Boxoffice Pro LIVE Sessions: NATO’s John Fithian on the State of the Cinema Industry During the COVID-19 Crisis

In the first edition of our LIVE Sessions webinars, Boxoffice Pro hosted National Association of Theatre Owners (NATO) president & CEO John Fithian and chief communications officer Patrick Corcoran. On April 3, Boxoffice Pro executive director Daniel Loría and deputy editor Rebecca Pahle moderated the live webinar, with over 600 attendees tuning in from 30 different countries, in a conversation that covered the state of theatrical exhibition during the COVID-19 crisis.

The discussion opened with NATO providing insights on its three top priorities during the crisis: providing economic assistance to affected cinema workers through government and private funds, keeping exhibitors afloat and viable by lobbying for liquidity sources during this pause, and keeping the public safe by following the guidelines and recommendations of local agencies in regards to business operations. 

Of those three priorities, Fithian highlighted the importance of protecting cinema workers through public and private fundraising efforts. “We are encouraging governments to help the workers by compensating for their lost wages,” he says. “We live in a business that is mainly hourly employees. Unlike big businesses with salaried employees, we’re a place where first workers come to get their first job. First and foremost, we are trying to help cover our workers so that they can pay their rent and can have groceries during the interim.” 

Fithian notes that liquidity is crucial for companies to stay afloat during this crisis and to welcome their workers back as quickly as possible. “We have to have liquidity for our members to weather the storm,” he says. “They have ongoing fixed costs and no income coming in. The various loan programs being established in the United States, the various government subsidies and tax breaks that are happening around the world, are intended to get our members to the other side of this storm.” 

The president and CEO of NATO stressed the importance of the industry working together during this difficult period, noting the voluntary closure of many cinemas before they were legally mandated to suspend operations. “We’re trying to do our part to keep everybody safe,” says Fithian. “We shut down all of our cinemas very, very quickly. We’re working with all of our governments as they support the healthcare efforts, because the faster we can get through this crisis, the faster we can get back up and running.”

NATO is hoping for theaters to begin reopening in June. That would mean a two to two-and-a-half month shutdown of the theatrical exhibition industry in the United States, depending on how effective current containment measures are in slowing down the spread of the virus. NATO’s chief communications officer, Patrick Corcoran, notes that timeframe could change. “It depends on how the situation changes and if the curve bends downward on this pandemic. We’re looking at possibly being open at the end of May, early June, in a limited way. Then ramping up to major releases, if that’s possible, in July.”

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The reopening strategy will be inspired by efforts from different countries around the world, as each country is at a different stage in dealing with the crisis. “The lessons are very similar, the timelines are very different,” says Fithian. “China shut down in January and Western Europe and North America didn’t shut down until mid-March, so we’re learning from each other. We’re comparing notes on how long the virus takes, on what you do to ramp back up once the virus has gone, what kind of film programming we can have when we get back up and running.”

What that reopening campaign could look like depends largely on the guidance of health officials. NATO is consulting with the Center for Disease Control as well as local health departments in the United States on issues like social distancing, cleanliness, and sick employees staying home. “Whether we open back up location-by-location, region-by-region, nation-by-nation remains to be seen, depending on what the health officials say is the cessation of the threat,” says Fithian.

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“Everyone should stay in touch with their local health officials first and foremost about their recommendations and then prepare to ramp back up in steps. We anticipate that when we first open cinemas anywhere in the world we’ll have social distancing elements involved. The 50 percent seating capacity issue is one way to address that so that people have a chance to come to the cinema but have some space between themselves. Obviously, we’ll return to very intense cleaning procedures and anything else that health officials recommend, so that when we’re opening back up people know that we are careful with their health as they come to our cinemas.”

In an audience poll conducted during the webinar, a majority of attendees highlighted the importance of a coordinated, industry-wide marketing campaign to encourage a return to cinemas as their most desired initiative in the coming months.

B&B Theatres executive vice president Bobbie Bagby Ford joined the conversation by emphasizing the importance of an industry-wide recovery effort to get audiences comfortable to return to cinemas. “It’s important that we all get our heads around that messaging so we have a united front,” she says, suggesting incorporating a social media hashtag once cinemas are ready to reopen. “All of us are in this industry for a reason, and if we can find a way to be united and jump forward with that messaging, it’s vitally important. It can be that sweet spot in American and in worldwide culture about how it’s time to be together. You’ve been alone, you’ve been quarantined: now let’s get out and enjoy our communities and our movie theaters.”

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Another major concern is content availability, particularly when it comes to the theatrical exclusivity window. With some studios moving titles whose theatrical runs were curtailed by the onset of the crisis to digital outlets, exhibitors are worried more titles might forgo a theatrical release entirely in favor of a straight-to-streaming launch. Fithian, however, believes most studios and distributors will abide by their original theatrical commitments for future films. “The model is not broken. The model is simply on hold,” he says.

A related problem is the availability of release dates as titles get pushed further down the schedule. This could potentially create a bottleneck for titles and crowd the marketplace. Fithian doesn’t believe this will be the case, as the impact of COVID-19 is also affecting production schedules: titles originally slated for release in 2021 will likely get bumped to later dates until production can resume. “I’m very confident that for most distributors, almost all their movies are going to be postponed for a later theatrical release where they’ll have an adequate and robust theatrical window,” says Fithian.

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Ultimately, once cinemas are deemed safe to reopen, NATO is confident audience demand will be there to welcome the return to business. “My family is watching a lot of content at home right now, just like everybody else’s. That’s the only place where you can get entertainment as people are following the right steps to stay home, stay safe, and to reduce the spread of the virus,” says Fithian. “All that means is they still love movies and they still love content. It’s good to keep people connected to that content while they’re stuck in their homes, because once they’re out they will want to come back [to cinemas]. We strongly believe there will be a rush to cinemas to see all kinds of movies, just as people will want to reconnect with their friends and family through social experiences.”