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by Patrick Corcoran, Vice President & Chief Communications Officer, NATO

The cobbled-together simultaneous release of Sony's The Interview is a Rorschach test. What you see generally tells more about you than it does about the release model of The Interview. Those inclined to believe that simultaneous theatrical and home release is inevitable point to its $31 million home tally and $5.9 million theatrical take (through January 14, 2015) and see a "game changer." Some, like me, see a blot.

Netflix's Ted Sarandos sees a "great example of what can happen with a big-budget movie if you give them distribution choices. I hope it's eye-opening for the industry." For once, we agree. So let's open some eyes.

Many industry analysts noted exhibition's oft-stated resistance to simultaneous release, pointing to the DirecTV early premium video-on-demand plan in 2011 and the canceled Tower Heist plan to offer the movie on VOD three weeks after its theatrical debut for $59.99. Several major exhibition companies announced that they would not play the movie under those circumstances, and Universal shelved the plan.

What happened when Sony announced it would be offering The Interview simultaneously in the home to accompany its Christmas theatrical release? Several major exhibition companies announced they would not play it under those circumstances. The movie played on 331 screens in its opening week--roughly the same number that were willing to play other, less well-known simultaneous releases.

Game not changed.

Some analysts grew starry-eyed at the double-digit millions taken from the home market and compared it to the lower profile Snowpiercer and Arbitrage, which took in $14 million and $11 million on VOD, respectively. These same analysts also generally neglected to note that the record holder for VOD and digital release is Bridesmaids, which took in $40 million after its traditional theatrical release grossed $169 million domestically.

Given the patriotic upsurge and massive media attention that accompanied the unusual release of The Interview, the $2.9 million in theatrical box office over the first four days was not good. Five other movies in release at the same time had higher per-screen averages, despite the fact that they played on more screens and didn't have the massive media attention. Nor did the theatrical release perform well in the second week. Despite an increase in screens of 75 percent, box office declined 40 percent. This was the case with Snowpiercer, which fell 37 percent while its screens increased more than 42 percent the same weekend it became available on VOD.

No change here either.

What was a bit surprising was the fact that The Interview's VOD revenues decreased after its opening four days, despite being available on enormously more outlets when it expanded to iTunes and cable VOD platforms around the country. The movie took in $15 million in its first four days. It took in $16 million in the next seven.

Another constant argument against simultaneous release is the erosion of value in the home market. Theatrical release has maintained a steady, modestly growing price point for years, and the pricing is per patron. Once any movie goes into the home market, it is immediately thrown into a world where price trumps nearly every other factor. The Interview is no different. The movie was offered at two price points in the home, $5.99 for rental or $14.99 for purchase. Using Sony's announced revenue and transaction figures of $31 million and 4.3 million downloads, we get an average purchase price of $7.20. The transactions clearly skewed to the lower end of the pricing spectrum.

The Wall Street Journal made an algebra problem out of it and arrived at 3.72 million opting for rental and 577,000 springing for ownership.

Further complicating the math, though, is that no one knows how many people those 4.3 million transactions represent. Some people organized viewing parties to support free speech-much as moviegoers went in groups to see the theatrical release--but we simply don't know how many people watched the average download. Was it two? Three? Suddenly that $7.20 per download becomes $3.60 per viewer or maybe $2.40. Just as a point of comparison, the average theatrical ticket price stood at $8.12 through the end of the third quarter of 2014.

The only game changed here was just how much money Sony left on the table.

An argument that is regularly advanced in favor of a shortened theatrical window is the so-called "piracy window," despite the fact that piracy increases with the availability and awareness of legitimate release and trails off the same way legitimate releases do the longer they are in the marketplace. By the end of 2014, The Interview had been downloaded from torrent sites roughly 2.5 million times. This does not count the unknown number of times the movie was watched by people whose friends had purchased the movie and shared shockingly reusable links to the movie.

When we consider whether or not the game has been changed, let's remember what the game really is. Sony invested a certain amount of money in The Interview with the intention of making a certain amount back. How much did they invest, and how much are they likely to get back?

Now, Hollywood budgets are slippery and elusive things, but it is generally accepted (in part due to hacked e-mails released online) that The Interview's production budget was $44 million, and that Sony spent an additional $30 million (some estimate $40 million) on marketing. The initial intent was to open the movie on approximately 3,800 screens, which suggests a certain confidence in its box office appeal. Most industry analysts predicted a four-day-holiday gross of around $25 million (a few went as high as $30 million).

Here things get a little speculative. To be conservative we can assume a final gross of two-and-a-half times opening weekend--not atypical of many major releases. With a $25 million opening, that gets you to $62.5 million. Holiday releases tend to have a better multiple, but again, it's tricky. Movie City News's David Poland, with his usual insightful understanding of movies' financial performance, suggests averaging the box office of Seth Rogen's comedies since Pineapple Express, which gives us $72 million (which he considers low, given the last two of Rogen's movies topped $100 million). Assume 50 percent goes back to Sony, and we are at $36 million--almost halfway there. Using the international average grosses of those same movies brings another $20 million (and, by the way, the international markets Sony has announced for The Interview will be traditional theatrical releases) or, assuming a really generous for international split of 50 percent, another $10 million back to Sony.

Now we're at $46 million.

The average theatrical release takes in roughly 60 percent of domestic box office in the home market these days-some do far worse; Neighbors managed only about 16 percent in disc sales, with rentals unknown--but it seems like a fair estimate. That's another $43 million, of which about 70 percent would return to Sony--$30 million.

Basically breakeven--$76 million in, versus $74 million out. This is before we get into pay TV and Netflix streaming and so on.

Now let's compare the traditional theatrical-release model to the simultaneous release used by Sony. As the current release plan stands, Sony can expect roughly $3.5 million from domestic theatrical (assuming a final gross of $7 million). We haven't heard any new digital dollar figures from Sony since January 4, so it's a little hard to estimate where it will end up, but I'm feeling generous. Say $50 million. Given the chaotic nature of the ad hoc release plan and Sony's desperation to play the movie on any home-release platform that would take it, I'm going to assume, less generously, that Sony pockets 60 percent of that sum (instead of the customary 70 percent)--$30 million.

We're at $33.5 million.

Let's be generous again and assume the same international box office that might have resulted from a traditional release--although with so many pirated pristine digital copies out in the wild, that may be tough. Add $10 million.

We're at $43.5 million, and it has already had a home release. Frankly, the waters here are uncharted. Premium cable usually bases what they'll pay on theatrical performance--how do you measure that? Sony has announced a DVD/Blu-Ray release for February 17--what kind of disc sales and rentals will you get when it has already been in the home? In this simultaneous-release game, Sony is $30 million in the hole and almost out of cards.

After a few weeks of giddiness-one online piece for Time titled "Sony Has Almost Made Its Money Back on The Interview," seemed to believe that the studio keeps every penny consumers spent on it--others acknowledged the movie wasn't anywhere near recoupment but touted the change in "perception" of the idea of simultaneous release.

In a Fast Company article titled, yes, "The Interview Is A VOD Perception-Changer, Not A VOD Game-Changer," producer John Sloss--whom you may remember from my November column on simultaneous release (Ted, John--we're getting the band back together!) and whose movie Boyhood did quite well in a traditional theatrical release (more than $23 million)--seems to believe the example it provides is something like "eye-opening."

"It shines a light on the possibility," says John Sloss, the indie film sales agent and lawyer who was a producer on this year's awards movie Boyhood. "But it's a complete anomaly."

Kind of like Schrödinger's cat. Simultaneous release either works or it doesn't, but to an observer like John Sloss it's possible both are true--until you look at it.

One observer who doesn't view this release as a game changer? Sony CEO Michael Lynton. In an extensive interview with the Associated Press, Lynton said the studio views the release of a film on on-demand video and in independent theaters as "still experimental."

"You would never take a movie of this size and do what we did with it in the end," Lynton said. "It's true, it proved to be that kind of experiment, but it certainly wasn't planned." The theatrical experience is important, Lynton said, especially for comedy "because people love to laugh with each other."

"Had this not come along the way it had, we would've proceeded exactly the way we planned to do it, which is to put it out on 3,500-plus screens."

Game over.

 

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LOS ANGELES -- "Fifty Shades of Grey" doesn't open until February 13, but fans are already scooping up their tickets on Fandango to the hotly-anticipated adaptation of the popular best-seller. The film is currently the fastest-selling R-rated title in Fandango's 15-year history, already outpacing several major hits.

Fandango's top-5 R-rated advance ticketers, in first week of sales (as of Friday, January 16, 2015):
1. "Fifty Shades of Grey" (2014)
2. "Sex and the City 2" (2010)
3. "The Hangover Part II" (2011)
4. "The Hangover Part III" (2013)
5. "Gone Girl" (2014)

"Fifty Shades" is also having the biggest first week of ticket sales on Fandango for a non-sequel film, since the first "Hunger Games" movie in 2012, which still holds the record. Theater owners are posting new show times each day on Fandango to meet the hot fan demand in all the fifty states.

"It's tracking to be Fandango's fastest-selling R-rated movie of all time," says Fandango Chief Correspondent Dave Karger. "Very few books can claim true national phenomenon status - and ‘Fifty Shades' ranks with ‘Twilight,' "The Hunger Games' and ‘Gone Girl" as novels that entered the zeitgeist from coast to coast. Fans of the book have been waiting for years to see their favorite sexy characters come to life on the big screen, and they are clearly fueling our sensational advance sales."

At the end of December 2014, Fandango surveyed more than 1,000 ticket-buyers, asking them which 2015 films they're most excited to see on the big screen. "Fifty Shades" ranked among the top four films, along with "Star Wars: The Force Awakens," "Avengers: Age of Ultron," and "The Hunger Games: Mockingjay, Part 2," while "Fifty Shades" star Jamie Dornan was voted "Biggest Male Breakout Movie Star of 2015."

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carmikecinemas.pngCOLUMBUS, Ga.--(BUSINESS WIRE)-- Carmike Cinemas, Inc. (NASDAQ: CKEC), a leading entertainment, digital cinema and 3-D motion picture exhibitor, today unveiled special weekend-long concessions promotions at all 273 of its entertainment complexes in conjunction with the celebration of National Popcorn Weekend. All Carmike guests that purchase an annual refillable popcorn bucket throughout the extended weekend will also receive a large fountain drink for the combined price of $21.00, representing substantial savings.

Patrons that already own their 2015 bucket will also receive the special discount on their bucket refills during Nation Popcorn Weekend, a tremendous savings off the regular price at only $2.00 per refill. These promotions extend through evening movie showings on Monday, January 19, which is the Martin Luther King, Jr. Day national federal holiday. Annual refillable buckets are available at all Carmike theatres on a first come, first served basis, while supplies last. Following this weekend those that own a bucket, which normally retails for $20.00, can return to their local Carmike theatre throughout the year to receive refills for just $4.00.

Carmike President and CEO David Passman stated, "We are excited to celebrate National Popcorn Weekend, together with our valued guests in each of our locations this holiday weekend. The annual refillable popcorn bucket has proven to be one of our guests' most valued concession promotions and we are pleased to add additional savings for our loyal patrons. This weekend we hope to welcome many new participants into our program, while showing our appreciation to those that already own their 2015 buckets with additional savings through Monday evening."

About Carmike Cinemas

Carmike Cinemas, Inc. is a U.S. leader in digital cinema, 3-D cinema deployments and one of the nation's largest motion picture exhibitors. Carmike has 273 theatres with 2,892 screens in 41 states. The circuit includes 45 premium large format (PLF) auditoriums featuring state-of-the-art technology and luxurious seating, including 28 "BigDs," 15 IMAX auditoriums and two MuviXL screens. As "America's Hometown Theatre Chain" Carmike's primary focus is mid-sized communities. Visit www.carmike.com for exact show times and to purchase tickets.

 

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regalentertainmentgroup.pngKNOXVILLE, Tenn.--(BUSINESS WIRE)--Jan. 15, 2015-- Regal Entertainment Group (NYSE: RGC), a leading motion picture exhibitor owning and operating the largest theatre circuit in the United States, today announced that its Board, in the course of its examination of strategic alternatives and with the advice of Morgan Stanley & Co. LLC after a thorough market review, has determined that a sale of the company would not be in the best interest of its shareholders at this time. The Board, consistent with its fiduciary duties, remains committed to evaluating any alternatives that would enhance shareholder value but does not plan to make additional comments on those alternatives unless it becomes appropriate.About Regal Entertainment Group:

Regal Entertainment Group (NYSE: RGC) operates the largest and most geographically diverse theatre circuit in the United States and, as of January 1, 2015, operates 7,367 screens in 574 theatres throughout 42 states along with the District of Columbia, American Samoa, Guam and Saipan. The Company operates theatres in 46 of the top 50 U.S. designated market areas. We believe that the size, reach and quality of the Company's theatre circuit not only provide its patrons with a convenient and enjoyable moviegoing experience, but is also an exceptional platform to realize economies of scale in theatre operations.

Additional information is available on the Company's website at www.REGmovies.com.

- See more at: http://investor.regmovies.com/phoenix.zhtml?c=222211&p=irol-newsArticle&ID=2008157#sthash.09LsVqre.dpuf

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By Alex Edghill

With big name films such as Minions, Avengers: Age Of Ultron and Star Wars: The Force Returns dominating social media of late it came as a big surprise (to me anyway) that a relative unknown stepped up to the plate yesterday and hit the biggest home run (best goal, ran the fastest lap...insert whatever sport metaphor you want) ever on Twitter. No I'm not making that up, Unfriended had a gargantuan 261,941 tweets yesterday which makes it the most talked about trailer ever on Twitter.

To frame that number a little bit, Fifty Shades Of Grey held the record prior to yesterday with 240,697, the next best to that was Jurassic World with 224,111, then Avengers: Age Of Ultron's 205,739. Now I'm not suggesting that this little film from Universal is going to be a $100 million opener but this number right away cements it as a force to be reckoned with for the horror genre in early 2015. To reiterate, the Saw franchise or the Paranormal Activity franchise never got anywhere close to these numbers for their trailers.

Cyber-bullying has been in the spotlight in local and global media for quite a few years now, and with the coinciding (and alarming) increase in teen-suicides it is quite rightly receiving a lot of focus from young and old alike. Take a film such as this which provides a timely mashup of cyber-bullying, horror, Skype, and the ever popular found-camera-footage genre and it has created a perfect storm of online buzz amongst its target demographic, female-skewing young teens and twenty-somethings. No matter what its box office returns, Unfriended will go down as one of the biggest social media successes of 2015.

Top 5 Trailers by Twitter Buzz

Date Title Release Tweets
01/14/2015 Unfriended 04/17/2015 261,941
07/24/2014 Fifty Shades of Grey 02/13/2015 240,697
11/25/2014 Jurassic World 06/12/2015 224,111
10/22/2014 Avengers: Age of Ultron 05/01/2015 205,739
11/01/2014 Furious 7 04/03/2015 172,059

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