CinemaCon: Uni's Adam Fogelson Warns that Studios, Exhibitors Will 'Suffer' Without New Model

Adam Fogelson Headshot - P 2011
Kevin Winter/Getty Images

Adam Fogelson Headshot - P 2011

On “Fifty Shades of Grey,” Michael De Luca says, “Cinematic language doesn't have to be explicit.”

LAS VEGAS -- Addressing the thorny issue of windows, Universal chairman Adam Fogelson warned studios and exhibitors that "we are all going to suffer" if new revenue models aren't agreed upon.

“If both don't take responsibility and open their mind to find new ways [of working], we are all going to suffer as a consequence,” Fogelson said during a panel at CinemaCon, the annual gathering of theater owners.

During the session, speakers took aim at getting past the impasse regarding windows, yet there were more questions than answers.

Carmike Cinemas president and CEO David Passman asserted that it’s not about adjusting the current model, but creating an “entirely new” one. “If we could sit the top 10 exhibitors and seven studios for a workshop, we could create a new model that would work for everyone. But that is difficult to do.”

Fogelson said he hopes that there is wiggle room in this discussion restating the “business realities” that studios are facing. “The studios are losing billions because the DVD market has declined and being replaced by a [less profitable] option. To have the money we need to make enough movies [to keep theaters full], we need to generate a proper return on investment.”

“I don’t have answers,” he admitted, saying options are being studied that started with the belief that “there’s a price point for people who aren't going to go to theaters, and could we can find a delivery method to get that piece of the pie without disincentivizing patrons to go movies.

“If we don't experiment, we have a business problem that will affect all of us,” he asserted. “We are completely open to other ideas. … I hope we will find a mutually safe way to give consumers what they want.”

He admitted, “I don't think all studios are necessarily doing their part … to make everyone feel safe.”

Fogelson urged theater owners to have confidence that “people love movies” and try to get past a “fear that people would rather stay home.”

“People who go to movies also buy the most DVDs,” Fogelson asserted, adding that there are examples that suggest that both can be successful.

He pointed to NBC’s multiplatform coverage of the London Olympics -- which had unprecedented viewership -- as an example of how platforms can co-exist with success. He noted that the network offered Olympic events live for connected devices, thought it had a huge stake in its produced primetime TV programming with advertising -- they were two different experiences. “A lot of people watched live,” he said, “and even more people watched in primetime.”

Passman emphasized that the issue for exhibitors is different for first-run movies compared with 3D re-releases. “[First run films are] about telling a story,” he said. “For a re-release, the general premise is, you are not showing a new story; it is a new experience. On the argument that a re-release is the same as new release, there is not enough evidence to convince the exhibitors that day and date works.”

Echoing NATO president and CEO John Fithian’s conference remarks, Passman also urged studios to create more family fare. “For Q1 this year, I hear across NATO that there were too many R-rated movies, not enough family films. … We are prone to blaming the [content provider].”

“I think it is about the movies,” Fogelson argued, pointing out that Identity Theft was successful during the quarter, and that he would expect Ted would have done well no matter when it was released.

On the subject of adult movies, panelist Michael De Luca addressed his planned film based on E.L. James’ best-seller Fifty Shades of Grey. Reminding the crowd “that the movie will be different from the book,” the producer said, “The book is literal by design. … The cinematic language doesn’t have to be explicit.”