Cinema’s Staying Power

Earlier this month at CinemaCon — the convention where studios, entertainment media, app creators and accessory makers hustle for business — Valley companies figured highly in the mix of competitors. In addition to the major movie studios in the Valley, Lyndon Golin, head of Agoura Hills-based theater chain Regency Movies; and Julien Marcel, chief executive of Webedia Movies Pro, headquartered in North Hollywood, attended the convention, which was organized by the National Association of Theater Owners and ran April 1-4 in Las Vegas. For Marcel, this was his fifth time at CinemaCon. His company provides data to assist the film studios with online marketing. Several years ago, Webedia purchased the nearly century-old exhibitor magazine Box Office and has just acquired competing periodical Film Journal. Speaking at a mixer held in a Caesar’s Palace suite, Marcel noted how crucial the convention is to expanding his clientele. “We work with hundreds of chains in 40 top countries,” he said. “In one week, we see all of our customers.” Marcel believes his company is currently riding a wave and he expects 2019 to be very lucrative for Webedia. “Everybody has been talking about digital ticketing for years. The momentum is now,” Marcel said, citing a 20 percent growth in digital ticketing in the U.S. in 2018. “Last year, we helped sell 50 million tickets.” Netflix threat The common refrain at the week’s studio and awards presentations was that there is no experience like going to a theater, sitting in the dark and watching a movie. It was a response to the increasing presence of streaming services such as Netflix Inc. and Amazon.com Inc.’s Amazon Prime. “In past years, you really felt the competition between the studios,” said Fandango correspondent Nikki Novak. “But this year, it was going out to the movies versus staying home.” And yet, as Motion Picture Association of America Chief Executive Charles Rifkin noted, Hollywood studios — powered last year by such billion-dollar-generating blockbusters as “Avengers: Infinity War,” “Black Panther” and “Jurassic World: Fallen Kingdom,” broke all box office records in 2018 with its $41.1 billion annual haul, which included $11.9 billion in the U.S. and Canada. In his “State of the Industry: Past, Present and Future” symposium at CinemaCon, Rifkin noted the film industry saw growth per capita increase in every gender, age, ethnic demographic in 2018. As if to illustrate how viable moviegoing remains, early on in the convention week, the news arrived that Walt Disney Co.’s Marvel superhero movie, “Avengers: End Game” had “broken the internet” as pre-sales went online, causing some servers to fail. It was particularly stellar news for ticket-sales companies such as Fandango. “That was definitely the talk of the morning (on the convention’s second day),” Fandango’s Novak said. “It was kind of shocking for us. We never thought we’d see advance ticket sales again like the kind (‘Star Wars: The Force Awakens’) had (in 2015) and this actually beat it.” Studio presentations The three Valley studios – Disney in Burbank, Comcast Corp.’s NBCUniversal in Universal City and Warner Bros. Entertainment in Burbank – pitched their upcoming films to the exhibitors at the convention. Warner Bros. Motion Picture Group Chairman Toby Emmerich, who acknowledged the contributions of recently dethroned Warner Bros. Entertainment Chief Executive Kevin Tsujihara, pointed out that Warner Bros. enjoyed its biggest year ever in 2018, surpassing $5.6 billion worldwide and marking the studio’s 18th consecutive year surpassing the $1 billion mark. He singled out the success of “Aquaman” and Walter Hamada, the Warner Bros. executive in charge of the DC Extended Universe of superhero movies. Universal Filmed Entertainment Group President and Chief Distribution Officer Peter Levinsohn also reported a robust 2018 for his company. “Universal has seen four years of record profit,” Levinsohn said, plus the studio earned $5 billion of last year. Rallying under the slogan of “The Power of Cinema is Universal,” Jim Orr, president of Domestic Theatrical Distribution and Donna Langley, chair of Filmed Entertainment, led the Universal presentation while Peter Kujawski, chairman of Focus Features at Universal, thumped the specialty label’s 2018 successes, including “BlacKKKlansman,” which won director Spike Lee his first Academy Award; and “Won’t You Be My Neighbor?” about children’s television entertainer Fred Rogers, which, despite its Oscars race-exclusion, went on to become the highest-grossing documentary in history. Of all the presentations, Novak told the Business Journal that one studio surpassed them all. “I felt (Disney’s) presentation was the best, even though it felt short,” she said. Despite the lack of celebrity appearances, which she said Walt Disney Co. reserves for other venues, she thought Disney’s concise highlight reel plus screening the first 17 minutes of “Toy Story 4” for exhibitors proved very effective. “It couldn’t be a better 17 minutes,” she said of the footage from the Pixar animated sequel. Novak also appreciated that Disney addressed the rocky acquisition of 21st Century Fox, which may cause as many as 4,000 Fox employees to lose their jobs. “They sort of give you an overview of what they’ve got, they didn’t gloss over it, which I appreciated,” she said. Of all the movies previewed at CinemaCon 2019, Novak felt one preview definitely stood out, and it unspooled during the Warner Bros. presentation. “For me, the highlight was ‘Joker’ because even with superhero movies, people want something they’ve never seen before,” she said. “‘Joker’ did the best job of showing us something that was obviously completely different.” Theatrical hardware Journalist and Van Nuys resident Charles Flynn, who often writes about the tech side of Hollywood for publications such as Celluloid Junkie, told the Business Journal that, in 2019, Hollywood is in a transitional period in terms of seeding new high-definition equipment into theaters and codifying a standardized visual and audio system. There is a push to add expensive high-definition LED movie screens and to install Dolby Atmos, the state-of-the-art surround sound audio technology introduced by Dolby Laboratories with the release of the Disney animated film “Brave” in 2012. “These are not simple changes, Flynn said. “That’s a lot of energy for such a small niche. The science is not complete.” Yet movie executives see such upgrades as necessary to the future of the industry. “Without the desire to evolve and disrupt, we don’t have the opportunity to incentivize (the audience to come to the movies),” Universal’s Levinsohn said in his presentation. Traditional exhibition In general, the convention left attendees optimistic about the future of multiplex attendance and the traditional theatrical distribution model, even with the onslaught of streaming channels. “We have found that the more good content there is out there, it makes movies up their game, it makes studios up their game, it makes films good,” Novak said. “We’ve become a culture that consumes content at such a rate, but they want to go to the movies and consume more content.” As with the studios’ banner year last year, ultimately, it’s the bottom line that tells the real story for companies such as hers. “Our ticket sales were the highest ever in 2018 and people thought it would go down because of Netflix,” said the Fandango correspondent. The Motion Picture Association’s Rifkin noted that, since the first Nickelodeon in Pittsburgh, Penn., movie theater operators “(have) been hearing about the demise of our industry.” He added that such innovations as the smartphone, the 24/7 cable cycle and streamers have yet to kill the moviegoing tradition. “Methods of production and distribution are evolving,” said Rifkin, who when mentioning that Netflix joined the MPAA last year, elicited audible boos from the audience of exhibitors. “We are strong advocates of cinema,” Rifkin said, adding that both movie and home entertainment grew in 2018, suggesting that theaters and streamers complement and reinforce each other.