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NEW YORK – The 3D film business, the debate over who should pay for 3D glasses, the upcoming theatrical release of Hunger Games and the strong box office trends early in 2012 were among the topics of debate at an investor conference here on Thursday.
Regal Entertainment Group CEO Amy Miles highlighted the “great start to the year” at the Gabelli & Co. fourth annual Movie & Broadcasting Conference.
To accommodate the expected appetite for Hunger Games, she said the company will look to show the film on more screens. About 11-12 screens of a 17-screen theater could show the movie to avoid losing consumers who come out for it, she said.
Sony has said that it won’t pay for 3D glasses anymore, causing some conflict with theater operators. Asked if Regal is ready to pay for them, Miles said: “No, we are not.” But she said the company is “open to any change in the business model that doesn’t increase the cost to our customers or our company.” She didn’t go into further specifics, but said Regal could help with the 3D glass provision process.
Meanwhile, Michael Lewis, CEO of 3D technology firm RealD, told the Gabelli conference that his firm sells glasses to exhibitors internationally, while they are paid for by studios in the U.S. “I expect that his will be figured out,” he said about the issue of who will pay in the future as raised by Sony. “We are delighted to facilitate whichever way they go.”
Lewis said that U.S. 3D film revenue has typically been in the 40 percent-60 percent range, but has recently come in at the high end of that range. He lauded improved spacing of films and the overall quality of films, both in terms of presentation and filmmakers’ understanding of how to use the medium effectively. “Hugo is an example of raising the bar significantly,” he said. “Hugo has taken it to another level.”
Overall, he said that things look good for 3D, that he expects a “very good” summer, and he predicted there would be some additions to what are currently about 35 films in 3D announced for 2012.
Asked about possible alternative 3D content in digital cinemas and whether the Super Bowl could end up in 3D theaters soon, Lewis said RealD has done a number of tests with the NFL over the years, but he didn’t predict specific moves. “More and more, sports is a driver,” he said. “There are a lot of opportunities.”
Imax CEO Rich Gelfond also highlighted that the film industry has recently seen product that has been better. And he said even when product isn’t doing well, Imax tends to get a big share of the theatrical revenue. For example, he said that Imax got about 17 percent of the John Carter box office, even though the movie underperformed.
What has worked out well for Imax has been a focus on around 20 U.S. releases a year. Pointing to Mission: Impossible – Ghost Protocol, which he said played well for an extended period of time, Gelfond said: “Let it breathe…I don’t want to make it too crowded.”
The Imax CEO also said his company plans to launch a promotional campaign soon that will mostly run online and will use the tagline: “Imax is believing,” a play on the saying “Seeing is believing.” The goal is to highlight that Imax takes audiences closer to the action, or into the action, and is more of a first-person experience, he said.
Greg Marcus, CEO of Marcus Corp., was one of the executives who also highlighted the longer-term challenges for movie theater operators. Saying that there has been a decline in movie theater attendance over the past decade or so, he said a recent negative trend has been that more consumers have sat out middle-market films, because there seems to be “something else to watch or do at home.
Discussing the relationship of exhibitors with studios following last year’s premium VOD showdown, Marcus said “it has become a more cooperative” model. But he said it worries him when studios want to grow the DVD business again after declines in recent years, arguing that the business has changed, or change windows in a way that affects the theatrical window. “As you shrink windows, you move people into other markets,” Marcus said, speaking of the risk of irreparable harm. “If they want to have a theater business, we have to be able to earn a return on investment.”
Meanwhile, Carmike CEO David Passman highlighted how his company has used smart marketing and packaging to grow its business. A “Super Stimulus Tuesdays” it started in 2009 amid the recession made Tuesday the most-attended weekday, and it is to this day, he said. The promotion offers 16-ounce sodas and 46-ounce servings of popcorn for $1 each. The offer has not cannibalized attendance on any other days, Passman said.
NATO CEO John Fithian had opened the conference, predicting “substantial” 2012 box office and attendance growth and saying that after last year’s public “food fight” over premium VOD releases, studios and exhibitors have held private talks about how to grow the business together.
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