NATO's John Fithian on What Went Wrong at 2014 Box Office, Netflix and 'The Interview' Debacle

On the eve of CinemaCon, the National Association of Theatre Owners chief opens up about the box-office turnaround and MGM's "panicked" decision to make 'Hot Tub Time Machine 2' available early on premium VOD.

This story first appeared in the May 1 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

National Association of Theatre Owners chief John Fithian will be a happy man when taking the stage April 21 at CinemaCon, the annual gathering of theater owners where Hollywood studios tease their upcoming movies. North American box office has made a dramatic comeback after a horrible 2014, with year-to-date revenue pacing at an all-time high of $2.91 billion through April 12 (thanks to American Sniper, Fifty Shades of Grey and Furious 7). And that's not yet including Avengers: Age of Ultron (May 1) and Star Wars: The Force Awakens (Dec. 18). On the eve of the convention, THR caught up with Fithian to talk about the turnaround, MGM's "panicked" decision to make Hot Tub Time Machine 2 available early on premium VOD and whether he invited Netflix chief content officer Ted Sarandos to Las Vegas.

What is the headline of this year's CinemaCon?

For me, it's the strength of the market in 2015 and 2016. Movies are becoming more spread out over the year: Just look at the great success of Furious 7 in early April, Fifty Shades of Grey in February and American Sniper in January, as well as family product including Cinderella and The SpongeBob Movie: Sponge Out of Water. This diversity gives us great confidence. I've been saying for years that studios shouldn't jam their big movies into the summer and holiday periods.

What went wrong in 2014?

We simply didn't have enough movies with broad commercial appeal. What we had did well. We had 10 fewer $100 million-budgeted movies in summer 2014 than in summer 2013 — 12 versus 22 — a 45 percent decrease that led to a 15 percent decline in summer revenue. That's the entire difference. It's not a problem we face this year. Indeed, we believe that 2015 will be a record-breaking year domestically and globally.

In December, Sony Pictures CEO Michael Lynton all but blamed major theater owners for having to pull The Interview, which then was released on VOD and in small indie cinemas. Is all forgiven?

Sony went through hell and suffered the worst cyberattack in history. I feel for them.

Windows continue to be a major point of contention. Without telling cinema owners, MGM recently made Hot Tub Time Machine 2 available on premium VOD only 46 days after its theatrical release. Does that open the floodgates?

I don't expect a precedent to be set by the panicked reaction of a distributor to squeeze a few dollars out of the home market before the movie is forgotten. Most distributors don't want to signal to consumers that their movie is a bomb.

Will your state-of-the-industry speech address Netflix and Imax's controversial deal to release Crouching Tiger, Hidden Dragon: The Green Legend simultaneously on Netflix and in Imax theaters? Most Imax operators say they will not play it.

I probably won't specifically. This was a one-off deal, and the response from exhibitors was immediate and predictable. The major studios continue to respect a robust theatrical window. And look at Radius-TWC's recent decision to forgo a VOD release for It Follows and go the traditional theatrical route once they realized what they had. They had put it in a few theaters, and it took off. I appreciated their decision very much — my hat's off to them.

Is Ted Sarandos invited to CinemaCon?

Our convention is open to anyone who wants to pay the registration fee. (Laughs.)