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At CinemaCon, Embattled Film Industry Leaders Rally the Troops with Hopes of a Comeback

"Simultaneous release DOES. NOT. WORK. For anyone," declares NATO CEO John Fithian.

John Fithian, left, president and CEO of the National Association of Theatre Owners (NATO), and Charles Rivkin, chairman and CEO of the Motion Picture Association of America (MPAA), address the audience during CinemaCon 2019, the official convention of NATO, at Caesars Palace, Tuesday, April 2, 2019, in Las Vegas. (Photo by Chris Pizzello/Invision/AP)

John Fithian, left, president and CEO of the National Association of Theatre Owners (NATO), and Charles Rivkin, chairman and CEO of the Motion Picture Association of America (MPAA), address the audience at CinemaCon.

Chris Pizzello/Invision/AP

No question about it, the pandemic hit movie theaters hard. As theater owners assemble this week for their annual convention CinemaCon in Las Vegas, after a year of cancellations all around, they are licking their wounds and repeating familiar mantras about the sanctity of the theatrical experience. Rather then tout the year’s record-breaking box office achievements as in past years (because there were none to be had this time around), when NATO chief John Fithian and MPA chairman Charles Rivkin on Tuesday morning gave their usual speeches at the Colosseum at Caesars Palace to a masked crowd, both men were rallying the troops, weary from fighting in the trenches.

“We have been through one of the worst years that the global economy — and our industry in particular — has had in a generation,” said Rivkin. “Few took this harder than theater owners and their employees, across the United States and around the world. Theaters completely shuttered. Employees let go. Hundreds of thousands of people have lost their jobs or were furloughed. More than 96 percent of independently owned and mid-sized theaters lost 70 percent of their income. And just when things seemed to be coming back, and talk of recovery was everywhere, the Delta variant came in, making everyone fear once again for their health and their economic security.”

And clearly, the industry has solidified around key talking points and targets. While the theater owners come to terms with permanently shortened ancillary windows, enemy number one is now day-and-date releasing. “Exclusive release periods remain vital to the survival and success of the theatrical experience,” said Fithian. “Theatrical windows won’t be what they were before, but they can’t be what they were during the pandemic either. What the future holds is up to our members and distributors to decide, but let us be clear about one thing: simultaneous release DOES. NOT. WORK. For anyone. A steady flow of strong movies released with exclusive windows is essential to exhibition’s recovery, and to the profitability of the entire movie ecosystem.”

Enemy number two is piracy. “The data shows us that in the pre-release period of a movie, piracy reduces box-office revenue by more than 19 percent,” said Rivkin, while hailing the success of a handful of recent movies, from Warner Bros.’ “Godzilla vs. Kong,” which “was the first to cross the $100 million mark in the U.S.,” to Paramount’s “A Quiet Place Part II” and Disney’s “Cruella.” “And ‘A Quiet Place Part II’ has now passed the $160 million mark. Universal Picture’s ‘F9: The Fast Saga’ put its pedal to the metal with a $70 million opening weekend in North America, the best since ‘Star Wars: The Rise of Skywalker’ in 2019. It’s now grossed more than $172 million — (and that’s just domestic). And only 3 weeks after ‘F9’ debuted, Disney’s ‘Black Widow’ had an $80 million opening, and now it’s closing in on $180 million.”

And the pandemic-fueled rise of streaming is not necessarily the enemy, said Rivkin: “Recent studies have confirmed that streaming and moviegoing are not zero sum. They are not in competition. Rather, as studies show, consumers consider them to be part of a shared spectrum of entertainment. NATO’s new Ernst & Young report for 2020 proved — yet again — that movie buffs are both going to the movies and consuming streaming content. As another study finds, consumers consider a theatrical opening to be the stamp of quality. If a film has been released in the theaters, they know it has ‘pedigree’. Well clearly, the box office numbers that we’ve been seeing lately show that audiences don’t want to wait at home. They want to enjoy that ‘pedigree’ right now.  In some ways, it can be said that we are living in a new ‘golden age of content’. Because never before have we had the choice of so many rich and diverse stories across multiple platforms. And yet, there is nothing that grabs the attention for such a sustained period of time as the theatrical experience.”

Photo by: STRF/STAR MAX/IPx 2021 3/5/21 Movie Theaters in New York City reopened today at 25%, capacity after months of being closed due to the Coronavirus pandemic.

An AMC location in NYC

STRF/STAR MAX/IPx

Both men described the ways that movie theaters remain vital to local communities, both economically and emotionally. “We are the industry that drives economic growth across our country,” said Rivkin. “We are the industry that brings 2.5 million jobs to men and women in all 50 states, across a diversity of skills and trades. We are the industry that pays out more than $188 billion to American workers every year. That comprises more than 93,000 American businesses (most of which have fewer than 10 people). We employ more than 741,000 people across the entire country, including over 150,000 ushers, ticket takers and concession workers in our movie theaters. We are the industry that drives one of America’s greatest exports. $16 billion in export revenue, and a positive balance of trade with nearly every country on the planet.”

“Cinemas are a vital part of the small towns and big cities in which they are located,” Fithian said. “The foot traffic movie theaters create will help surrounding businesses recover from COVID-19. According to an Ernst and Young study that NATO released last week, in addition to the $18.3 billion in direct movie theater revenue, movie-night spending on other businesses here in the U.S. amounted to $5 billion in 2019 before the pandemic hit. We will return to that level again.”

Rivkin exhorted the theater owners to get up and fight, with comeback movies to inspire them: “Ladies and gentlemen, for more than a hundred years, we have built one of the most successful and iconic industries in human history. And together, we will build an even greater one in the century to come. As movie lovers, I’m sure you’ll agree that we can all appreciate a great comeback story. Think of Rocky Balboa going the distance. Think of every superhero in the Marvel Cinematic Universe. Always fighting to regain their lost superpowers so they can save the world.”

That rah-rah return to normalcy is unlikely to be fulfilled, as shopping malls that house theaters are among the pandemic distressed, weaker theaters are closing, and while the industry may remain vital, theaters will have a smaller footprint and are unlikely to regain past revenue markers. Tellingly, following an era when once-mighty theater chains like AMC and Regal brought faceless corporate consolidation to the theater industry, Fithian and Rivkin are preaching a return to a local footprint, as individual theaters reach out to their own constituencies. That can only be a good thing.

The full text of both speeches are below.

CinemaCon 2021 State of the Industry Speech – August 24, 2021: Remarks as Prepared for Motion Picture Association Chairman and CEO Charles Rivkin

Hello again, everybody.

I’m Charlie Rivkin, Chairman and CEO of the Motion Picture Association, and I do want to echo the message you just heard.

We are the industry that drives economic growth across our country.

We are the industry that brings 2.5 million jobs to men and women in all 50 states, across a diversity of skills and trades.

We are the industry that pays out more than $188 billion to American workers every year.

That comprises more than 93,000 American businesses (most of which have fewer than 10 people).

We employ more than 741,000 people across the entire country, including over 150,000 ushers, ticket takers and concession workers in our movie theaters.

We are the industry that drives one of America’s greatest exports. $16 billion in export revenue, and a positive balance of trade with nearly every country on the planet.

And like the video also said, – WE – are the industry that brings powerful and fascinating stories to millions of people, every day.

All of this takes place when things are going well, and when we are able to do what we do best.

But as you know, we have been through one of the worst years that the global economy – and our industry in particular – has had in a generation.

Few took this harder than theater owners and their employees, across the United States and around the world.

Theaters completely shuttered.

Employees let go.

Hundreds of thousands of people have lost their jobs or were furloughed.

More than 96 percent of independently owned and mid-sized theaters lost 70 percent of their income.

And just when things seemed to be coming back, and talk of recovery was everywhere, the Delta variant came in, making everyone fear once again for their health and their economic security.

So many others would have given up. Many did.

But this is no ordinary industry.

As you know, it’s no ordinary industry, because it is filled with so many extraordinary people.

I see it every single day, when I meet with, work with, talk with, people like ALL of you – in this room.

Producers and exhibitors.

Business leaders and union workers.

Actors, set designers, and theater employees.

People who understand that innovation is at the heart of our DNA….And resiliency.

But most of all, people who recognize the power of our unity.

And so, to NATO ….

To every theater owner and employee …

To every member of our industry …

To every member of the press who covers us …

And to everyone in this room who loves movies and, especially, loves going to the movies …

I’m here to tell you that unity has helped us prevail through this pandemic – and it’s going to be the secret of our success moving forward.

And this industry – will NEVER give up.

We will never give up – because we know what’s at stake, not just for us, but for what we bring to the world.

Having a job, and being able to make payroll for your employees, these are MORE than matters of economic necessity.

These are matters of personal pride… Of dignity.

Of the simple satisfaction of leading the life you deserve.

And the special pride of knowing you are part of an industry that brings so much pleasure, entertainment, community, and celebration of the best in life, for everyone.

Ladies and gentlemen, for more than a hundred years, we have built one of the most successful and iconic industries in human history.

And together, we will build an even greater one in the century to come.

As movie lovers, I’m sure you’ll agree that we can all appreciate a great comeback story.

Think of Rocky Balboa going the distance.

Think of every superhero in the Marvel Cinematic Universe.

Always fighting to regain their lost superpowers so they can save the world.

In the movies, those stories are resolved usually in one sitting.

But in real life, as our industry works to achieve its own comeback, we know it’s going to take a little bit longer.

But we’ve already gained incredible ground and learned strategic lessons along the way.

Think of how this industry – this extended family that includes the MPA, NATO, the studios, our unions, independent filmmakers – has already come together to get us through the worst of it.

We knocked on every door that mattered on Capitol Hill (and state capitals around the country).

I’ve personally spoken to more than half of our nation’s governors.

We pressed House leaders, Senate leaders, Caucus leaders, – everybody.

We demanded liquidity.

We pressed for PPP loans and grants.

We urged politicians to approve expanded unemployment insurance….

We did NOT quit until we were heard …

Whether we were asking Congress to include movie theaters in the “Save Our Stages Act” or raising the banner for all exhibitors (and their employees) in the “Big Screen Is Back” campaign.

Theater owners – everywhere – found new ways to stay in business, from offering popcorn pickup and delivery to renting out their venues to private groups.

NATO sponsored an alliance of more than 425 companies and more than 33,200 screens nationwide to commit to implement expert-backed, industry-specific health and safety protocols.

We developed those protocols, to keep the men and women of our industry (as well as theater employees) afloat.

And by working together, we made it through the worst months of the pandemic, and we positioned ourselves to get back to work as soon as was humanly possible.

The box office numbers showed just how ready the industry was to get back to business, and how willing moviegoers were to support them.

Straight out of the pandemic, Warner Brother’s Godzilla vs. Kong was the first to cross the $100 million mark in the U.S.

Paramount’s A Quiet Place Part II and Disney’s Cruella came roaring out of the gate on Memorial Day Weekend….

And A Quiet Place Part II has now passed the $160 million mark.

Universal Picture’s F9: The Fast Saga put its pedal to the metal with a $70 million opening weekend in North America, the best since Star Wars: The Rise of Skywalker in 2019. It’s now grossed more than $172 million – (and that’s just domestic).

And only 3 weeks after F9 debuted, Disney’s Black Widow had an $80 million opening, and now it’s closing in on $180 million.

With the latest surge of the Delta variant, there is no doubt that we are all watching and waiting to see what happens.

Yesterday’s news that the FDA granted full approval to one of the vaccines is very encouraging news for the industry.

As we meet today, we are seeing things we didn’t think were possible a year ago.

Productions are back in business and have been for some time.

Theater employees are back at work in theaters from London to Lima, from Lagos to right here in Las Vegas.

And you can hear customers in the lobby again, talking about the movie they just saw. Once again, you can smell the popcorn.

Meanwhile, we continue to do our part.

I’m proud to serve as Chairman of the ‘Alliance for Creativity and Entertainment’ (ACE), which is now the world’s leading coalition to protect the dynamic legal marketplace and reduce digital piracy.

And as Chairman, I can assure you that we are fighting every day to protect creators AND exhibitors.

The data shows us that in the pre-release period of a movie, piracy reduces box-office revenue by more than 19 percent.

Just this month in Madrid, Spanish law enforcement – with the help of the MPA – arrested a man who was illegally recording movies in theaters.

Piracy syndicates buy from criminals like him, and then put those movies on specialized websites that are available for illegal downloading or streaming.

The syndicates then make their profits from companies that advertise on their illegal services.

ACE has been very successful in working with law enforcement and shutting down many of these illicit operations, but our fight continues.

Now as we look around this room, we see masks on faces again….

And we recognize that progress is coming in fits and starts.

William Gibson once said: “The future is here, it’s just not evenly distributed yet.”

Well, I believe we are at a key moment in time, with an opportunity for new thinking and reinvention, just like the creative resurgence that followed the influenza pandemic of 1918.

It was the “Roaring Twenties,” when people felt the need to embrace life in NEW ways, and to think and act differently…

And during that time, this industry was coming to life.

The Motion Picture Association was founded in 1922.

Paramount and First National were barely a decade old.

AMC, MGM, Warner Bros., Walt Disney, they were also founded in the Twenties.

All of them rapidly growing our industry into the iconic, and economic powerhouse that it remains today.

But as we face a changing digital future, and a second century, the challenges are as daunting as they are uncertain.

Longstanding norms and business models (once considered sacrosanct) are being disrupted.

That’s not only within our industry, but everywhere.

From financial services to electric and autonomous vehicles to space tourism.

But while we cannot predict what lies ahead, we can remind ourselves that the magic of the theatrical experience has never dimmed.

Even as we watched – some binged – movies and TV shows at home during the shutdown, we never lost our appetite for the experience of watching movies in a theater.

We couldn’t wait to see Vin Diesel – big as a house – on the big screen again.

Recent studies have confirmed that streaming and moviegoing are not zero sum.

They are not in competition.

Rather, as studies show, consumers consider them to be part of a shared spectrum of entertainment.

NATO’s new Ernst & Young report for 2020 proved – yet again – that movie buffs are both going to the movies and consuming streaming content.

As another study finds, consumers consider a theatrical opening to be the stamp of quality.

If a film has been released in the theaters, they know it has ‘pedigree’.

Well clearly, the box office numbers that we’ve been seeing lately show that audiences don’t want to wait at home.

They want to enjoy that ‘pedigree’ right now.

In some ways, it can be said that we are living in a new ‘golden age of content’.

Because never before have we had the choice of so many rich and diverse stories across multiple platforms.

And yet, there is nothing that grabs the attention for such a sustained period of time as the theatrical experience.

For enterprising exhibitors, the continuing evolution of business models, consumer trends, and customer bases, is theirs to claim as much as anyone.

All they need is the chance.

And right now, even though the pandemic is presenting us with challenges that seem both new and old at the same time, we will not lose the footing we set in place.

We are poised, ready, and eager to move ahead….

Ready to put the past year behind us, and ready to prevail through what lies ahead.

I know the whole world is ready for a turn for the better.

A comeback on a scale that we have not seen for a very long time.

And I know that our industry is well positioned to lead that comeback because of who we are and what we bring to everyone.

First and foremost, we are one of the most resilient and powerful contributors to the economy.

More and more state governments and national governments around the world are providing production incentives for our industry because they recognize that we are also a catalyst for economic recovery in other sectors.

But our industry isn’t only an economic leader, it’s a cultural leader – reflecting the lives, the feelings, and the values of audiences in all their diversity.

We lift economies and we lift spirits.

We are the big screen of shared dreams.

Giving expression to people’s deepest hopes and aspirations.

Giving audiences transformative stories and new belief.

This has been the bond between us and global audiences for more than a century, and it is our bond to uphold – but also to re-invent….

When all is said and done…

We will continue to boost economies …

We’ll continue to illuminate and reflect lives…

And we will continue to reinvent ourselves and what we bring to audiences …

As we continue to write our own comeback story.

We’ve been through a hundred years of this together.

The next hundred years is going to be even more exciting.

We’ve got this…

And the reason we’ve got this…

Is because we’ve got each other.

Thank you.

 

Comments by John Fithian President & CEO National Association of Theatre Owners

CinemaCon State of the Industry Las Vegas, Nevada 24 August 2021

It feels really great to be back on this stage surrounded by friends again.

Technology kept us connected during the pandemic, but nothing can replace meeting face to face. Humans simply need to be together. That’s why our business will thrive again. The pandemic constituted an existential challenge to the movie-going experience, but collectively we have risen to overcome that threat.

I want to take a few moments to recognize some historic efforts that have helped us through these trying times.

NATO would be nothing if not for the dedicated members who volunteer their time to support the industry they love.

Our executive board has met over Zoom more than 50 times during this pandemic to provide guidance and to take decisive action. Two chairmen have served during the pandemic—Ellis Jacob from Cineplex and Rolando Rodriguez from Marcus—and their vision and steadfast leadership have been invaluable assets. They have helped us chart a path forward when no roadmap existed.

NATO and our members have stayed more connected, more unified, and more proactive than ever before. Members from competing theater companies have worked together on grassroots lobbying, safe re-opening protocols, securing tax breaks, helping our furloughed employees, and successfully applying for grants—all of which are keeping projector lights on.

I also want to thank my NATO and CinemaCon staff colleagues for working tirelessly during the pandemic. Though every member of the team has contributed significantly to our recovery efforts, I want to give a special shout out to two individuals—Esther Baruh and Jackie Brenneman—whose leadership of the SVOG grant program has served  as a lifeline to many of our members. Would Esther and Jackie please stand and be recognized?

The Directors Guild of America and the Motion Picture Association have been tremendous partners during this crisis. More than 100 directors rallied to support our industry by signing an unprecedented letter to Congress asking for help. MPA members have helped us re-open safely and have provided new films to bring customers back.

Members of the creative community have shown their support in so many ways to make one thing crystal clear: their best work is made for the big screen. I applaud artists who refuse to accept the false narrative that movie theaters are a thing of the past and that the future will be one in which every movie is consumed at home. These leading creatives know better, and they are on the right side of history.

There’s no denying that our industry has changed during the last 18 months. Now we are charting a successful path forward.

Exclusive release periods remain vital to the survival and success of the theatrical experience. Theatrical windows won’t be what they were before, but they can’t be what they were during the pandemic either. What the future holds is up to our members and distributors to decide, but let us be clear about one thing: simultaneous release DOES. NOT. WORK. For anyone. A steady flow of strong movies released with exclusive windows is essential to exhibition’s recovery, and to the profitability of the entire movie ecosystem.

This is a historic turning point for our industry. We are about to enter an era of great experimentation that I believe will only bolster the importance of the big screen experience. Movies that were starting to shy away from a theatrical release will grace our screens again. Our customers want more options, and there are content providers looking to satisfy that demand in new theatrical release models.

Our members will redefine what the theatrical experience means. Cinema is much more than a passive form of entertainment. It’s immersive and life-changing. Cinema is not meant to exist on the same digital playing field as funny cat videos on YouTube, or endless TikTok scrolling.

Billions of people around the world had the option of going to the movies taken away from them during the pandemic, and the longing to return to that experience was palpable. Now that they are coming back, the excitement is invigorating.

The sense of community that cinema creates is more important than ever. Cinemas are a vital part of the small towns and big cities in which they are located. The foot traffic movie theaters create will help surrounding businesses recover from COVID-19. According to an Ernst and Young study that NATO released last week, in addition to the $18.3 billion in direct movie theater revenue, movie-night spending on other businesses here in the U.S. amounted to $5 billion in 2019 before the pandemic hit. We will return to that level again.

I am very excited about the week’s schedule. We have a lot to discuss, and I look forward to the insights that will come out of the panels we have scheduled. It feels great to watch studio presentations in the Colosseum once again. I want to thank our partners at ICTA, led by Frank Tees, and NAC, led by Adam Gottlieb, for their help with this show. Also, special thanks to NCM for designing today’s presentation. And . . . Thank you all for being here.

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