Jeffrey Katzenberg: ‘We Blew It on 3D’

Dreamworks Animation CEO reflects on future of Cinema at CineEurope

BARCELONA — Jeffrey Katzenberg may be standing down from his top job at DreamWorks Animation. He was still, however, the star at the first day of Barcelona’s CineEurope, where he talked on a panel addressing The Future of Cinema, and then showcased DreamWorks Animation movies, which excerpts from “Trolls” and “Boss Baby,” both unveiled last week at Annecy.

Katzenberg did not mince his words. “Unfortunately, we blew it on 3D,” he said.

“It was a game-changing opportunity for the industry. When you gave them an exceptional film that artistically, creativity embraced and celebrated the uniqueness of that experience, people were happy to pay the premium,” he recalled with a note of sadness, citing “Avatar,” “Monsters vs. Aliens,” and “Life of Pi.”

But other producers had “taken the low-road and gimmicked it. Instantly, we lost good will.”

Some of that may be made up by “Avatar 2,’” he added.

The world had 74,561 3D screens in 2015, according to the European Audiovisual Observatory. But worldwide box office from 3D films was $7.8 billion, 20% of the total, according to analyst David Hancock, at IHS Technology.

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On a farewell tour, Katzenberg bade goodbye to CineEurope and received only its second lifetime award on Monday. Talking at the panel, however, his mind was on cinema’s future.

“Audiences have told us loud and clear, bigger is better, large format is clearly moving people because they want a bigger experience in terms of large screen, great sound, great projection” and “will pay a premium for a premium experience,” Katzenberg said.

Big screen is “not a gimmick,” he added, saying it can benefit even “small intimate movies” and citing the example of how the sports business has been able to offer a premium experience to spectators. “Attendance at sports has never been as high,” Katzenberg commented.

Whether bigger can be better for all of Europe is a moot question, however.

There’s a move towards premium large formats in cinema exhibition in the U.S. and Asia, said David Hancock, at IHS Technology.

But “In Europe, we have a different market segmentation, including arthouse cinema, which isn’t so much part of the North American market.” So Europe also needs to pursue premium small format solutions, “a feeling of exclusivity, luxury, service comfort which doesn’t necessarily revolve around a big screen.”

Held on the first day of CineEurope, The Future of Cinema round-table also inevitably took in Netflix and other digital operators.

“People who love movies, love movies. There was a piece of research [cited] at CinemaCon last year that showed that people who have the most digital devices are actually those who attend the movies the most,” said Jan Bernhardsson, CEO of the Nordic Cinema Group, the largest cinema operator in the Nordic and Baltic Regions. NCG has a subscription-based product. 70% of its clients also subscribe to Netflix.

But, Bernhardsson argued, in such a fragile business, exhibition companies should not abandon cinema release windows until they know another economic model was in place.

Katzenberg went much further, pointing out that sports, despite spiking attendance, has never been more viable on every single device.

“Protecting that [movie] theatrical experience does not succeed by denying customers access,” he said.

Panelists — who also included Odeon Cinemas’ CEO Paul Donovan and Carmike Cinemas’ David Gassman — also suggested that traditional market strategies should be re-examined, taking a leaf out of the books of digital operators and incorporating big data.

“The reason that Amazon knows better than my wife what I want on my birthday is because of big data,” said moderator Michael Gubbins, at London-based consultancy SampoMedia, suggesting bigger exhibition companies could make better use of it.

Nordisk Film and Cineplexx International founder Christian Langhammer will be honored with the Independent Film Award and International Exhibitor of the Year Award respectively. Rodolphe Buet, head of Studiocanal intl. distribution and marketing, will receive the international distributor of the year award.

CineEurope 2016 runs June 20-23 at the CCIB (Barcelona’s International Conventions Centre) and is organized in collaboration with Prometheus Global Media.

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