By Anne Thompson | Thompson on Hollywood April 26, 2013 at 9:04PM
It's easy to look at the Hollywood studios and national theater chains as old sticks-in-the-mud who are refusing to change with the times, but truth is, a lot of smart folks are trying to get ahead of the game--in order to beat out their rivals.
The studios and theaters have historically struggled in their symbiotic relationship, but they truly cannot thrive without cooperating. That relationship has never been more fractured than it is now, as their mutual interests are no longer the same.
Both theater owners and studios are competing with so much noisy content-- online, video on demand, theaters and TV-- that they need to be smart about reaching and luring the consumer to the multiplex.
While the theater chains are unified in their mission to hang onto moviegoers for dear life, the seven studios have their own conflicting agendas. They are well aware that they have many more distribution options than ever before: the global theatrical market is just the most crucial and significant.
On this year's CinemaCon State of the Industry Panel 2.0, the panelists dug into these issues in a more candid way than usual, including Universal Pictures chairman Adam Fogelson, David Passman, President & Chief Executive Officer, Carmike Cinemas, producer Michael De Luca ("Moneyball", "Captain Phillips", "Fifty Shades of Grey"), Bud Mayo, Chairman and CEO, Digiplex Destinations and Matt Jacobson, Head of Development, Facebook.
Anne Thompson: Why don't more studios fill in the gaps that are all too apparent every first quarter, why don't they book films all year round, as Universal does?
Adam Fogelson: As a studio that does not have the luxury of relying on tentpole films... the discipline of doing that has created a real confidence inside our organization that if you really examine the data, there are very few reasons other than historical behavior why almost any film can't work on almost any weekend. There are any number of things. The first weekend in January used to be a non-starter for people, we had a this little horror movie "White Noise" that did business, and that has become a place where movies that that tend to operate.
Even on our big movies: the fourth "The Fast and the Furious" opened north of $70 million on the first weekend in April, where the previous biggest opening had been $35, and the last one opened to $87 million on the last weekend of April. Our belief is it tends to just come down to people following the same behavior as they've always done and not being incentivized to do otherwise. It's a combination of a cold and rational analysis of how the marketplace works and a need we have had that might have been different from others.
AT: What do you exhibitors think of the stream of product coming from the studios?
David Passman: The first quarter of last year led to an all time record at the box office for the entire, what I hear about the first quarter this year across NATO is not enough family films, first quarter got off slow as exhibitors were prone to blame the content providers. So give us more first quarter G and PG but don’t-- in respect to what John Fithian said yesterday--but please don't stop making the Rs either.
AF: Because the quarter didn’t work, people looked for reasons and there were a really a strange number of R rated movies that came out in the first quarter and a lot of them didn't work. To draw the conclusion that there were too many R rated movies is simplistic. If "Django" hadn’t opened in December and opened in January it would have been a huge hit, if "Ted" had opened in January or February it would have been a huge hit. "Identity Thief" was a huge hit. It happens to be about the movies. People tend to if not forget minimize how complicated this is. I took my job three and a half years ago, Donna [Langeley] and I have been working on the slate.
Last year was the first year where the slate reflected our strategy of what we wanted Univeral Pictures to do. We’re making the decisions three and a half years back and living with the consequences. We’re trying to see where the marketplace and filmgoer interest and the world is going to be a long way out. Sometimes you wind up in a circumstance where it doesn't work out. I'm very optimistic from where the whole industry is going to find itself starting now and going forward, the rest of the year looks incredible. It’s not like people said in December said, 'let's make a bunch of R rated movies and get them out in January.' It doesn't work like that.
AT: Explain Michael as a producer even at the top of the chain explain the challenges of coming up with this product. The studios do not make it easy.
Michael De Luca: The challenge is always getting to the material first, and finding new material and getting the studios to be open to what causes innovation which is new talent. Especially in times where you might catch a studio coming off a bad quarter, and cash is tight, the first thing they go after is development spending, but in a way it causes movies that aren’t ready to get made because they don’t have a deep enough bench of development to switch course, when something isn’t ready to go, you might have two or three lined up that aren't ready. The challenge is always getting to the material first, getting the studio to spend money on it, it to the point where it’s viable and having enough stuff in rotation where you’re not caught making movies of a certain quality. You can't predict what's going to work with an audience. There are certain tenets to storytelling that have always been with us and you just try to have the best people around you to recognize those tenets and try to give people a choice.
AT: When you talk about "50 Shades of Grey," it’s going to have to struggle to get the R rating…historically exhibitors tend to prefer the PG. How are you going to deal with this?
MD: As a producer, I can speak to it creatively. You have to divorce yourself from the idea that that book is going to be literally translated. The book is very explicit, because she wanted to get inside the head of that young girl as she goes through this character arc of growing up, and being opened up to a sexual relationship for the first time. It’s literal by design of the author. Movies we all know, a picture is worth 1,000 words, so the cinematic language for the movie, is the opposite. It doesn’t have to be explicit, because images are so powerful. You're dealing with a cinematic language from adult human relationships that have worked, like Adrian Lyne's ouevre from the late 80s and early 90s.
AT: What are some of the ways the digital world can enhance moviegoer interest?
Bud Mayo: At Digiplex we are using digital from the get-go. Everybody in our company is part of the social media that we’re creating to reach audiences. Universal may not need our help marketing their movies but the smaller films, the independents, the alternative programming that’s enabled by digital cinema, absolutely we need to reach those audiences. They’re underserved, some of them have stopped going to movies a long time ago, we're bringing them back and when we do we’re introducing them to a whole new picture of what’s going on in the theaters, social media, the digital era we now live in, what we’re working to use to change the equation and to move the needle with Facebook, and social media of every type.
AT: How does Facebook work in this regard? How do you work with the studios?
MJ: I come from a studio background and the film category is the first category … We’ve done a really good job of becoming fundamental and foundational for how studios market their films. We always think of our studio as a distribution platform... This is the beginning of the company. You see whether it’s building awareness 12,13 weeks out to the week of release--I’m really proud of the way studios are leveraging what we do. We’re not part of every bit of the conversation... We work really closely with Adam and his team, we’ve become part of the mix... The idea, especially films people may not know about, there is social currency in saying you saw a film and you liked a film. There is value in that and that’s part of human nature.
BM: Exhibition needs to be part of this. We’re talking about Facebook, Twitter and all the other social platforms, but we as exhibitors need to become part of that platform.... We need to nurture that relationship and bring them back, and we’ve got the tools to do it.
The fabric of what we’re building at Digiplex: we’re looking to be in all the top markets of the US. We want a presence to be able to interact with audiences throughout the US and to pinpoint what they're looking for, understand what it is, the Amazon model, and a very big part of where exhibition needs to go is to peek at the future of exhibition because how you use these tools and how you communicate with audiences and sell out an auditorium...We can do that, too while we’re filling in the gaps around these major wonderful movies and still remain at the core of the business.