Companies across the industry increase collaborative efforts in confronting the (digital) challenges ahead

Digital cinema has brought a growing array of audiovisual formats and technologies—features like immersive audio, laser projection, panoramic screens, and motion seating—that has led to unique moviegoing experiences, oftentimes at higher ticket prices. As we approach the expiration of the virtual print fee (VPF) model, questions about the availability and sustainability of new advanced formats have been raised by the National Association of Theatre Owners (NATO) and other industry members. Their concerns include not only keeping tabs on digital cinema standards, but ensuring the affordability of new technology that can help grow the industry.

Paramount’s release of Ang Lee’s Gemini Man dominated the conversation in a cinema technology roundtable at ShowEast, held October 14–17 at the Fontainebleau Hotel in Miami Beach. The film, which had just premiered the weekend leading up to the convention, had enjoyed a lukewarm box office after a release that promoted its pioneering advanced-format credentials: shot in 120 fps high frame rate (HFR) 3-D. The overwhelming majority of theaters around the world weren’t equipped to exhibit it at its full potential, so Paramount worked with exhibitors to develop a suitable advanced-format alternative that could work for a large-scale release. Despite the tepid response from audiences, tech executives at ShowEast remained confident that HFR could eventually gain traction among moviegoers.

“There is still a perception today that HFR has a ‘soap-opera effect’ [i.e., it resembles video footage] regarding the way that the content looks,” said Andrew Poulain, director of worldwide cinema products at Dolby Laboratories. “Filmmakers have to learn how to use this tool to better engage their audience. I think that high frame rates are ultimately inevitable, tied together with other technology changes like increasing high brightness and display technologies.”

As cinema technology advances, the roundtable agreed that exhibitors’ views of new offerings had similarly evolved. “I’ve been in the general technology-leasing business too many years to mention, and technology was viewed as a necessary evil for years,” said Michael Vienhage, SVP and regional manager of CSI Leasing. “Now it’s beginning to be seen as a way to differentiate one’s offerings, and I think that’s how exhibitors will look at technology going forward.”

No longer that “necessary evil,” emerging technologies are now seen as either catalysts to raising the audiovisual standard or (more cynically) responsible for raising ticket prices. Communicating what exactly a tech upgrade brings, both to the exhibitor and its moviegoers, will become a bigger responsibility for marketers. “Putting ‘4K’ on a billboard doesn’t necessarily allow you to charge more for a movie ticket,” said Brian Claypool, V.P. of product management of global cinema at Christie Digital.

That doesn’t mean the technology isn’t worth embracing; a switch from xenon digital projectors to laser projectors, for example, simultaneously increases the picture quality and brightness levels and lowers overall energy costs. “The real benefit of laser isn’t going to be its wider color gamut or higher frame rates, but the fact that you’ve got a consistent, high-quality, and bright image that’s actually more affordable for your cinema,” said Todd Hoddick, chief revenue officer at Cinionic.

Tony Adamson, SVP of strategic planning at GDC Technology of America, agreed with that sentiment—adding that caveat that marketing any technology investment is important for exhibitors. “I’ve seen laser [and xenon digital projection] side by side, and where the consumer gets stuck is that I don’t think they really care,” he said. “They’re here to see a movie and I don’t think they care about what the light source is. I think it’s incumbent on the exhibitor to market the difference … to educate and let [audiences] know that things are changing.”

Another ShowEast session, on broader marketing challenges, addressed the influence of social media on digital ticketing, and in particular the benefits (or not) of a title-driven marketing strategy. Promoting studio content, after all, doesn’t necessarily build awareness of any one cinema chain. In this age of expanded amenities and premium cinema experiences, distinguishing one’s own cinema has become nearly as important as promoting the upcoming weekend’s new releases. “Let’s face it, the consumer is going to find the studios’ content; it’s exciting and they’re going to respond to it, and you have to promote your own amenities in addition to that,” said Valerie Shortall, V.P. international marketing at Cinemark. “It just depends what that experience is. You have to examine these markets individually and how to get your messages through in conjunction with the studios’ content.”

Engaging with moviegoers online has become a priority for many of the companies who provide services to exhibitors. A prime example is national cinema-advertising leader NCM, which communicates with a mass movie audience every weekend through its pre-show. “For the past few years we’ve moved beyond and rebranded our pre-show to take a much greater B2C focus,” said Steve Ochs, SVP of marketing and creative at NCM. “We have a scaled audience of 700 million moviegoers going through our 20,000-plus screens every year, so we’re constantly asking ourselves, how do we talk to them on a regular basis? How do we drive them to the exhibitors’ experiences?”

While social media platforms represent the most visible digital front in the marketing battle for viewers’ attention, older tools like email marketing have made a resurgence thanks to the rise of big data. “It’s a channel that remains incredibly relevant in specific targeting, because you know in advance what these customers want to see, and that data becomes extremely relevant,” said Cinemark’s Shortall. “If you don’t have an email-marketing platform, I suggest you get one, as you’ll see an automatic uplift [in sales]. It’s a weekly exercise aimed at loyalty customers. It’s all about tailoring different messages to different people.”

“It has to be targeted; the days of mass emails are over,” agreed Mark Malinowski, V.P. of global marketing at National Amusements. “We’ll look at three to four emails per week, each with different messages, to the same audience every week. We target other emails to bring customers over to our loyalty program and site; it’s all about delivering a specific message to a specific customer.”

All these avenues of communication lead to the same goal: increasing digital ticketing transactions. That part of the equation is at the center of the efforts of companies like Atom Tickets and Fandango, who specialize in bringing innovative e-commerce solutions to exhibitors. Max Lynn, V.P. of corporate development at Atom Tickets, believes movie ticketing is following in the steps of ecommerce to become a mobile-native experience. “[We] decided to tackle mobile ticketing from the standpoint of ecommerce,” he said. “We asked, how do we get people from [content] discovery into theaters as quickly as possible? That’s why we invested heavily from the perspective of the social conversation from the ground level: What are my friends talking about [seeing]? And how can we reduce the friction [of ticket buying] as much as possible when three-plus friends are involved?”

Tackling mobile ticketing as an ecommerce solution, Fandango has expanded its ticketing operations beyond its own website and app to include other web publishers popular with consumers. “Our goal at Fandango is to be where the customer is,” explained Melissa Heller, V.P. of domestic ticketing. “From a typical ecommerce standpoint, we’ve done integrations across the board—from Google to Apple—we’re not trying to change your buying behavior, we’re trying to convert you [to purchase] where the customer is or where they might be.”

Not all tech innovations come with an immediate adoption rate, however. While voice-activated ticketing through virtual assistants like Amazon Alexa and Apple’s Siri have been available for over a year, they haven’t caught on in a significant way. “It’s really about ‘test and learn’; you don’t know which of the 10 new things around the corner will work—but as a technology company, you have to be there,” said Atom’s Lynn. “Our Amazon Alexa skill was the first to enable reserved seating. Do a lot of people use it? Not really. Will they? Perhaps … sometimes you just have to take a leap of faith [on new technology], while ensuring that the ecommerce app maintains that fidelity across the website and mobile app. It’s often a case of blazing a trail, seeing if it works, and waiting for the use across channels to follow from that.”

This spirit of innovation and collaboration among competitors in digital ticketing and cinema technology signals a change in the business culture that is also spreading among exhibitors. As new challenges to the business emerge, initiatives like the Global Cinema Federation (GCF) have helped bring competitors together in an effort to better tackle mutual concerns.

“To some extent, [exhibitors] were not informed enough in several countries on what was happening elsewhere and what we could do about it,” said Eduardo Acuña, head of Americas at Cinépolis, during a panel session featuring members from the GCF. “There are great associations like NATO and UNIC, but in the rest of the world most exhibitors didn’t know what was happening. It made sense to join forces in an effort to inform and educate our fellow exhibitors on what’s happening in other countries and how that can affect us.”

Among the issues that have become top priorities for the GCF are international trade and investment, movie theft, music rights, accessibility, and last, but certainly not least, theatrical exclusivity.

“It’s absolutely, if not number one, a top concern for exhibitors everywhere across the globe,” said Jackie Brenneman, general counsel and director of industry relations at NATO. “Because we are a trade body and have the world’s largest exhibitors in the same room, we can’t internally discuss or externally advocate for any specific window—at all. What we can do is collect meaningful data, and good data tells stories … using that kind of publicly available data, we can start to do real advocacy and education work that’s appropriate within the constraints of competition law, which we take very seriously.”

That sharing of data has helped international exhibitors learn from each other’s success stories. From decreasing the rate of movie theft in Canada to learning about negotiations with distributors about the theatrical window in the U.K., this collaboration has led to better-informed decisions at circuits around the world. It helps establish a standard that can address mutual goals and concerns simultaneously.

When it comes to cinema technology, that level of collaboration among exhibitors is precisely what John Fithian, NATO president and CEO, suggested in a recent Boxoffice Procolumn (“It’s Time for Theater Owners to Reassert Leadership on Cinema Technology,” September 2019). At ShowEast, the technology executives on the industry roundtable seemed open to a closer rapport with exhibitors. “It’s up to us tech vendors to keep our technologies relevant and bring them to bear, but I’d like to see the industry coming together … to tell us what is important so we can build technology that is relevant to the cinemas. The exhibitor’s voice is critical to this,” said Wim Buyens, CEO of Cinionic.

Whether it was international trade, advanced formats, or emerging e-commerce solutions, ShowEast 2019 revealed that continued success for theatrical exhibition depends on the collaboration among exhibitors and the companies that help them bring the magic of the movies to audiences worldwide.