Jim Henson Company and animation house Wildbrain before serving as U.S. Ambassador to France for former President Barack Obama. He later worked as Assistant Secretary of State for Economic and Business Affairs.

Rivkin also touted the strength of the movie ratings system, which is administered by the MPAA and NATO. "This year we mark 50 years of the Classification and Rating Administration — or CARA, the voluntary MPAA movie ratings. Of course, Jack [Valenti] founded the rating system. And thanks to his vision, we have built a foundation of trust between parents and our industry over half a century."

Earlier this year, President Donald Trump mentioned the ratings system in reference to media violence following the tragic Parkland, Florida, school shooting. He never explained his comments. Rather, he followed up by convening a White House session on the impact of video games.

Fithian and Rivkin touted the strength of the global box office, where revenue hit a record $40.6 billion in 2017 despite a downturn in North America. Domestic revenue came in at $11.1 billion, down 2.5 percent from 2016's record $11.4 billion. And attendance hit a 22-year low. Foreign revenue climbed to $29.5 billion, an uptick of 7 percent thanks mainly to the China box office, which, at $7.9 billion, was up nearly 20 percent.

"That is pretty remarkable when you consider how large, diverse and mature this market is. I believe we will always be moving between record high or near-record high years," Rivkin said. "2018 is off to an even better start, thanks in large part to the leaps and bounds of a certain Black Panther. More than just the highest-grossing superhero film of all time, this movie has redefined a genre, marked a turning point in our cultural history and opened doors to artists and audiences everywhere. And there is so much more to come in 2018."

"Global growth will continue both in existing markets and new ones," Fithian said earlier. "In an historic decision for NATO and our members, Saudi Arabia will allow movie theaters after an absence of nearly four decades. Congratulations to our largest member, AMC, for opening the first Saudi cinema last week.The Saudi market could reach $1 billion in box office in a few years."

Continued Fithian: "The point here is simple: Our business rises or falls on the movies in our cinemas. It doesn’t stand to reason that moviegoing habits have permanently changed based on the performance of any given movie, weekend, month or quarter. North America remains the biggest market in the world. It accounts for roughly 30 percent of global revenue from only 5 percent of the population."

Fithian's speech was preceded by a shout-out to Disney for its stellar box-office run. And with Disney and Marvel's Avengers: Infinity War set to kick off the summer box office on Friday in a major way, the NATO chief noted that some analysts are predicting an 18 to 20 percent uptick in domestic box-office revenue in the second quarter (April-June).

"Advanced ticket sales for Avengers: Infinity War, which opens in only three days, are beyond anything we have seen before. And the remainder of the summer slate looks just as impressive," added Fithian.

"The word 'disruption' is thrown around way too much. Nothing needs to be disrupted when it comes to the basic goal of our industry: bringing people together to share a communal experience," Fithian asserted. "But that doesn’t mean exhibitors won’t innovate. From new heights in sight and sound, to enhanced food and beverage options, to luxury seating and beyond, our members are dramatically enhancing the experience."

April 24, 10 a.m. Updated with Rivkin's comments.