by Dave Paolini
The impact of streaming platforms and services—both current and those expected to come online this fall—on exhibitors’ bread-and-butter movie business dominated hallway conversations and the official program at the 2019 International Cinema Technology Association (ICTA) Annual Business Convention, held in Toronto in July.
Disney+, HBO Max, Apple TV Plus, and NBC Universal’s yet-to-be-named service will join a crowded market that includes Netflix, Amazon Prime, Hulu, Sling and others, with their effect on the traditional “theatrical experience” unknown. But for some ICTA attendees, cinema is holding its own.
“Consider that 2018 was a record year for box-office takes and theatre attendance, because we had a great slate of products and the public came out to watch great movies, in theatres,” said Neil Campbell, vice chair of Canada’s Landmark Cinemas. “As well, these were better experiences that could be enjoyed more fully due to better sound, more comfortable seating, associated entertainment and other pluses, at more locations and not just the bigger, downtown marquee houses.”
Campbell and Mark Louis, senior director of presentation at the Alamo Drafthouse circuit, formed a panel on “The Upside Down World of Streaming and Theaters,” moderated by Loren Nielsen, VP, content relations and strategy, XPERI/DTS Inc., who prefaced the discussion with an overview of the streaming industry.
XPERI’s independent and aggregated research revealed that slightly more than half of Americans watch streaming content for two to three hours per day, spread over an average of three devices and three services. “And we’ve found that the number one content category streamed is movies, followed by episodic TV [shows], then news and then sports,” Nielsen reported.
A wide variety of services and pricing schemes are out there and some of these are delivering more movies than others, as well as episodic TV. Original movies and documentaries, buttressed by extensive libraries of prior content, will dominate the fall and 2020 rollouts. Nielsen noted that, led by Disney, the characters and story lines of episodic TV will tie in to theatrical movie plots and characters. So fans wanting to keep up with the Marvel Cinematic Universe and other popular favorites will need to watch streaming content as well go out to the movies.
But what about the tentative moves by some studios to take remastered classics, such as Disney’s Lady and the Tramp (1955), as well as original movie content, straight to their streaming services? Is that a challenge, Nielsen asked, to the traditional model of the first release being a theatrical experience?
“Sure, I would like my theaters to be the only initial source to see a Lady and the Tramp, but that’s not how the world works. I don’t think anyone has a clear plan yet, because, remember, none of this has ever happened before and we don’t know what is coming or we hadn’t thought of, so I hope that there will be more opportunities for us all to do better and make more money, given there will be so much more product,” Campbell observed.
“No one is making nothing but blockbusters, so the more quantity, the more likely that there will be quality there as well, delivering movies like Green Book, which came out of nowhere to be a winner and the best movie of the year,” Campbell added.
Technology, properly deployed to deliver the best experience, should be an argument to the content providers that theaters ought to continue to have “windows of exclusivity,” which in turn could be shared with streaming-service subscribers, Louis opined. “We are teed up to do something nationally with the launch of ‘Righteous Gemstones’ and HBO in August. You will be able to see it before anyone sees it at home, but on the big screen, as a subscriber, with reserved seats to see a premiere. The big benefit for the streaming platforms is that subscribers in turn will spread the word.
“In this way content creators and providers should view theatrical releases as an opportunity to build excitement for what they’re producing, ensuring that all sides win.”
Campbell agreed, noting that theatrical distribution is the engine that pulls the content-delivery train, setting the value for all the other platforms. “Look at Disney, where they believe in the value of the theatrical window, and they want to ensure that they market a movie as best as they can, to deliver as big an audience as possible in the theaters. Because that in turn sets the demand, excitement, attendance, etc. for all the other markets. Ours is still the number one vehicle to build public awareness of their product.”
From Multiplexes to Entertainment ‘Destinations’
Content may still be king, but the ICTA delegates were reminded of the importance of diversification as well by Ellis Jacob, president and CEO of Cineplex, in a Q&A session with ICTA executive director Robert Sunshine, following the streaming panel discussion.
“We have to create destinations that our customers want to come to. It can’t just be movies; one has to have other entertainment available to create a destination that people can enjoy as a one-stop location,” Jacob declared.
His own circuit is a case in point. Cineplex has moved from being simply a film exhibitor into an ecosystem of successful entertainment and media companies. Its foray into digital place-based media, supplying the digital media needs of McDonald’s Canada, BMW, Scotiabank, Royal Bank, and others has resulted in having 57 percent of the mall traffic in Canada for its digital signage business.
“That’s not reliant on our theatrical experiences; but they are not much different than what we deliver in our theaters, showing content and delivering it on an ongoing basis. Cineplex has also gone into the amusement and leisure businesses, with the advent of the Rec Room venues. We have exclusive rights to Topgolf Canada, with our first location coming soon,” Jacob added.
“Cineplex is moving from being a cinema company to an entertainment destination, where we win the entertainment time and dollars of customers, all tied into our loyalty program, which boasts almost 10 million members now. That’s 60 percent of Canadian households, by the way.”
Replying to Sunshine’s question on the value of the Global Cinema Federation, Ellis stressed its emergence as a positive, to give the exhibition community a united, diverse and expansive voice.
“The reason we set up the organization is really to look at global issues, and one big one is that of music rights. In the U.S. when a movie plays, an exhibitor doesn’t have to pay for the music rights. In other parts of the world, including Canada, exhibitors must negotiate payments for the music rights, which can amount to from 6 to 8 percent of your box office take. So what the GCF is trying to do is work with the studios to figure out a mechanism whereby we have some kind of uniformity across the world, to deal with the music portfolios and get them up front, rather than each country having to deal with different rules and rights.”
Ellis noted that “the minute we put the organization together two years ago in Barcelona, every studio phoned me and asked, ‘What are you doing, why are you coming together?’ It certainly wasn’t to gang up on the studios, but rather to have a common voice to press a united front on windows of exclusivity, technology, music rights and other common areas.”
ICTA Spreads its Global Wings
The past year has seen renewed membership growth for the ICTA outside of its core North American members. For Marion Rosset, president of Lyon-based ADDE SAS—a leading French cinema manufacturer and installer—belonging to a mutually supportive, well-versed association of technology experts began as a family affair.
“I’m following in the footsteps of my dad, who was involved with the French exhibition scene and the ICTA when he was younger,” said Rosset. “Learning different ways of doing things is best done by exchanging information with fellow ICTA members, which can only make my company better and benefit our customers, and events like the 2019 Annual Business Convention ensure that ADDE is in the middle of it all. I was pleased to be here with Mathieu Cazorla, operations director, and Loys Philibert, our technology director, learning from others and also sharing our experiences.”
Alan Roe, ICTA president, gave full credit to Jan Runge, Thomas Rüttgers, and the other ICTA members outside of North America for promoting membership and providing the association with a wider context for association events, initiatives and knowledge exchange.
“We basically serve the exhibition and manufacturing communities, working with like-minded but not identical organizations such as NATO, MPAA, SMPTE, and NAC, and through our partnerships with major trade events, including CinemaCon, ShowEast, CineEurope, and CineAsia. So we have a lot to offer a diverse membership, while ensuring their participation to provide a global perspective.”
Alongside a strong networking and social aspect for attendees, the ICTA convention featured tours of Deluxe Canada and Imax facilities in the Toronto region, and an extensive update on manufacturing and service provider offerings, including Christie, Cielo, Cinionic, Dolby, D-Box, EOMAC, GDC, Jaymar, LTI, Moving Image Technologies (MiT), NEC Solutions, Omniterm, and TouchMate.