Gross Behavior: It’s All Business in Showbusiness

Cinemacon, the annual convention of movie theater owners, gets underway Monday in Las Vegas. And you might want to ask that age old Eskimo truism: Why is this Cinemacon different from all other Cinemacons?

Well, for starters, it looks pretty much like any recent iteration of this event. This is the second year it’s been based at the Caesar’s Palace and with a larger venue comes a lot more walking than when it was housed at Bally’s and the adjacent Paris. The former locale was comparatively intimate and I’ve yet to find other than organizers who prefer the new digs.

Regardless, the guts remain the same.

There’s still no logic to a full day of events Monday followed by the official opening Tuesday morning with state of the industry addresses from both the National Association of Theater Owners and the Motion Picture Association of America. The rest is taken up by panels, screenings, endless award presentations, a trade show and a string of repasts sponsored by studios, independents and a myriad list of technical, strategic and data suppliers.

There are also a lot of business meetings between the majors and the dwindling number of significant movie circuits; NATO exec sessions and the continuing brainstorming meetings about conversion from analog to digital projection that remains a life and death issue for the majority of attendees that operate 20 or fewer screens.

The emphasis, as always, will be on the superficial. I hate to invoke Disraeli for the umpteenth time who when asked what got under his craw said: “the three things I hate most are lies, damn lies and statistics.”

Both NATO and the MPAA will spin current ticket sales along with lofty trend research analysis to paint a picture of a healthy, expanding audience. There will no doubt be some mention of the decline of both revenues and attendance in 2011 … but the inevitable conclusion will be that it was no more than a hiccup and when one looks at the long term picture – let’s say for argument sake the past decade – the audience has grown.

You can’t quarrel too much with the broad strokes served up at Cinemacon. I can trot out data that would buttress NATO’s argument as well as the fact that the movie going boosts of the past decade, or two, or three lag behind the proportional rise in the general population.

So what?

For anyone with a scintilla of curiosity it’s obvious and historic that an underlying tension informs the relationship between the people who own and operate movie complexes and those that supply them with the material to project onto a screen. The only thing that’s change since the Paramount consent decree of 1948 that divested the studios of their theater ownings is the degree of their animas. Presently the tilt is on the other side of the scale from conviviality.

One thing that rankles the Hollywood majors is the arrival of the Open Road distribution company that’s financed by the nation’s two largest theater circuits – Regal and AMC. One senior studio executive barely held back on spitting when that label’s The Grey was the top grossing film on its debut earlier this year.

There is no prid quo pro presently. Not long ago the studios were angling to increase minority stakes in the theatrical arena. Among others Universal was a significant presence at the now defunct Cineplex and Paramount owned Canada’s major theatrical circuit Famous Players. But two decades back the effects of a construction boom went bust and virtually every movie chain went into Chapter 11 bankruptcy protection. Add to that a decade of costly conversion to digital projection systems and one can appreciate why the majors sold off their holdings and investments rather than wait for healthy dividends somewhere down the line.

Now add a soupcon of profit assessment. Very few major movies go into profit from theatrical exhibition. However, that initial exploitation has a direct impact on ancillary revenues including DVD sales as well as video on demand and cable broadcast. It doesn’t help that theatrical revenues return 50₡ on the dollar while subsequent forms of exploitation render 70₡ or more.

Ideally the majors would like to find that perfect balance in which the shortest period in movie theaters will be offset by the largest return in ancillaries. Not surprisingly theater owners view such a scenario as detrimental to their health. A shortened theatrical “window” has already raised the prospect of boycotts and if tentpole and franchise movies lose access to significant venues their $250 million investment is headed for a nine-figure write off.

So each side has nuclear weapons to employ if so disposed in this frigid war.

There’s another recent disturbing element that cuts across both sectors. That’s the seeming erosion of the 18-to-25 year old audience that was the single biggest factor in 2011’s box office downturn. Again, the official posture, if any, will characterize this as aberrational. And if one is willing to view such bygone fads as television and VHS as momentary speed bumps it would be futile to take a contrary position.

But if this is indeed some societal shift there’s considerable meat to chew on. For starters the gestalt of movie production and the targeted audience has been that demographic for at least 30 years. They constituted the largest segment of ticket buyers, they went most often and they wanted to see the hot new movie on opening day. Those huge box office openings fairly made the industry giddy and unless one had the heft of a Spielberg, a more nuanced movie wasn’t going to receive the sort of nurturing necessary to build an audience.

The issue not being addressed boils down to something akin to what happens if there’s a break in the chain. As part of the last generation that grew up on the neighborhood movie theater, I can recall developing the movie habit initially from parents and siblings that chaperoned me to the new spectacle or western or whatever. Just suppose that the current generation doesn’t provide its spawn with the movie going bug. It conjures up something akin to an inverse snowballing effect and if that bigger picture doesn’t send a chill through the industry we’re well on our way to oblivion.

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