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HomeBollywoodNATO, MPA Chiefs On The State Of Moviegoing As CinemaCon Kicks Off

NATO, MPA Chiefs On The State Of Moviegoing As CinemaCon Kicks Off

Cinema owners, studios and indie distributors gathering in Las Vegas this week for exhibition’s biggest confab seek visibility into a theatrical landscape gut-punched by Hollywood strikes last year just as a post-Covid recovery was revving up. Production halted for months led to fewer releases on the schedule. But there’s reason for optimism, from Dune 2 and Godzilla x Kong: The New Empire to a tentpole-laden slate with clips and peeks eagerly awaited by the CinemaCon crowd. Amazon and Apple and studio parents recognize the value of an exclusive theatrical release — a realization that wasn’t at all a given post-pandemic. National Association of Theatre Owners president and CEO Michael O’Leary and Charles Rivkin, chairman and CEO of the Motion Picture Association, talked with Deadline on the state of the industry as CinemaCon kicks off and ahead of their keynotes on Tuesday.

The interviews were edited and condensed for clarity.

DEADLINE: Theaters hit another rough patch in late 2023 into 2024 and there’s noise about mergers and financial woes. Alamo Drafthouse is being shopped. Michael, how would you describe exhibition right now?

MICHEAL O’LEARY: I would say look across this industry and it’s not just exhibition, it’s true of the studios. Of every aspect of the filmed entertainment industry. There’s kind of a sorting out going on. And I think that everybody’s trying to figure out what is the best way to move forward. A lot of the conversations you’re hearing about mergers and things are a part of that process. I’m a big believer in the marketplace. I think ultimately it kind of sorts itself out and you end up with the model that you need to move forward. And if you don’t, there’s another set of adjustments and you just keep moving. So I don’t look at it, in terms of the exhibition side, as necessarily being good or bad. There are different dynamics at play on the studio side versus the exhibition side, obviously. But I think this is kind of just the natural process of the marketplace and we’ll see where it lands.

DEADLINE: But do you see a contraction coming? Releases are down versus pre-pandemic. Studio parents are cutting costs.

O’LEARY: There’s been contraction and expansion throughout the history of our industry. The focus tends to be on the contraction piece. I think the fundamental that we care about, consumer demand, is strong. The support we’re getting from the studio community in terms of producing movies is very strong. Obviously, the strike was a setback with production stoppage. But that didn’t signal a complete change in course, it was just a little bit of a roadblock. Some people would have you think it’s a bigger impediment than it is. It’s something that not only will we overcome, it’s something that we’re starting to overcome,

It’s a fact, there are fewer movies, and so I think there will be a corresponding economic impact to that. I don’t necessarily think that the percentage [dip] will be down as much as some people are projecting. But we’ll see. We’ll look at it in December of 2024. Remember, the strikes didn’t just stop production, they stopped promotion as well, raising awareness, getting people excited about going to the theaters. It happened right on the heels of Barbenheimer [which exploded]. Then it kind of went silent.

CHARLIE RIVKIN: I’m optimistic. It’s heading in the right direction. We can’t deny the Covid gut punch, or the strikes that made it very difficult for studios. But we’re going to get there. Not this year, but maybe by next year we can be at a pre- pandemic level. Look at GodzillaxKong ($218 million global), Dune: Part Two ($632 million), Wonka ($600 million), Kung Fu Panda 4 ($368 million), Bob Marley: One Love ($175 million), Ghostbusters: Frozen Empire ($114 million).  Already you’re seeing some fantastic movies coming out. And I think what you’re going to see at CinemaCon is a great slate.

Deadpool & Wolverine, Alien: Romulus, Kingdom Of The Planet of the Apes, A Quiet Place: Day One, Bad Boys: Ride Or Die, The Fall Guy, Twisters and Furiosa: A Mad Max Saga. Right? That’s just the beginning. So why wouldn’t you feel optimistic and confident?

DEADLINE: It’s also really key, right, that streamers recognize theatrical helps their business – Hollywood studio parents, and, more recently, Apple and Amazon?

O’LEARY: There’s a realization that a movie with an exclusive theatrical release is more successful at every step along the way. That in order to make money in the filmed entertainment space, the theater has to be a part of your business plan. Our conversations with Apple and Amazon have all been very positive. They’ve signaled their commitment to putting films into the theater. We’re excited that they recognize the art form that is a movie on the big screen. We’re learning about them, they’re learning about us, and I feel like the future in both of those relationships is on a very positive trajectory. They’re interested in really compelling stories. They’re trying to make things that will resonate with people and they’re focused on creating the best possible product and not necessarily just trying to do something that’s formulaic or something that’s rote. And I think that’s a positive thing. We’re trying to appeal to a very broad cross section of people all around the world. It’s an iterative process and we’re just happy that their commitment to theatrical is what it is and we’re looking forward to working with them and seeing what comes next.

RIVKIN: The fact that those large streaming platforms are investing heavily in film production and distribution seems to suggest they see great value in the theatrical experience. And, of course, the legacy studios [do]. Apple and Amazon have had great success with Killers Of The Flower Moon, American Fiction and others. I’m pretty sure they’re going to continue to support exhibition.

DEADLINE: Will Apple and Amazon be joining the MPA?

RIVKIN: Look, you know, I brought in Netflix when I first joined the Motion Picture Association, recognizing that the industry is evolving and changing. And companies that make the kind of quality product that that Apple and Amazon make — I don’t know why they wouldn’t want to be part of the Motion Picture Association. Because they certainly have a lot in common with our existing members. But that’s not something I’m ready to announce today.

DEADLINE: Charlie, piracy is a major MPA focus oth with anti-piracy coalition ACE, and on the policy front. You’re planning a push on Capitol Hill for what’s called judicial site blocking — what is it?

RIVKIN: One of the things I’m going to talk about in my CinemaCon speech is a new tool that we need in our toolbox. Well not a new tool, a tool that we do not have in America, Judicial site blocking is a targeted legal tactic to disrupt the connection between digital pirates and their audience. It basically allows all types of creative industries — film, TV, music books — to request in court that internet service providers block access to websites that are dedicated to sharing stolen, pirated content. It just makes sense. If a store was built illegally in the middle of the street here in Washington D.C., selling illegal products, it would be taken down in a heartbeat. There are 45 other nations around the world including most of our leading democracies and friends that have judicial site blocking.

And there’s a direct impact on the box office. When people aren’t stealing from our studios, they may end up going to movie theaters. I’ll talk in more detail about that on Tuesday. But it has a direct impact on whether people see things at the box office. It’s going to be a big legislative priority for me and my team.

DEADLINE: That kind of legislation has been really difficult.

RIVKIN: I can’t tell you whether it’s going to happen. I’m just telling the crowd in Vegas that I’m going to try very hard to make it happen, because I think it would have a very positive impact on the economics of our industry.

DEADLINE: Michael, wanted to ask about indie films, which are having a tough time. What is exhibition’s commitment to them?

O’LEARY: That’s a critically important piece of the puzzle. It’s something I’m going to talk about. The industry needs to have a strong slate of smaller-budgeted and medium-sized movies. There’s an audience for those. Those aren’t just critical darlings, those are films that people like to go and see. We need to make sure that we are getting those into the marketplace, reaching out to the appropriate audience, and letting those movies build over time and and coalesce and create bigger audiences.

I do not believe that the industry can survive on blockbusters or tentpoles alone, we need to have a diversity of films, not just from an economic standpoint but because that’s what will keep people interested, will keep people coming back to the theaters. The moviegoing experience can be about multiple things at the same time. Some did really, really well. A lot of them were nominated for Best Picture. There were some really, really terrific films. If we don’t work, and we don’t create a place and find a home for those movies, there will be fewer of them. And that is a result that we should not allow to happen.

DEADLINE: What are you thinking about here?

O’LEARY: Are we marketing them in the correct way? Are we giving them enough of a footprint that they can succeed in the marketplace? Are we ignoring audiences that might be interested in these types of movies? I think part of this kind of reshuffling of the entire industry now ought to be a candid assessment of how we do things and say, what’s working and what’s not working? Or what should we try that we haven’t tried before?

I don’t think there’s one specific thing we can point to that that can tell you why a movie underperforms or overperforms. I think it’s a constant process of evaluation. And the consumers are evolving. People want compelling and interesting stories, and they’ll show up for those if they know they’re there. That model applies across the ecosystem of movies from the biggest to the smallest.

DEADLINE: You said you’d recently visited a theater with a restaurant, bar, bowling alley and arcade. What does that signify?

O’LEARY: What’s not getting enough attention talking about exhibition is that you’re seeing people say, ‘This is a good property, there’s an opportunity to make some money here. We’re going to put some capital into this place, turn it into the type of place where people can have a great experience.’ I feel very good about the direction of this industry overall because there’s a lot of great work going on across the country. We are a consumer facing industry. And I think one of the strongest points that we make is that the theatrical exhibition industry meets its customers where they are, and this is what people want, and we’re providing it for them.

Having said all of that, you know, these are capital intensive projects. So the access to more capital is definitely something that’s important. The cost of money right now is fairly high. My message quite simply to the financial community is that investing in innovative people that are creating the theaters that people want to go to today is a smart investment. So we’re hoping to get more money into the industry, because that’s really the only limitation on the types of experiences that we can create for people. It’s not just about keeping the moviegoing public coming back, we want to reach new audiences and get them into the theater. And it’s challenging, but we have to keep upping our game and getting smarter and better.

DEADLINE: What about windows, still in flux?

O’LEARY: I think the marketplace is kind of setting the windows right now. There is experimentation. Over time there will be a process which works itself out and ultimately will end up in a place where the windows is about right. And I don’t know what that number is exactly. But I think that’s what ultimately happens. From the perspective of exhibition, we continue to say we believe in movies in theaters, but not just any movie, at any point, in the theater, what we want is a movie that’s in a theater that has a clear to consumer window of exclusivity in the theater, supported by marketing, those are the elements that we think are important. And I think that is where the market is gravitating.

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