Boxoffice - October 2015

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COMMUNIQUÉ by Patrick Corcoran Vice President & Chief Communications Officer, NATO Somewhere over the western United States on the one American Airlines domestic 757 not equipped with Wi-Fi. No, really. n With a week left in summer by the calendar, but two weeks past its end according to the movie business, Los Angeles has gotten its first rain in months and the sky is a painful, fresh-scrubbed blue. L.A. always looks like a new place after the rain, but one of the literally dirty secrets of our town is that the cleansing rain washes months of accumulated grime, oil, tire rubber, and assorted debris off the streets and sidewalks straight into Santa Monica Bay. Large swaths of the otherwise cerulean bay are muddy brown as I fly over it on my way to Dallas for CineShow—the first under the new TOMA regional umbrella—and in the few hours since the storm, the incoming waves and outflowing storm drains have herded a line of debris a mile or so offshore. It’s mostly tree branches and other lightweight castoffs, but as anyone knows who has lived here long enough, you can probably also find shopping carts, car parts, spec scripts, and failed business plans. No matter how sunny, nobody will be swimming this week. The summer box office has had a similar cleansing effect on industry talk about the movie business. Fearful comparisons to earlier movies and earlier summers littered the trades as Avengers: Age of Ultron failed to set an opening weekend record. See my July column in Boxoffice for the tiresome litany of unmet (and unreasonable) expectations. Or you can look at what actually happened throughout the long summer. That disappointing opening week for Avengers 2? Up more than 50 percent over the same week in 2014. Jurassic World, on the other hand, defied even the most optimistic expectations with the biggest opening weekend ever and vaulted into all-time second place domestically and internationally. It was still playing on 1,100 screens in mid-September, having grossed $650 million domestically. Trainwreck and Straight Outta Compton demonstrated the box office strength of movies not aimed at 15-year-old boys, and analysts once again proclaimed themselves amazed that women and African-Americans will turn out to see movies and were further shocked when they reached even broader audiences. Anyone who saw the reaction to Compton at Cinema- Con knew we had a monster hit on our hands. In addition to those four movies, eight others topped $100 million at the summer box office: two animated family movies, Inside Out and Minions; spy thriller Mission Impossible: Rogue Nation; two other female-led comedies, Pitch Perfect 2 and Spy; one more superhero in Ant-Man; and actioners San Andreas and Mad Max: Fury Road rounded out the summer. That brings to 19 the number of $100 million– grossing titles so far in 2015, 20 if you count American Sniper, which expanded to wide release in January. The tentpole effect remains central to summer success, with those 12 movies accounting for close to $3 billion of summer’s revenue. The remaining titles accounted for roughly one-third of summer revenues, at approximately $1.5 billion. The result of all these offerings was the second-highest-grossing summer in history, with $4.48 billion in tickets sold—a 10.4 percent increase over last year. Only summer 2013 was higher at $4.75 billion. Admissions, too, were higher, with perhaps approximately 530 million admissions. We’ll need to wait for a Q3 average ticket price to know for sure. A week-by-week comparison of summers 2015 and 2014 accompanies this column (along with proof of no Wi-Fi signal). The movies bring customers to our theaters, but it’s what we do then that keeps them coming back. After two months up in the San Bernardino Mountains for summer camp, my 16-year-old daughter was anxious to see Jurassic World, and it was playing at a sub-run house in the San Fernando Valley in mid-August. It had been a sub-run for years. Twenty years ago, my mother-in-law used to take my son there for a couple of dollars per movie. When she came home from the movie, my daughter told me the movie was fun, but she absolutely lit up when she told me about the theater. “That was the most comfortable seat I have ever been in, in my life,” she said. “And then I put the foot rest up. Oh my God!” So. A teenage girl in the most media-savvy market in America, who has been around the movie business 20 BoxOffice ® Pro SEPTEMBER 2015
her entire life and considers high-speed Internet and Netflix her birthrights, could not stop talking about the comfy seats. Sometimes, we really don’t know anything. But our customers do. When we consider the customer experience, we often talk about immersion, but that consideration is limited. Stadium seating gave our customers the best sight lines they had ever experienced. The days of craning your neck to see around the person in front of you were gone. Digital projection meant a flawless visual experience. Every time. Giant screens and immersive audio further created an all-encompassing experience. But let’s take a closer look at that experience. As theater owners, we privilege the theatrical experience, always citing the size of the screen and the communal experience, but is that the full extent of what we offer? Before we answer that question, let’s consider what the home experience offers. There are three things that the home entertainment experience offers, to my mind. Convenience. This is obvious, and has been the case for 60 years. It’s right there, a click or two away. No argument there. Price. In many ways, the home experience is already paid for, whether it is a cable subscription, broadband access, or a subscription VoD plan. Control. This, I think, is the most compelling argument for the home experience. You choose. What you watch. When you watch. How loud it is. Pause. Rewind. Click back and forth between channels. Text a friend. Call them on the phone (OK, I’m old.) Besides the quality of the experience, movie theaters offer their customers something unique—surrender. We ask our audiences to give themselves up to an experience that is not under their control. It starts and stops on a schedule set by the filmmaker and the theater. If you are here, you are here on our terms. There is a real value in that—it is, I think, a purer experience, but it requires trust, and execution. This is where the comfy seats become much more than merely comfy seats. That comfort sets a mood and builds trust. It prepares the audience for anything. “Sit back. We’ll take care of you.” That is why customer service is so important. Not just for the simple pleasure of being catered to—though that is important. Rather, the feeling of trust, of comfort, prepares the audience for the movie. The movie is better for the experience. But there is debris offshore, and the surf can be hazardous. To industry analysts, every home offering that tries to incorporate some simultaneous or near-simultaneous theatrical element in its distribution plan is the newest threat to theatrical exhibition. But these analysts always leave out the most important element in what new distribution scheme will change theatrical exhibition forever, and that is the simple fact that the overwhelming majority of theaters simply don’t play those movies. A high of about 350 screens is the widest release that any of these hybrids have attained. When you consider that there are 40,000 theater screens in the U.S., the inconsequential nature of these experiments becomes clearer. How is exhibition changed by what’s playing on seven-tenths of one percent of our screens? This summer? For exhibition, the water’s fine. n It was a great summer of Amy Schumer as her Trainwreck snuck past the $100 million mark in domestic grosses. OCTOBER 2015 BoxOffice ® Pro 21
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Boxoffice - October 2015

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