BoxOffice® Pro - November 2011

EXECUTIVE SUITE (continued from page ##)
Frame rates and laser projection were on the agenda as two technologies
that offer the possibility of improved quality but challenging
business models. And of course 3D remains an important technology
discussion point. A reinvigorated NATO Technology Committee
will address all of these issues in the coming weeks and months.
As NATO made clear in a recent report to its members, the end
of film is near and every exhibitor must finalize their own plans
to convert to digital, or make the decision to exit the business. The
NATO meetings in Washington served to remind members of all
the complicated issues at stake, as well as the resources available to
navigate through those challenges.
the association focuses on outreach.
Members discussed the most significant development of the year—
the test of four studios with so-called “premium” VOD with DirecTV.
Those gathered concluded that the test has been a failure for the
studios, and expressed their gratitude for the members of the creative
community who spoke out in support of the theatrical experience.
In a moment of déjà vu, however, Universal Studios announced
in the middle of the NATO meetings their intention to conduct a
PVOD test with an extraordinarily short window in two markets:
Atlanta, Georgia and Portland, Oregon. As this column went to print,
the issue remained unresolved. (Given the fact that the DirecTV
announcement was made during CinemaCon, and the Universal
suggestion was made during NATO’s annual meetings, one exhibitor
joked that perhaps NATO shouldn’t meet any more!)
The news about Universal served to reinforce the priority attention
given by the association to the issue of windows. During its
meeting, the Executive Board confirmed its intention to dedicate the
resources necessary to continue the industry’s outreach to the creative
and financial communities, and to the broader public, as well.
DIGITAL CINEMA ROLL-OUT ACCELERATES
During the discussions of the NATO Advisory Board, in select committee
and task force meetings, and during informal chats at the receptions
and meal functions, digital cinema remained a significant
focal point. NATO staff presented data on the pace of the roll out
and the strength of 3D. Independent operators discussed issues of
concern to them, including the continued activities of the Cinema
Buying Group. The Advisory Board meeting included a productive
conversation between the Department of Justice, NATO staff and
lawyers, and volunteer member leaders regarding the inclusion
of technologies for the deaf and blind within the broader digital
cinema roll-out.
Technology always constitutes an important part of the NATO
discussions, and this year was no different. Members examined the
issue of satellite delivery and the current work to develop an open
delivery utility that can be used by all suppliers and all exhibitors.
MOVIE THEFT COMPLICATES BUSINESS MODELS AND
STIMULATES VARIED REACTIONS AMONG EXHIBITORS
In advance of the annual meetings, NATO staff and volunteers on
the association’s Membership Committee conducted and analyzed
a survey of members. (The survey, which reflected strong member
support of the association and its activities, was discussed during
the meetings. Members seeking more information should contact
the NATO offices.) One finding of the survey surprised the association’s
president. When the members were asked to establish the
relative priority of a list of issues, windows, d-cinema and government
relations issues appeared in a group of top priorities, while
movie theft appeared in a lower group of mid-level priorities.
Data suggests that exhibitors in the U.S. lose $700 million or
more in ticket sales every year because of pirated movies. And
that data is six years old—it predates Transformers, The Dark Knight
and Twilight. The MPAA has conducted newer research and the
association hopes to have the results soon. It is likely, though, that
the number has grown and domestic exhibitors may be losing ten
percent of their business to theft. Given the magnitude of the economic
impact, contrasted with the mid-level interest of industry
leaders, NATO has some work to do in terms of member education.
At the annual meetings, movie theft constituted a priority. In
addition to the lobbying efforts, the members also discussed the
rewards program, patron notification methods, detection technologies
and other related issues. NATO’s Executive Board established a
task force of members to examine new detection technologies and
discuss possible models for implementation.
GOVERNMENT RELATIONS ISSUES CONTINUE TO
COMMAND ATTENTION
In addition to the lobbying on movie theft legislation, other government
relations issues were discussed at the annual meetings.
On the federal level, NATO continues its work to reduce payment
card processing fees, to affect pending rules regarding menu labeling
requirements, to prevent or soften the burden of new labor
relations rules and to change rules that prohibit the use of laser
projectors in cinemas.
NATO also coordinates with various regional units across the
country. The regional unit leaders also met in Washington to discuss
such state and local issues as admission taxes, beverage taxes, minimum
wage requirements and more.
The breadth of topics discussed during the week in Washington
simply exceeds the space limitations of this column. Any member
or industry supporter who desires more information should contact
the NATO offices. For now, the NATO staff thanks the many members
who journeyed to our nation’s capital for the meetings.
12 BOXOFFICE PRO NOVEMBER 2011