David Passman is President and CEO of Carmike, the fourth largest theatre company in the United States with over 2,500 screens. David is also President of the National Association of Theatre Owners.
So David, what’s new at Carmike?
Well we’re not releasing earnings until next week so I can’t talk about fourth quarter but I can tell you that we were thrilled that the industry rebounded after that double digit decline in the first quarter and Carmike is going to be one of the leaders in that box office rebound so we are very pleased with how we are performing at the audience level and our core strategy is to grow our circuit another 20-25% so we can be considered one of the BIG circuits and we’re well on our way to doing that with merger discussions going on and we’re just very excited about our position within the industry. So at Carmike our main objective is to grow our company to where we can enjoy some big circuit power.
So what do you think the rest of the year looks like, box office wise?
That is the big question. The thing that I am most disheartened by is that most people who are writing about the industry are writing off 2014 and I guess my conclusion on that is don’t be so quick to write off this year because it’s going to be a pretty strong year. Q1 is a big surprise to everyone because it’s off a pretty low comp from last year but Q1 came out of the gate pretty strong and it looks like it’s going to be up pretty close to double digits. Q2 and Q3 are going to be pretty tough but they should be close to last year with “Amazing Spider-Man”, “300”, “Mr. Peabody”, “Divergent”, “Noah” could be big, “Captain America” of course, so I think Q2 and Q3 are going to be real strong. They are going to have a tough time bettering last year but it will be really strong. To me the biggest question is after “Hunger Games” and “Hobbit” how will Q4 shape up.
Yes that’s what everybody is talk about.
DP I haven’t talked to too many people about it because we are into the here and now but last year if you looked at 2013 people were worried about the end of the year but all of a sudden out of the blue comes “Gravity” which was pretty darn big and then a new franchise was born in “Frozen”, which people who saw it liked but nobody could have predicted it to do what it ended up doing so I’m hoping we have 3 or 4 of those kind of movies Q4 but you never know when you might see a film like “Blind Side” or you never know when a “Gravity” will blow the rood off. So I’m a bit more optimistic than people who are trying to write off 2013. And wow Jim, 2015 looks like it’s going to be a monster, really big compared to history.
Yes, you look at the release schedule for 2015 and it’s an embarrassment of riches.
It may end up being that people start sliding movies out of 2015 because it is going to be so strong which I hope doesn’t happen, I’d love to see a double digit increase at the box office. Wouldn’t that be something!
Yes, people from outside the industry love to write off the movie business and wouldn’t it be great to have a year like 2015 looks like so we can write off those annoying stories of the doom and gloom in the film business.
Yes but then with a little bit of a downward spiral those same people will be writing the business off again!
Right. I did want to talk to you about your role as head of NATO. What do you see for 2014 as the big NATO issues that you’ll be concentrating on with John (Fithian)?
Frankly, I think the biggest issue that we have coming up is that, and this going beyond NATO, if you look at our industry holistically there are a lot of things going on with amenities and the like, the AMC reseating, the take-off of alcohol in theatres, the in-theatre dining experience, the new Dolby and Barco sound systems, there are a lot of things going on that are all about improving the movie going experience for the consumer and one of those side issues for the consumer is what we’re doing to them or for them before the show and this in theatre marketing issue that NATO issued guidelines for trailer lengths as well as the amount of time between the trailer and the release date will become more and more important. Consumers, as we see it anecdotally at Carmike, want shorter trailers-they don’t want to know the whole movie. We get more and more people saying the trailers are basically giving away the movie so we would love to get it closer, certainly not television 30 or 60 second style, but enough to tell the tell the story and entice someone to see the movie but not so much that when they see the trailer they feel they’ve seen the whole movie. So, shortened trailers will be a big issue for us. I certainly hope we don’t end up having some exhibitors showing 2 minute trailers and some showing 2.5 minute trailers.
Any other industry issues you’d like to address?
I think there is one issue, and I wouldn’t necessarily call it NATO related, but it revolves around these “Super Tickets”. Where we have experienced with it it’s been a very interesting dynamic. A lot of consumers love to get things like t-shirts, posters or the right to get the dvd when it comes out. It’s a very interesting concept. I don’t think it’s going to move the needle but it’s fun to do.