Video-on-demand represents significant growth opportunitiy for exhibs
The annual exhibitor conference CinemaCon began Monday at Caesars Palace in Las Vegas with one take on a contentious issue: How much involvement should theater owners have in the digital business?
Universal Pictures prexy of international, David Kosse, who delivered the keynote address kickstarting the confab’s International Day, advocated that exhibitors strike while the digital iron is hot and partake in video-on-demand and other digital distribution platforms.
“You know best how to reach your consumers,” Kosse said, “and now is the time for exhibition to be in the VOD and digital business.”
Kosse later explained that he was not advocating that theater owners embrace any collapsing theatrical window; rather, exhibitors should “cooperate and collaborate so they’re part of the eco-system.”
“I think the (digital) business has massive room for growth,” Kosse added. “I also think exhibition is in a really unique position to benefit from that.”
Some theater chains outside the U.S. have strong investments in the digital space, including Canada’s Cineplex Entertainment, which offers a digital-theatrical ticket package via its company-owned cable provider. AMC and Regal have toyed with the “superticket” concept on films including “Anchorman 2″ and “World War Z.”
Alejandro Ramirez Magana, CEO of Mexico’s largest theater chain, Cinepolis, broached the digital issue during an afternoon panel moderated by Variety‘s Steven Gaydos. Last year, Cinepolis launched a digital platform for both subscription and transactional VOD.
Ramirez Magana said the digital streaming and VOD sectors have become more competitive among exhibitors.
For Kosse, who also spoke about TV occupying a bigger space in home viewing, digital downloads for film represent a prime opportunity for exhibitors since VOD still represents a “nascent” part of the industry.
Global theatrical admissions reached 7 billion in 2013, according to Kosse, while VOD transactions totaled 350 million worldwide.
“Exhibitors have a huge understanding of who buys what,” Kosse said, adding that theater owners should apply that knowledge to digital. “Why wouldn’t exhibitors go after that business?”