Exhibition Business Confronts a World of Change

For the six major studios, the business of going global is anything but a foreign concept.

International potential was the bright spot at CinemaCon in Las Vegas last week for studio executives and industry leaders, confronting flat admissions and diminishing interest in 3D on the domestic side, as well as an abrupt decline last year in the number of frequent young moviegoers.

For the first time at the confab, which gathered more than 5,000 exhibitors, distributors and studio execs from some 70 countries, the opening presentation focused on the top-grossing films worldwide, touting 2013’s $25 billion in grosses, up 4.6% over 2012.

The ever-increasing global spotlight was evident in everything from the films previewed to the evolution of satellite distribution to the addition of theaters in emerging territories.

“There is no way to compartmentalize our audience by any language or border,” said Veronika Kwan Vandenberg, president of distribution for Warner Bros. Pictures Intl.

MPAA chairman Chris Dodd pointed out the potential from two rapidly expanding countries, Pakistan, which
has seen an approximate 400% increase in number of screens since 2005; and Cambodia, with a roughly 1,800% rise since 2011.

And although box office contributions from those territories are nominal, the overall potential growth in countries outside mature markets is significant, with the Asia Pacific region — thanks to China — topping the international B.O. for the first time last year.

Indeed, China’s box office continues to surpass that of nearly everywhere else, growing 27% last year to $3.6 billion — the first time a foreign market has eclipsed $3 billion, per the MPAA. “(China is) building 13 screens a day, so they’re probably at three now already today,” joked Walt Disney Studios chairman Alan Horn during the studio’s presentation.

With 70% of box office revenues coming from international returns, much of that on tentpole releases, the studios’ previews were heavy on special-effects extravaganzas and sequels, product that plays strongly overseas. Fox’s “X-Men: Days of Future Past,” Warner Bros.’ “Godzilla,” Sony’s “The Amazing Spider-Man 2” and Paramount’s “Transformers: Age of Extinction” were among the clip brigade. Though “Star Wars” looms as a summer 2015 behemoth, Disney held off on major announcements for the seventh film in the series.

From Dodd to “Interstellar” director Christopher Nolan, bizzers extolled the benefits of seeing films on the bigscreen, though NATO’s John Fithian raised eyebrows when he admitted to wanting a more private experience for the emotional “12 Years a Slave,” which he viewed at home.

To counter the couch-potato impulse, new technologies aimed at luring moviegoers to theaters. These included the Escape wraparound screen system from Barco, and CJ Group’s “4D” theater with wind, rain and scents.

Exhibs are also high on potential business expansion, with one such initiative, the Digital Cinema Distribution Coalition, backing alternative programming and films delivered to theaters via satellite.

“This is the most exciting time to be in this industry, because we’ve come together to solve one of our greatest challenges,” noted Tim Warner, CEO of Cinemark,one of the initial partners of DCDC, speaking about the limits of traditional distribution methods.

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