Exhibition and distribution must work together to usher in “the next great era of cinema”, urged Cinema United president & CEO Michael O’Leary in
Exhibition and distribution must work together to usher in “the next great era of cinema”, urged Cinema United president & CEO Michael O’Leary in his state of the industry speech at CinemaCon on Tuesday.
In an emotive address at The Colosseum in Caesars Palace, Las Vegas, O’Leary underscored a commitment to a theatrical-first cinema ecosystem. He asserted the need for a minimum 45-day exclusive theatrical window, better marketing and outreach, and refurbished locations. “We are recovering,” he said of the turbulent last few years, “but we are not recovered.”
Warning against ”clinging to the norms of a pre-pandemic world or to the transient adjustments made during that time”, O’Leary called for “a system that recognises our common goals and does not pit one sector against another in a short-sighted quest for immediate financial return at the cost of longterm success”.
O’Leary was firm yet realistic on windows, recognising that the days of a minimum 90-day window for all films are gone, adding: “[T]here must be a baseline, and for most movies, the ultimate box office success and consumer demand cannot be effectively determined short of a 45-day window.”
He continued, ”We can see the impact of windows on box office recovery throughout the world […] In countries with longer windows, the box office recovery has been greater.”
Shorter windows “hit the bottom line”
The head of the cinema lobby group formerly known as NATO (National Association of Theatre Owners) added: “Shorter windows reduce the number of people that head to the theatre in the opening weeks of a release. It hits the bottom-line, and in many cases, undermines the ability of medium or smaller-budget movies to build an audience or even get off the ground.”
O’Leary referred to box office results of the top 100 films per year, pre- and post-pandemic, noting that the top 20 titles declined by 10% but box office of the next 80 films of all sizes declined by 32%. The top 20 films had 49 days of theatrical exclusivity, compared to 31 days for the next 80. If the decline of the bottom 80 films could be circumscribed to 10%, he said, it would add more than $1bn to annual box office. Longer windows supported by marketing can achieve this, he said.
The executive called on the industry to raise awareness of films, citing NRG research that showed audience awareness of fresh releases has dropped, with a 38% decline of titles that achieved an awareness level over 50% by opening weekend.
“Moving forward, our goal should be audience awareness of over 50% for all wide releases,” O’Leary said. “We live in a time of pervasive and relentless communication, and there is no excuse not to attain this target if exhibition and distribution work together.”
In terms of preshow, O’Leary suggested four to six 90-second trailers. He also urged cinema operators to apply their audience data when scheduling films, advising there was no need for “a G or PG-rated film to screen at 10.15pm on a school night when the theatre owner knows there is no audience for it”.
Cinema reinvestment and refurbishment is a matter close to O’Leary’s heart. Last September the eight biggest chains in North America pledged to invest more than $2.2bn to modernise and upgrade their locations over the next three years. “We must continue to invest in all aspects of the moviegoing experience,” he said, “from projection, sound and lighting to concessions, food and beverage, lobby and parking areas. All the pieces matter.”
Large screen formats
And there was also a word of warning when embracing vast screen formats – while valuable to the bottom line and popular – not to do so at the expense of other auditoriums. “Every experience at the local theatre is and must continue to be a premium experience,” said O’Leary. “If, in our collective zeal to promote large screen experiences, we lead movie-lovers to believe that the only reason to go to the theatre is for large screen formats, we are destroying the very heart of our business.”
The Cinema United head signed off with a call to action, urging exhibition and distribution to “come together, in good faith and spirit” to discuss frankly how to improve the cinema-going experience.
“The goal is growing the business, growing revenue, giving movie fans more options – in a way that benefits everyone collectively,” he said. “The studios’ success is our success, and ours is theirs. And if we get it right, movie fans the world over will be the true beneficiaries.”
Prior to O’Leary’s address, MPA chairman Charles Rivkin said the organisation stood with the film community in its efforts to push for more production and generate jobs, despite current volatility, without referring specifically to the tumultuous first months of the Donald Trump administration.
Noting that a major film production will “pump $1.3m per day into the local economy”, Rivkin said production jobs pay 64% higher than the national average. Looking at state incentives, he said every dollar spent on production in Georgia generated $6 in economic returns, rising to $8 in New Mexico, among other examples.
“We’re working with legislators to being more jobs to these communities,” the MPA chairman said, adding: “We’re going to be pushing for greater action at the federal level this year… we’re going to explore new policies to ramp up filmmaking.”
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