Event Cinema in 2016: Interview with Jonathan Ross, Advisor for the Americas, Event Cinema Association
How is 2016 shaping up for the Event Cinema Association?
It truly is an exciting time for the Event Cinema Association (ECA) as we are the only nonprofit trade body in the world that supports, promotes, and advocates on behalf of the event cinema industry. We currently have over 155 members across some 33 territories worldwide and growing. Our membership “tent” is wide, and we welcome any and all actors within the industry to join, including exhibitors, distributors, content owners, service providers and vendors, technology firms, consumer-facing brands, and so on.
The ECA is actively involved in programming and hosting its own high-profile events such as the ECA Conference in Stockholm, Sweden, this past October, with its focus on the Scandinavian region and our ECA Annual Conference and Awards Ceremony to be held in London on February 3, 2017, just before the Berlin Film Festival. We have also teamed up with Art House Convergence for its annual conference in January and will continue our established presence at both CinemaCon and CineEurope with panel discussions, social gatherings, and meeting opportunities for members and prospective members alike.
Since the digital transition leveled off, we’ve seen event cinema grow and grow around the world. Why do you believe this trend will continue in the coming years?
Event cinema has become the fastest growth sector at the box office today now that exhibitors’ programming “shackles” have been removed, and they have massive flexibility to take more control over the depth and breadth of content they can offer their patrons. The digital transformation has also greatly lowered the barriers to entry for new distributors and content owners, and exhibitors have discovered that they can use alternative content to fill theater overcapacity and scheduling holes during the week and slower movie seasons, thereby normalizing their revenue streams over the course of the year.
Exhibitors are embracing event cinema as a new revenue-generating opportunity—selling tickets, concessions, on-screen ads, and merchandise—like never before. Whereas in past years, it may have accounted for only around 1 to 3 percent of their total box office, event cinema is now responsible for anywhere from 5 percent to 15 percent and, in some locations, upwards of 25 percent of the theater’s overall ticket sales.
The industry has seen over 500 percent growth in event cinema revenues globally over the last five years, and there is every expectation that this pace will continue over the coming years. The event cinema industry is still relatively small but is incredibly agile, and there remains so much potential across a multitude of genres that have yet to be tapped.
The U.K. has been a powerhouse for event cinema in the last number of years. Which other markets have proved to be successful with the format?
Indeed, the U.K. has been a huge trendsetter and game-changer in event cinema and has really turned it into a viable business worth over £40 million by some accounts. But there are certainly other territories where we are seeing significant innovation and growth as well. The U.S. is the largest market in terms of revenue amount, with some estimates pegging at around $150 million or more per year. As more and more of the larger circuits finalize their move to digital and start installing either rooftop satellite dishes or fiber links to receive live or near-live events, I think we’ll see that number keep climbing.
France has seen solid success with homegrown product like Comédie Française theater as well as imports like the Metropolitan Opera from New York. Similarly, Russia’s world-renowned Bolshoi Ballet and Tours of the Hermitage Museum have proven very popular both in the country as well as for export globally. Other territories including Spain, Italy, Germany, and Australia are showing great promise with exciting new cultural and arts content such as Teatre Liceu Opera, La Scala Opera, Berlin Philharmonic, and Sydney Opera House, respectively, programmed for both domestic and international screens.
In Japan, ODS (“Other Digital Stuff”) that includes popular music, sports, gaming, anime and more now accounts for more than 13% of that nation’s total annual box office. South Korea is also getting in to the game with highly popular K-Pop concerts, musical theater and the like. And I am personally excited to see markets in Latin America including Mexico, Brazil and Argentina begin to thrive in this space both with exhibitors and content owners.
What have been some of the most successful titles for event cinema in 2016?
That’s a difficult question to answer because not all event cinema titles perform equally in all territories. In the U.K., Andre Rieu’s “2016 Maastricht Concert” shattered the all-time event cinema box office record in July with £1.4 million in a single weekend. In the U.S. and just a handful of international markets, Warner Bros.’ day-and-date release in September of the animated Batman: The Killing Joke was the highest-grossing studio release ever, pulling in almost $4.4 million in just a four-day theatrical run. Also, the Metropolitan Opera’s live performance of Madame Butterfly in April generated over $2.4 million worldwide, which made it one of the most successful opera transmissions ever.
Which genres have proved to be the most popular in event cinema? Are there any others on the rise?
With their season-based, programmatic natures, opera and ballet have really become the bread and butter for cinemas around the world, which has been fantastic for all parties involved. Live stage and theater performances mostly originating out of London probably come next after that, but the key typically is that it should be live or “near live,” that is, captured live and unedited but time shifted for international markets and time zones. Audiences clearly prefer that sensation of seeing a performance as it’s happening, warts and all, over a recorded event that happened months or even just a few weeks ago. If producers, rights holders, talent, and the unions can come together and sort out their own issues, Broadway theater here in the U.S. could also be a significant force and driver in this genre.
Music documentaries and live music concerts with live Q&A portions also remain big draws, especially when the artist or group has a huge and loyal fan base that can be mobilized and compelled to come to the theater.
In-theater events based on the season premieres or finales of popular TV series have demonstrated great potential as well, and I hope we’ll see more of this. IMAX and HBO teamed up last year for the season finale of Game of Thrones, and they easily sold out screens in the U.S. Consumers happily paid over $20 each to watch a Game of Thrones episode that had already premiered on the cable network and see a trailer for the upcoming season. We’re also seeing interesting experimentation with events built around some of the viral video stars coming out of YouTube, Maker Studios, and other multichannel networks (MCNs), and I think we’ll definitely see more of this.
Gaming, also known as eSports, in cinemas have shown tremendous promise, and there have been more and more announcements like Cinemark’s “Minecraft” Tournaments and Riot Games’ “League of Legends” playoff viewing parties happening in the U.S. and Canada, Europe, and Asia. Gamers are excited to come together with their fellow gamers and have that sense of community while they watch the best players in the world compete for the top title and increasingly large pools of money. This is something they can’t get at home behind their computer or PlayStation, and that’s why exhibitors are embracing this new genre so aggressively. It’s also an opportunity for theater owners to reach out to and reconnect with a demographic—young men and women 15 to 24—that is notoriously fickle and harder and harder to draw into cinemas.
The next “holy grail” in event cinema in my opinion is anything related to virtual reality (VR) or augmented reality (AR), and we have reports of content owners and exhibitors scrambling to figure out how to incorporate these new technologies into the cinema environment. Companies like D-Box and CJ 4DX with their immersive motion seating experiences could also play a big role in this area well. The in-home VR experience remains somewhat wonky and challenging to consumers so the out-of-home experience—whether onscreen or in dedicated viewing pods in theater lobbies—will for the foreseeable future remain the superior choice, and there is so much potential given the right content and event.
Sports continuously gets brought up as a potential big earner in the U.S. What sports have done well, and do you think sports rights can get untangled in the coming years to bring more content diversity to the market?
You’ve hit the nail on the head with sports. It’s all about the transmission rights and who controls what. The various sports leagues and networks have these fears that screening their live sporting events on several hundred screens could potentially cannibalize their massive television viewership and somehow diminish the value of their advertising and ultimately their national or regional ad sales. I just don’t buy it.
We’ve seen examples like the World Cup in 2014, MMA fighting, some tennis, and a smattering of mostly college nonprofessional leagues show in theaters, and those have performed relatively well. But there is no evidence of which I’m aware to suggest programming these events simultaneously on movie screens has or will damage their ad revenues or TV views. If anything, I believe these events grow interest among fans and new consumers of the various sports. I think where we’ll see some new innovation is with different types of sports like the extreme sports, and newer, more exotic sports leagues where the rights holders and content holders are more flexible and open to experimentation and can afford to take a chance on a simulcast of their event in theaters.