On this week’s episode of The Boxoffice Podcast, Boxoffice Pro editorial director Daniel Loria talks to Fathom Events CEO Ray Nutt on the company’s record-setting month of September and its upcoming release slate for the holiday season. Listen to their full conversation in the link below.
Coming out of the pandemic, how is the event cinema sector doing as a whole, and how is Fathom Events doing in relation to that macro picture?
[September 2022] was our strongest September ever, and it was the second-biggest month that we’ve had in the 17 years that Fathom has been in existence. It was a great time for it to happen. Commercial product wasn’t really strong during that time, [and] we were happy to bring an inventory of great content to the table—and exhibition really welcomed us with open arms.
Macro-wise, I think event cinema is coming into its own. Event cinema started off as a Monday through Thursday business with one or two playdates. A one-or-two showtimes type of thing. It has really evolved coming out of the pandemic. During that time we had an acronym here at Fathom, HOPE. H, for the health of our employees, was first and foremost for us. O, for optimism, and the need to stay positive. P for persistence, for our need to continue delivering to our clients on a constant basis. Finally, E for Excel, and that’s where we are right now as we come out of the pandemic. We’re probably just above double our 2021 revenue for this year. We’re going to finish the year very strongly. 2022 is going to be a great year for us. Compared to 2019, we’ll probably end up somewhere between 70 and 75 percent of those numbers.
Part of that recovery is innovating, doing things differently than we were before. Fathom, for example, is now distributing event cinema programming internationally for the first time. It’s a big step for the company to go out into a very competitive international market for event cinema.
Fathom has traditionally been a leader in the domestic distribution of event cinema content, and I think you have to look at growth opportunities. We sat down as a leadership team, knowing we were doing a really good job domestically, and looked at what other opportunities were out there for us. Of course, international surfaced first and foremost. AMC, Cinemark, and Regal are our owners, and they have international assets as exhibitors.
Coming from a competitive standpoint—when you’re looking at acquiring content, in this day and time, the world is getting smaller and smaller. In order to acquire content, you have to be competitive in the international market. We’re taking titles like The Chosen to several English-speaking countries—U.K., Canada, Australia and New Zealand—to dip our toe in the water. You have to be very smart about acquiring content and getting the international rights to it, because not every territory around the world is going to perform similarly. We’re very selective in our research in terms of where to take content internationally.
Fathom has added over 400 partner theatres since coming back from the pandemic. What factors led to that growth?
We have about 1,100 theaters that are on our proprietary satellite network, the Digital Broadcasts Network (DBN), with a reach of around 2,200 screens in those 1,100 theaters. For a piece of content that isn’t going out over the network, but through DCPs, which we do fairly often, all you need is a digital projector. We identified so far about 400 different theaters that do not have our network, and we came up with a program called DCP Only. It’s been accepted extremely well. We are going into a massive amount of theaters with The Chosen via DCPs. It’s been a real opportunity to go into underserved communities, communities where we have our network but may have additional screens or theaters that also want our content. To be a little more flexible to allow theaters to participate with our content outside of our network has been wonderful.
What sort of event cinema programming has been working best at cinemas lateley?
What’s interesting about Fathom’s position in the market is that we have very diverse content. Anything from the arts with Metropolitan Opera, NT Live, sporting events, original programming, anime, classic movies—it goes on and on. The beauty of that, is that—during my tenure, at least, I think even prior to my tenure—not all of those categories will perform at the same level. It’s good not to be a one trick pony, where there’s just one or two categories that are out there. We’ve evolved the company so that there’s a vast array of diverse content and verticals that we go after. This year it’s been faith; probably 20 to 25 percent of our revenue this year is going to be in the faith and inspiration area. That has just taken off like crazy.
Faith-based films have always been a challenge for commercial distributors. There is so much potential there, and while there have been examples of successful films hitting the market through a traditional theatrical run, it seems like event cinema has cracked the code to making faith-based work in cinemas.
We just came off a run of Lifemark, for example. That was produced by the Kendrick Brothers and Kirk Cameron. It’s a fantastic picture. If you look back, all of the Kendrick Brothers pictures have historically done between $30 and $70 million. We had a relationship with Kirk Cameron, having done a number of events with him. And that’s how we decided to go out with this limited run of around five days. I think it held over for something like 20 or 30 days and did over $5 million for us.
In the event cinema space, that’s pretty good revenue. Just as importantly, it was a picture that moved a lot of people. That’s very important to me, both personally and professionally, that not only are we selling a lot of tickets, but we’re educating, entertaining, changing the lives of people with the content that we put on the screen. And that certainly was the case with titles like Lifemark, Christmas with The Chosen: The Messengers, and The Chosen: Season 3 Episodes 1 & 2.
Event cinema has also done a lot of the groundwork for traditional theatrical releases. If we look at anime, for example, that market was carved out by event cinema distributors like yourselves. Anime went from being a niche to $10, $20 million opening weekends.
What ends up happening is that, in some cases, event cinema companies—and Fathom specifically—prove a business model with certain kinds of content that make other folks look at the space and decide to expand it into something much bigger in cinemas. Anime is a great example. We have a great relationship with GKIDS. We run a festival with them every year. and we’ve got a picture coming out with them [in December], EVANGELION:3.0+1.01 Thrice Upon a Time,… [that is] already producing some very significant ticket sales.
The anime crowd just keeps on coming back. That’s why we re-release titles like Spirited Away and Howl’s Moving Castle. These titles keep producing $1 million-plus grosses every single year. It’s a gift that keeps on giving.
You mentioned Evangelion coming out in December. What else does Fathom Events have coming to theaters through the end of the year?
We’re going to finish strong. We’ve got The Chosen. That opens Friday, November 18. We’ve got a timely picture coming up called Portrait of the Queen. It’s about Queen Elizabeth and the photographers that actually photographed her during her reign. That opens November 30. We also have a picture called I Heard the Bells opening December 1 through 4; that one is selling very, very strongly. We’re bringing back the 40th anniversary of Dark Crystal, coming up December 4 and 7. One that I’m excited about is Johnny Cash: The Redemption of an American Icon, which plays on December 6, 8, and 11th. We’re bringing back Conan the Barbarian on December 12. We’re also doing our first picture ever with in conjunction with Sony Affirm in the faith-based area: 5000 Blankets. That’s going to be released on December 12. We just launched our 16th season with The Metropolitan Opera. That is in full swing right now, and you’ll see that running into the spring of 2023. We’re going to cap off this year with It’s A Wonderful Life. Everybody knows that story, and people ask me if people will really get off their couch to see it in a theater—and our pre-sales indicate that they absolutely will.
Looking into 2023, there are IPs that are coming into the public domain right now, and one of those is a project I’m really excited to release: Winnie the Pooh: Blood and Honey. You’ve seen some of the success that we’ve all had with horror pictures, and we’ve done a lot of research on this title. There’s a lot of chatter online with this movie, and we are bringing it to theaters on February 15. We will be going on sale with that title on Friday, January 13.
For a long time, the industry has been speaking about event cinema in terms of its potential in the marketplace. Do you believe it has already turned a corner into being a larger part of the theatrical landscape in North America?
Like I said earlier, event cinema used to be a Monday through Thursday business with limited showtimes. It really has come into its own. I’ve been on the exhibition side for over 30 years with Regal and United Artists and was always a huge supporter of event cinema. I saw it as being incremental at that point. Today, from our end of the spectrum at Fathom, we look at thousands of pieces of content that never make it to the big screen. On the other side, you’ve got your tentpoles that always make it to the big screen through the major studios. We service this nice area that’s not competitive from a windows or streaming perspective, with all kinds of opportunities in that space. Event cinema has come into its own with that. We’re innovating with new ideas. If you recall we brought back “Friends” for its 25th anniversary a couple of years ago, and it did great business. We were all set to throw a 100th birthday celebration for Betty White, but unfortunately she passed away, so we pivoted the event and made it a celebration of her life. This business is all about coming up with creative ideas that can help event cinema industry grow and grow. I believe event cinema has already turned a corner, and now the sky is the limit.
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