The Delta Variant, streaming wars and surging piracy loom large as CinemaCon launches Sunday at Caesars Palace in Las Vegas, the first in-person gathering of theaters owners and Hollywood studios since the pandemic struck 18-months ago. The virus has slashed registered attendees to circa 2,000 from 3,500 pre-pandemic, with a sizeable European contingent entirely shut out by U.S. travel restrictions. The annual gathering, where studios showcase first-look clips of upcoming films plus select stars for cinema owners, hits at a crossroad for exhibition as it struggles back from the brink. NATO President & CEO John Fithian and MPA Chairman-CEO Charles Rivkin fielded questions from Deadline on the evolving relationship between the two camps and future of their industry. (Some responses are condensed and edited for clarity.)
First, with Delta spreading, did you consider postponing CinemaCon or going virtual?
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FITHIAN: We in the movie theater business are about people sitting in a big auditorium. Yes, attendance will be reduced, but that’s okay. Top studio executives are coming but saying to their teams, ‘If you have a particular risk and that means you don’t want to travel, stay home.’ Most NATO staff is going. The biggest challenge is the international folks. We lost almost all of them from travel restrictions. That’s like 900 -plus people.” (There’s another chance to meet up at CineEurope, set for early October in Barcelona.)
RIVKIN: “After nearly a year and a half of not traveling, I’m excited to go back to Vegas for this important event in our industry and look forward to sharing the stage with John Fithian for our annual State of the Industry address on Tuesday. NATO has done a great job planning for it despite the challenges and has worked hard to ensure a safe visit, adhering to all current health and safety protocols and proof of vaccination.”
It’s been a grueling time. What’s your takeaway from the last 18 months?
FITHIAN: “The evaluation from 35,000 feet is that exhibition is surviving the biggest existential threat it has ever confronted. What we happily realized is that people still want to come out and see a movie. Exhibition has been challenged before. But the pandemic is the first thing that just shut us down. The takeaway success story is that everyone in the industry worked collaboratively so the movie-going experience could survive this existential threat. Not just our members, who lobbied the government and came together, but our studio partners and creatives.”
“No doubt the advent of streaming platforms by many of our major content suppliers has complicated things. But it is absolutely the case that throughout the pandemic the MPA and its individual members rallied in support. We had studio executives calling members of Congress. Charlie Rivkin and his team were lobbying side-by-side with us. He called more than 25 different governors. On the creative side, we had over 100 directors sign a letter to Congress. I’ve been lobbying for 30 years and that has never happened.”
RIVKIN: “I think moving forward we can expect big wins and some setbacks, but overall, I am confident we will all come out of this stronger than ever.” He’s immensely proud of the health and safety protocols “collectively established by the studios, unions, guilds, and public health experts during the earliest days of the pandemic that made it safer for hundreds of thousands of production workers in the U.S. to get back to work and created one of the country’s safest work environments, resulting in some of the lowest positivity rates of any industry.”
But what about Delta? New York City, Los Angeles, San Francisco and New Orleans have imposed a vaccine mandate for indoor entertainment.
FITHIAN: “We’re dealing with Mayor De Blasio on the vaccine requirement. We didn’t oppose it. The requirements will reduce ticket sales, because we saw that in France and Italy. But the good news is that it gets people to get vaccinated. Our message is pretty involved: there needs to be an exception for kids under 12, and the Mayor has said that will be part of their implementation. And we also need help with phasing it in carefully and being able to train staff.” (He said NATO also wants to discuss the option of eliminating the mandate if the vaccination rate in an area reaches a certain level.)
“It’s a bit of a roller coaster getting out of this pandemic. The Delta variant has changed some consumer attitudes. But we’re still at a much higher level of consumer confidence than last fall or winter. It’s not as good as it was a month ago, but better than six months ago. We’re on the path of the recovery. This is a short-term downturn.”
Meanwhile, the theatrical window remains in flux. Both sides are working it through?
FITHIAN: “We have survived this pandemic together so the family is still the family although we may have our arguments over the lunch table. They are about how movies are released and whether it makes sense for them to come to theaters in an exclusive release before streaming. What the streaming wars have done is distort the business, if the only goal is driving [subscribers]. And I will say that two things happened together, heated up, at the same time, the pandemic and streaming. It was clear that movies couldn’t be released in theaters [at the height of the virus]. But we needed content once we reopened. Pandemic release models are one thing, but we are coming out of the pandemic.”
“What the exact window will be is between exhibitors and distributors, but the idea is that some robust period of a window will exist theatrically coming out of the pandemic. We just really hope the streaming wars don’t distort that. This is an industry where we all fight for the best business models. Streaming is not a disagreement, it’s a discussion. We are trying to figure out where the industry is going. It should not overshadow the amazing partners that theater owners had during the crisis.”
RIVKIN: “Streaming is obviously an important part of our industry’s ecosystem, and it had an incredible year last year with subscriptions passing one billion globally for the first time ever, according to the MPA’s 2020 THEME Report. Theaters have been and continue to be an important part of that ecosystem. I’m confident that audiences will continue to return to the cinema, and that theatrical and streaming will thrive together. Even though people enjoy home cooked meals, they also like to go out to restaurants – the same applies for home entertainment and theatrical experiences.”
(Neither would address specific companies. Disney most recently generated a major row after its simultaneous theatrical and streaming release of Black Widow, prompting a lawsuit by Scarlett Johansson and angry press release from NATO decrying simultaneous release as “a pandemic-era artifact that should be left to history with the pandemic itself. Disney won’t be sending executives or stars to CinemaCon due to Covid concerns.)
Piracy has surged with simultaneous releases, what’s being done?
FITHIAN: Yes, it’s sending a film digitally to homes, a pristine copy immediately available to pirate sites. We’re biased, but the creative community gets this too – they don’t want their product stolen immediately.”
Neither do studios or streamers. In fact, Fithian called the MPA’s ACE (Alliance for Creativity and Entertainment) “the biggest cost-effective coalition to fight piracy. Rivken and his team deserve credit and are having tremendous successes.”
(ACE has 35 global members led by the MPA and its six studios — Disney, Warner Bros., NBCUniversal, Sony, Netflix and Paramount — as well as Apple TV+ and Amazon Prime Video. It’s reported a dozen major actions so far this year, most recently this past week securing a preliminary injunction against popular piracy site Altered Carbon.)
RIVKIN: “Since its founding four years ago, ACE works around the clock and around the world to reduce the pirating of all audiovisual content, including digital. In fact, the theft of digital content is the single greatest threat to the global audiovisual community. It harms both local and foreign films and businesses, threatens jobs, undermines investment, reduces tax contributions to governments, and stifles creativity. The reason the world’s largest content creators and entertainment companies are part of ACE is because they understand this threat and appreciate the value of working together to stop it.”
There’s been some consolidation, closures and bankruptcies in the sector. Will that continue?
FITHIAN: We don’t know for sure yet because obviously every cinema in the world was closed. So it’s not clear for ones that haven’t opened if it’s because they are done, or waiting. But I can tell you we are going to lose many less theaters and screens than we thought we would because of government schemes to help us out. A lot of mid-sized owners would not have been able to reopen, small-town cinemas were kept alive. Maybe we lose 1,000 screens. But out of 42,000 screens? A lot are being acquired. It’s too early to tell. But we had feared a calamity of closures.”
You mentioned calling governors up top. In New York, outgoing Gov. Andrew Cuomo mystified exhibition by leaving theaters last in line to open after gyms, pool halls and pretty much every other venue. What was with that?
FITHIAN: “Someday we’ll write a book.”