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12/24/14 Update #2: According to THR, YouTube, GooglePlay, XBox Video will make The Interview available at 10 a.m. PT. The price points will be $5.99 for a rental and $15.99 for an HD purchase. 

Update 12/24/14: According to CNN, Sony has reached a tentative agreement to stream The Interview on YouTube and Google Play. The studio is also currently in talks to book other online platforms for the film. 

Around 300 independent theaters have already booked the film for Christmas day.

 

Update 12/23/14: THR reports that Sony will allow screenings of The Interview in select locations--including an Alamo Drafthouse theater in Dallas/Ft. Worth and also the Plaza Theater in Atlanta--on Chirstmas Day. A VOD release is also allegedly in the works now.  

Update #3: In an official statement, Sony revealed that there are no further plans for the release of The Interview. This puts an end to the speculation that a VOD release could be an alternative to the cancelled theatrical run.

Update #2: Sony has cancelled the Christmas Day release of The Interview. Here's the official statement:"In light of the decision by the majority of our exhibitors not to show the film The Interview, we have decided not to move forward with the planned December 25 theatrical release. We respect and understand our partners' decision and, of course, completely share their paramount interest in the safety of employees and theater-goers.

Sony Pictures has been the victim of an unprecedented criminal assault against our employees, our customers, and our business. Those who attacked us stole our intellectual property, private emails, and sensitive and proprietary material, and sought to destroy our spirit and our morale - all apparently to thwart the release of a movie they did not like. We are deeply saddened at this brazen effort to suppress the distribution of a movie, and in the process do damage to our company, our employees, and the American public. We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome."

Update #1: Variety and The Hollywood Reporter are both writing that Regal, AMC, Cinemark, Carmike and Cineplex will not be playing The Interview in theaters. 

Other chains that will not play the film include B&B Theatres, Bow Tie Cinemas, Arclight Cinemas and Classic Cinemas. 

Earlier today, the National Association of Theatre Owners sent the following statement:

"The ability of our guests to enjoy the entertainment they choose in safety and comfort is and will continue to be a priority for theater owners. While we do not discuss security procedures or policies, NATO members are working closely with the appropriate security and law enforcement agencies. We are encouraged that the authorities have made progress in their investigation and we look forward to the time when the responsible criminals are apprehended. Until that happens, individual cinema operators may decide to delay exhibition of the movie so that our guests may enjoy a safe holiday movie season experiencing the many other exciting films we have to offer."


About NATO
The National Association of Theatre Owners is the largest exhibition trade organization in the world, representing more than 32,000 movie screens in all 50 states, and additional cinemas in 81 countries worldwide.

Headquartered in Washington, D.C., with a second office in North Hollywood, California, NATO represents its members in the heart of the nation's capital as well as the center of the entertainment industry. From these vantage points, NATO helps exhibition influence federal policy-making and work with movie distributors on all areas of mutual concern, from new technologies to legislation, marketing, and First Amendment issues. www.natoonline.org

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by Michael White

Director Rob Marshall's Oscar-winning Chicago helped ignite a revival of musical films that has given birth to hits such as Les Mis, another Oscar winner, and Mamma Mia! Marshall's latest production, Into the Woods, is based on the classic fairy tales of German brothers Jacob and Wilhelm Grimm. In an interview with BoxOffice Pro, Marshall discussed his film and the relevance of the Grimms' cautionary tales in today's world. Into the Woods, from Walt Disney Company, opens in theaters on December 25.

Into the Woods is based on stories that are a couple of hundred years old. Most of us have heard them since we were toddlers, and yet they remain compelling. Why is that?

I guess that's why they're classic stories. They're human stories and humanity doesn't change. These are stories of greed and ambition. They deal with the very classic human condition, and that's why they remain. Straying from your path-you're told not to and then you do and when you do, Little Red Riding Hood meets the wolf. In our movie they all realize the consequences post-"happily ever after." Jack learns, maybe I shouldn't have stolen from the giant and Cinderella realizes, maybe I shouldn't have attended the ball. Even though it's based on classic material, it feels very much like today. It's an incredibly funny, joyous piece, but it also deals with reality.

We talk about Shakespeare and the genius that makes his work enduring. Did the Grimm brothers have a similar genius that makes these stories so foundational?

Yes, I think that's why Stephen Sondheim turned to these stories in the first place. He went to the Grimm story of Cinderella. It's a much more sophisticated story than the [Charles] Perrault version of Cinderella. Perrault's story is about a pumpkin changing into a coach. In the Grimm version, Cinderella goes to the ball three times, and she chooses to go home each time and there is a very complex question of why she does that. And the Stephen Sondheim piece answers the question, was that the right thing? There's a beautiful line in our film in which the fairy godmother asks her, "Are you certain that what you wish for is what you want?"

What is the greatest challenge in adapting a stage play to film?

You want to retain what you can of the elements that work onstage, but you want to make sure you're always serving the film. Obviously on the stage you're sort of in a false place; you're in a theater where there's a proscenium, usually, so you know you're not in a real place. You can accept people singing, for instance, more easily than you can on film, which is a much more realistic medium. So one of the key issues for me is explaining, why is this person singing. One of the reasons I thought Into the Woods would work as a film is that the opening prologue is 16 minutes long. It's a combination of both singing and speaking, all very seamless, back and forth, and that's very helpful because you establish the language immediately. I've always felt if the audience knows what the rules are and how the story's going to be told up front, they'll go with you.

There has been a fair amount of discussion about what changes were made in adapting Into the Woods for the screen. I think Sondheim started that discussion with some comments he made in an interview. My understanding is that you actually have retained all of the major elements of the play, such as Rapunzel's death and the infidelity and the darker tone.

First, I would say Stephen Sondheim was incredibly upset by that article, because it so misrepresented what his feelings were, and he admitted that at that point he had not seen the film. It was such a misleading piece because it was actually the opposite. We were incredibly careful with all of the decision making, not only to retain all of the parts of the stage play, as long as they work on film, but also to retain the turn of tone in the play; it's essential that it be there. So the darkness is all there.

Broadway, of course, is not a children's venue, but Disney films are. Do you feel you hit the balance between dark and happy so that parents will be comfortable bringing their children to see Into the Woods?

I do. To me it's very much a fairy tale for the 21st century. It's a fairy tale for children and parents post-9/11. It deals with issues that are relevant today, specifically with loss. I grew up in a very different time than children today, with terrorism and shootings and climate change and all the fear, which is represented in the film by the giant; it's a metaphor for fear. And the play deals with how do you move through post-"happily ever after." Children need the tools for how you do that. There is a beautiful song called "No One is Alone," and I think that is one of the central messages of the piece, that no one is alone. I very much feel it's a family movie; I think it's an important discussion. And we've been given a PG rating. It's an incredibly joyous, funny, and fantastic piece that also has a message and deals with reality and real issues, too.

The Grimm brothers' stories are dark themselves.

That's because all of those stories are 100 percent cautionary. They all began that way. And these really are the grim fairy tales.

How did you decide what changes were needed? In the play, for example, you have the narrator who breaks the wall and speaks to the audience, but he is not in the film.

One of the things that I did, which I was very keen to do, was work with James Lapine, who wrote the stage play and the screenplay, and work with Stephen Sondheim, so that when we made the adaptation we were able to maintain the integrity of the piece. I was so impressed with James's and Stephen's willingness to consider changes. So often I found I was the keeper of the stage version, saying, "Don't change that."

You have roots in bringing classic material from the stage to television, working as a choreographer on adaptations such as Cinderella. Did that background make you more comfortable with this?

With each film, with each time out, you learn more and you try to bring that expertise to the next project. I do know this was a real passion project for me. I met with Stephen Sondheim right around the time Chicago opened and I said, "I would really love to do a musical of yours on film." We talked about Sweeney Todd and we talked about Follies, and he said, "I think Into the Woods would be perfect for you." And that stayed with me over the years. I did feel very connected to this piece. I love what it says about the parent-child relationship and moving forward.

Chicago was the first musical in decades to win an Oscar, a very successful film. Do you think that opened the door for subsequent musical films that have come out and done well, productions like Mamma Mia! and Les Mis?

I would like to think there has been a rebirth of musicals. I felt a responsibility to help move that forward, and I am thrilled that more musicals are being made. If we did open the door, or kick it open a little bit, I'm incredibly proud we were able to do that.

What is the future for this genre? Do you think it will remain part of cinema?

I do. It's an American art form, musicals, and it's something we should hold very dear. Of course they're very fragile, too, because when they're not done properly, people think the genre's not good. With the scale of a musical, the size and complexity of it, it's tricky to make work. So each time out I try to be as conscious of that as possible and make sure it works as a piece. With this piece it's particularly rewarding because the storytelling is so seamless between the music and the dialogue. So I felt I had great material in front of me.

 

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By Daniel Garris

Warner's The Hobbit: The Battle of the Five Armies led the daily box office on Monday with $9.01 million. The third and final chapter of Peter Jackson's The Hobbit trilogy has comfortably led the daily box office for each of the past six days. The Battle of the Five Armies was down 46 percent from Sunday's performance, which was among the day's larger daily percentage declines on Monday. The film has grossed $98.14 million in six days and is set to surpass the $100 million domestic mark today. The Hobbit: The Battle of the Fives Armies is running 8 percent ahead of the $90.99 million six-day start of last year's The Hobbit: The Desolation of Smaug (which opened on a Friday).

On the heels of this weekend's softer than expected start, Fox's Night at the Museum: Secret of the Tomb held up nicely on Monday with a $3.41 million second place take. The third installment of the Ben Stiller led franchise was down 30 percent from Sunday. With schools out of session for the holidays, daily holds were strong in general for family fare on Monday. Night at the Museum: Secret of the Tomb surpassed the $20 million mark yesterday and has grossed $20.51 million in four days. That places the film 21 percent behind the $25.96 million four-day start of 2011's Alvin and the Chipmunks: Chipwrecked.

Fellow family film Annie followed closely behind in third with $3.20 million. Sony's musical remake starring Quvenzhané Wallis, Jamie Foxx and Cameron Diaz was down 29 percent from Sunday. Annie continues to perform very similarly to Secret of the Tomb, as it has grossed $19.07 million in four days. The two films may very well remain close to one another throughout the holiday season, though it should be noted that Annie was far less expensive than Secret of the Tomb. Annie is currently running 26.5 percent behind the pace of the earlier mentioned Alvin and the Chipmunks: Chipwrecked.

The Hunger Games: Mockingjay - Part 1 claimed fourth place with $1.72 million. The third installment of Lionsgate's blockbuster franchise was down 30 percent from Sunday and up 54 percent over last Monday. Mockingjay - Part 1 surpassed the $290 million mark yesterday and has grossed $291.07 million in 32 days. The film is now just $8.93 million away from becoming the second release of 2014 to reach the $300 million domestic milestone.

Fox's Exodus: Gods and Kings rounded out Monday's top five with $1.29 million. The pricey Ridley Scott directed biblical epic was down 50 percent from Sunday, which represented the day's largest daily percentage decline among wide releases.  The film was down 35 percent from last Monday. Exodus: Gods and Kings surpassed the $40 million mark yesterday and has grossed a lackluster $40.23 million through eleven days of release.

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by Michael White

As 2014 draws to a close, exhibitors have more to think about-like the potential sale of the biggest U.S. chain-than the disappointing box office returns from this year's movie slate. There is a consensus among exhibitors and Hollywood studios that 2015 will be better, with sales possibly reaching a record $11 billion or more.

With a box office revival a near certainty, other issues loom large for exhibition executives. Perhaps the biggest is Regal Entertainment Group's surprise announcement in October that the Knoxville, Tennessee-based company may put itself on the block.

That's not all. The U.S. Department of Justice has sued to block the merger of the industry's two largest on-screen advertising companies, National CineMedia Inc. and Screenvision LLC. And Imax Corp. and Netflix have challenged the traditional release window between theatrical and home entertainment with an agreement for a day-and-date release of The Weinstein Company's Crouching Tiger, Hidden Dragon 2.

And, not least, exhibitors are busy making improvements, including luxury seating, online ticketing, more big-screen auditoriums, and better food service. The changes promise incremental revenue enhancements that may make exhibitors slightly less dependent on fluctuating box office sales.

Despite the hot-and-cold nature of box office demand, exhibitors have managed to maintain margins through incremental increases in ticket prices and by making cinemas more appealing to consumers, says Gabelli & Co. analyst Brett Harriss. One result is that publicly traded exhibition companies have remained attractive to investors. Growth among companies included in Redwood Capital Group's North American Cinema Exhibitors Index outpaced the Standard & Poor's 500 Index from 2009 to mid-2014. Through November 7, 2014, members of the index, which includes the four largest U.S. operators, Imax Corp., and Canada's Cineplex and Reading International Inc., had a compound annual growth rate of 21.6 percent compared with 14.9 percent for the S&P companies.

"The capital markets are rewarding what are well-managed costs and margins in the context of relatively flat revenue growth," says Gregory Bedrosian, chief executive officer and managing partner at Redwood. "The multiples have ticked up a bit. Stock prices are moving up."

A Regal sale would likely become the biggest the industry has seen, one that probably would surpass the 2012 sale of No. 2 AMC Entertainment Holdings to China's Dalian Wanda Group for $2.6 billion. Regal, with 7,318 screens in 574 locations, would likely fetch a higher price with a market cap of $3.47 billion as of November 10.

Regal announced in October that it hired Morgan Stanley to review strategic options, including a possible sale. The news caught Regal's peers off guard. Among U.S. exhibitors, Cinemark said they would take a look at Regal, though chief executive Timothy Warner stopped short of saying he would make a run at the company. Mexico-based Cinépolis, in the midst of an expansion in India, also has said it would take a look.

"Regal is a very attractive company," Warner said after Regal's announcement. "Like any other acquisition opportunities, Cinemark will evaluate what the announcement means to our company."

"It makes sense for Regal to test the waters to see if there are any buyers before their appetites are satisfied," says B. Riley & Co. analyst Eric Wold.

AMC appears to have little interest in making a run for Regal. That is partly because the company is in the midst of a major campaign to revamp auditoriums with luxury reclining seats and improve food service. In addition, AMC is leery of running into regulatory issues that a combination of the two largest chains might raise, chief executive Gerry Lopez said after Regal announced its plans.

"I've got a company to run," Lopez said when analysts asked about his interest in Regal. "Things are working. Our perspective is that we want-we need-a steady hand on the tiller because we have significantly better weather ahead in 2015. So, we are going to remain focused operating the business, executing against the strategy that so far has delivered great results for us."

Whether Regal is sold, consolidation among North American exhibitors will continue if executives have their way. Even Regal is scouting the landscape for acquisition targets as it explores selling itself, chief executive Amy Miles says.

"M&A will remain a key part of our strategy," Miles says.

As Regal considers a sale, National CineMedia is fighting a federal lawsuit to block its $375 million acquisition of competitor Screenvision. The companies argue that the combination, which would encompass 88 percent of U.S. screens, would provide advertisers better service for the commercials that appear on movie screens before previews begin. Publicly traded National CineMedia was founded by AMC, Cinemark, and Regal. In its lawsuit, the Justice Department raised antitrust concerns, saying that the chains-the largest in the United States-would exercise "significant control and influence" over the new company.

Executives of the chains have declined in recent public appearances to comment directly on the lawsuit. National CineMedia, meanwhile, has expressed confidence that it can successfully defend against the lawsuit. The Justice Department has wrongly looked at the merger in the narrow context of only the film industry, National CineMedia CEO Kurt Hall said after the lawsuit was filed. Instead, the deal should be viewed within the broader competitive landscape of an ad market that includes hundreds of broadcast and cable outlets and many more online and mobile platforms, he said.

"Their claim that the merger will hurt advertisers is completely inconsistent with the reality of an increasingly competitive video-advertising market environment," Hall said.

Exhibitor confidence runs highest when executives discuss a 2015 release schedule peppered with sequels to hits that propelled 2013 tickets sales to a record $10.9 billion. The slate includes Avengers: Age of Ultron, Furious 7, Star Wars: Episode VII and the final Hunger Games. Executives and independent analysts agreed there is a very good chance these films and others on tap will push 2014 revenue beyond the $11 billion mark.

On paper, at least, the lineup looks like a sure bet. The Hunger Games: Catching Fire was 2013's top performer, taking in $424.7 million in the United States and Canada. The Hunger Games: Mockingjay Part 1 is expected to do well in this year's holiday season. The final film, Mockingjay Part 2, will reach theaters in November 2015.

ultron.jpgThe original Avengers took in $623.4 million in domestic sales and $1.5 billion worldwide in 2012, suggesting strong returns for Age of Ultron, which adds The Blacklist star James Spader as arch villain Ultron. Star Wars, a franchise begun in 1977, has generated $2.2 billion domestically, including re-releases of older installments. Globally, the franchise has done $4.5 billion in ticket sales. Other new films scheduled for release next year include Mad Max: Fury Road, a resurrection of the 1980s trilogy with Tom Hardy replacing Mel Gibson in the title role.

Fans echo the executives' enthusiasm. For example, Avengers: Age of Ultron has a 100 percent "want to see" rating on the movie-review website RottenTomatoes.com. Fury Road, The Hunger Games: Mockingjay Part 2, and Star Wars: Episode VII all have attracted a 99 percent rating.

Less pleasant for exhibitors is an agreement between Netflix and IMAX, the largest provider of big-screen technology, to release the Crouching Tiger, Hidden Dragon sequel simultaneously in theaters and to Internet-streaming subscribers. The film, a follow-up to the Chinese-language action film that took in $128 million in the United States and Canada and $214 million worldwide in 2000, is scheduled for release in August. Regal, Cinemark, and AMC all have said they won't show the film in their theaters. Outside the United States, European exhibitor Cineworld and Canada's Cineplex also have pledged a boycott.

"Our position on that type of programming is clear, and I think we've been consistent over the past three or four years regardless of when we were approached by third party as it relates to a day-and-date," Regal's Miles says. "We just think there is better programming from our screens, and we're going to continue down that path."

The major U.S. chains and AMC parent, Wanda, operator of China's largest chain, license IMAX technology in agreements that leave them with control over what films are shown on the screens, AMC said in a statement.

"No one has approached us to license this made-for-video sequel in the U.S. or China, so one must assume the screens IMAX committed are in science centers and aquariums," the AMC statement says.

Cinemark was more direct, declaring that the chain is "opposed to showing day-and-date releases at our entertainment complexes." 

Apart from tension over the day-and-date proposal, big-screen, premium-format showings of tentpole films was one of the bright spots for cinemas. Cinemark reported that third-quarter sales from 3D and large-format screenings rose to 25 percent of total admissions from 22 percent a year earlier. Exhibitors charge more for films shown in large-screen formats, whether with IMAX technology or proprietary brands such as Cinemark's XD, AMC Prime, Regal's RPX, Carmike's BIGD, or Marcus's UltraScreen. AMC also reported improved revenue from its large-format auditoriums, although specific numbers weren't provided.

In addition to recliner seats, executives see online ticket sales-and reserved seating-as yet another opportunity to attract more patrons by making it easier to get out and watch a movie. The sale of tickets online, including transactions at exhibitor websites and those of third-party vendors such as Fandango and MovieTickets.com, will reach $13.7 billion globally by 2017, Redwood Capital says, citing data from Global Industry Analysts.

Although Fandango and MovieTickets dominate the market, cinema operators are also getting into the business of selling tickets online. Cinemark operates its own online ticket engine. AMC rolled out a service in April, Lopez says. Overall, Internet sales for the chain rose 30 percent to 17.7 million tickets, or 13 percent of all tickets sold, in the third quarter. The robust results suggest a bright future for the technology.

"Slow box office and weak (2014) slate aside, our business on the Internet is booming," Lopez says.

 

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By Daniel Garris

Warner's The Hobbit: The Battle of the Five Armies easily led this weekend's box office with $54.72 million. The third and final chapter of Peter Jackson's The Hobbit trilogy has grossed $89.13 million through its first five days of release. On the heels of a sharper than expected percentage decline on Thursday, the film rebounded nicely over the weekend and registered a five-day to three day ratio of 1.63 to 1. The five-day debut of The Battle of the Five Armies was 13 percent below the $102.05 million five-day start of 2002's The Lord of the Rings: The Two Towers (which also opened on a Wednesday) and 3.5 percent ahead of the $86.14 million five-day start of last year's The Hobbit: The Desolation of Smaug (which opened on a Friday).

The Battle of the Five Armies grossed $16.56 million on Friday, increased 29 percent on Saturday to take in $21.39 million and declined 22 percent on Sunday to gross $16.76 million. That placed the film's opening weekend to Friday ratio at 3.30 to 1, which is obviously inflated by the film opening on a Wednesday. The Hobbit: The Battle of the Five Armies received an encouraging A- rating on CinemaScore.

IMAX grosses were responsible for $7.45 million of the film's overall gross this weekend. Thus far The Battle of the Five Armies has grossed $13.37 million from 360 IMAX locations. That represents 15 percent of the film's overall domestic gross. The audience breakdown for the film skewed towards male moviegoers (60 percent) and moviegoers over the age of 25 (60 percent).

It what turned out to be a closer than expected race for second, Fox's Night at the Museum: Secret of the Tomb was able to outpace Sony's Annie with an opening weekend take of $17.10 million. The two films clearly split up the family audience this weekend and may remain close to one another throughout the rest of the holiday season. While it was able to claim second, Night at the Museum: Secret of the Tomb opened significantly below expectations. The third installment of the Ben Stiller led franchise had already been expected to see a significant drop-off from the performance of its predecessor, 2009's Night at the Museum: Battle of the Smithsonian (which debuted with $54.17 million in its first three days). Secret of the Tomb debuted 26 percent below the $23.24 million start of 2011's Alvin and the Chipmunks: Chipwrecked.

Night at the Museum: Secret of the Tomb opened with $5.66 million on Friday, increased 16 percent on Saturday to gross $6.55 million and decreased 25 percent on Sunday to gross $4.89 million. That placed the film's opening weekend to Friday ratio at 3.02 to 1. Family films tend to hold up very well throughout the holiday season and that will likely be the case for Secret of the Tomb. The film received a B+ rating on CinemaScore.

Annie debuted in third with $15.86 million. The musical remake starring Quvenzhané Wallis, Jamie Foxx and Cameron Diaz opened towards the lower end of pre-release expectations. That is positive news for Sony, especially after the events of the past week that led to the cancellation of the studio's release of The Interview. Annie trailed Night at the Museum: Secret of the Tomb by just $1.24 million this weekend. Annie opened 32 percent below the $23.24 million debut of the previously mentioned Alvin and the Chipmunks: Chipwrecked.

Annie started out with $5.29 million on Friday, increased 15 percent on Saturday to gross $6.08 million and fell 26 percent on Sunday to gross $4.49 million. That gives the film an opening weekend to Friday ratio of 3.00 to 1. Like Secret of the Tomb, Annie is likely to hold up nicely throughout the holiday season, though between the two films, it will face more direct competition from Disney's Into the Woods beginning on Christmas Day. Annie received a promising A- rating on CinemaScore, which strongly suggests that the film is going over much better with audiences than it has with critics.

Fox's Exodus: Gods and Kings landed in fourth with $8.11 million. The pricey Ridley Scott directed biblical epic starring Christian Bale was down a very sharp 66 percent from last weekend's debut. Poor reviews, mixed word of mouth and direct competition from The Battle of the Five Armies are all clearly taking a toll on the film. Exodus: Gods and Kings has grossed a lackluster $38.94 million in ten days. That places the film 7 percent behind the $41.87 million ten-day take of Son of God earlier this year.

The Hunger Games: Mockingjay - Part 1 followed closely behind in fifth with $7.88 million. The third installment of Lionsgate's blockbuster franchise was down a solid 38 percent from last weekend. Mockingjay - Part 1 has grossed $289.36 million in 31 days, which leaves it just $10.64 million away from becoming the second release of 2014 to reach the $300 million domestic milestone.

In its first weekend of wide release Fox Searchlight's Wild took in $4.11 million to place in sixth. The critically acclaimed drama starring Reese Witherspoon claimed a per-location average of $3,877 from 1,061 locations. Wild has grossed $7.17 million in 19 days of release.

On the limited front, UTV's PK was off to a very strong start with $3.57 million from 272 locations. That gave the Hindi language comedy starring Aamir Khan a per-location average of $13,108 for the frame. PK finished in ninth place among all films this weekend.

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