After six grueling years of struggling to survive, movie theater owners and operators finally arrived in Las Vegas for CinemaCon confident that they had a chance of survival. Recent blockbusters such as “Project Hail Mary” and “Super Mario Galaxy Movie” helped boost box office revenue, which had been stuck in a rut since the coronavirus outbreak, by more than 23%.
Despite the success, the annual exhibition industry conference also exposed the anxiety felt by many in Hollywood. Silicon Valley scion and soon-to-be mogul David Ellison dominated the conversation, with movie executives openly worried that the Warner Bros.-Paramount merger deal would give him too much power. There were also heated debates about everything from an overabundance of pre-show commercials to an overreliance on franchise fees. Here are five takeaways from CinemaCon, which had no shortage of drama.
A revolution that didn’t happen
As CinemaCon opened last week, opposition to Paramount’s deal to buy Warner Bros. seemed to be gaining more momentum. On Monday, 2,000 big stars, from Joaquin Phoenix to Javier Bardem to Kristen Stewart, signed a petition calling for the merger to be blocked. Hours later, exhibitors joined in the fight, with Cinema United chief executive Michael O’Leary in his opening remarks slamming the deal as anti-competitive and declaring it would lead to fewer films, fewer jobs and fewer theaters. However, the tide soon changed. On Wednesday, producers Emma Thomas and Jerry Bruckheimer were asked why they were not included in the opposition during their CinemaCon presentation, and they made it clear that they felt Paramount’s acquisition of Warner was a fait accompli, with Bruckheimer bluntly declaring that “the train has left the station.” And on the final day of the conference, Adam Aron, head of AMC Theaters, announced his support for the merger, giving Ellison’s team his support for the world’s largest movie theater chain. In doing so, Aaron belittled O’Leary, a fact that did not go unnoticed in Las Vegas and among other members of Cinema United, and an emergency meeting was called after AMC endorsed the agreement. So why did Aaron become a villain? Was he aiming to get better terms from Ellison’s two studios?Notably, Aaron downplayed the threat of Disney’s 2019 acquisition of Fox, a deal that would have resulted in one less studio and significantly fewer big-budget films on screens.
David Ellison’s Charm Offense
While not everyone may have bought into Ellison’s plan to combine two of Hollywood’s most famous brands, the owners of Paramount and (future?) Warner Bros. generated goodwill in their pitch to exhibitors. Not only did he promise to keep the combined studio’s output the same as when it operated independently, producing a “minimum” of 30 films a year, but he also promised a 45-day period of exclusive theatrical release and a 90-day period before movies would be available for streaming. Flex released an elaborate introductory video directed by Jon M. Chu, narrated by Tom Cruise, and featuring cameos by James Cameron, Timothée Chalamet, and Will Smith. The promotional piece ended with Cruise relaxing in the studio’s water tower and declaring, “The future is great. And the future looks pretty great from here.” Clearly, Ellison’s ambition knows no bounds. It’s worth noting, though, that the real hard work begins when he gets the keys to Warner Bros. and has to find a way to pay off its $80 billion debt.
Tom Rothman kicks the hornet’s nest
When he took to the stage at CinemaCon to announce Sony Pictures’ future direction, the studio chief had some candid advice for theater owners. “Get out of the crack of advertising.” Rothman’s point was to stop showing 30 minutes of commercials and trailers before the movie starts. Oh, please lower ticket prices…we’re in a recession. While he may be right that too much advertising is causing people to turn away from theaters or skip pre-shows altogether, what Rothman didn’t offer was a proposal for how movie theaters could make up for lost revenue. Movie theaters have thin profit margins, and chains make millions of dollars with promotions. Additionally, they continue to raise prices to compensate for declining attendance. One exasperated exhibitor said, “I wish Tom would have helped me pay.” “But thanks for the feedback.”
Now it’s the world of Super Mario
From “Street Fighter” to “Call of Duty,” Hollywood is betting its future on video games. As the popularity of comic book movies wanes, movie studios are picking up consoles in search of the next great IP. These range from global works like The Legend of Zelda to highly artistic works like the Japanese horror game Bloodborne, which Sony is turning into an R-rated animated film. Where movie stars once flocked to Comic-Con to gush about how it was their childhood dream to play Batman, The Flash, or Hawkeye on screen, now they’ll likely head to CES to wax poetic about their first Tetris experience. What else do you expect when “Super Mario Galaxy Movie” is on pace to hit $1 billion at the worldwide box office?
Director Steven Spielberg’s emergency warning
Movies like “Jaws,” “Jurassic Park,” and “Raids of the Lost Ark” set the template for summer blockbusters, delighting audiences with big-screen escapism, and spawning lucrative franchises. So when these movies hit theaters, it’s easy to forget that they were originals. Director Spielberg, who came to CinemaCon to build excitement for his alien adventure “Disclosure Day,” reminded studios and exhibitors that they need to embrace original stories if they want to keep auditoriums full. Movie fans can’t survive on sequels, spinoffs and reboots, he says. “If all we make is big name brand IP, we’re going to run out of gas,” Spielberg warned. If Spielberg’s message is to stick, Disclosure Day, Spielberg’s first summer blockbuster in 10 years, needs to be a huge box office hit. Executives who have seen the film say it’s surprisingly emotional and not as action-packed as you might think. Is that what the audience is looking for?
