(L-R): John Fithian, Jackie Brenneman, Patrick Corcoran of The Fithian Group

Source: IAH BEARDEN-VRAI

(L-R): John Fithian, Jackie Brenneman, Patrick Corcoran of The Fithian Group

Longtime advocates for the global exhibition industry, former NATO top brass John Fithian, Patrick Corcoran and Jackie Brenneman return to CinemaCon next week under the banner of their new venture, The Fithian Group.

The consultancy has been up and running since November last year with the goal of helping clients build their businesses in exhibition, distribution, and production.

Screen spoke to the equal-share founding partners about their vision and goals, plans for a European studio facility, direct distribution, and the value of the international marketplace.

Former National Association of Theatre Owners president and CEO Fithian served in-house for more than two decades at the trade association. Corcoran was vice president and chief communications officer and director of media and research and California operations chief, while Brenneman served as EVP and general counsel and president of The Cinema Foundation.

CinemaCon runs April 8-11 at Caesars Palace in Las Vegas.

What has The Fithian Group been doing since you announced the consultancy?

John Fithian: We are digging into projects that are about business models or changes in business practices that can grow the cinema industry. Everything’s been done the same way for 100 years and there are inefficiencies. We’re tackling a lot.

Our projects and our client base so far are focused on production, distribution, and exhibition. To give you an example on the production side, we’re working with a technology provider and a company that knows how to build production studios backed by English investors, European investors, and American investors. Their plan is to build a modern, high-tech production studio in Europe featuring the best in virtual production technology. There are a lot of great European and American filmmakers who want to shoot in Europe. We hope to develop a production facility that’s affordable.

And what about your distribution and exhibition clients?

JF: Patrick, Jackie and I have worked for years to develop a software-based, data-driven, AI-driven, efficient way to enable direct distribution between filmmakers and exhibitors. We’re working on a project to build a company that will run a new theatrical distribution system.

Can you elaborate?

Patrick Corcoran: It’s a platform that will allow distributors, rights holders, filmmakers and theatre owners to connect directly to increase the supply of movies to theatres and broaden the distribution footprint. Data and AI-based learning will help make distribution plans more efficient and effective. A theatre will be able to use specific data to show a distributor why a particular type of movie should be played on their screens. A filmmaker or distributor can use data to show a theatre why their movie should be played in that market. We’ve spoken to the studios and they love the idea. We think this will also benefit independent studios.

JF: On the exhibition side, we’re working on mergers and acquisitions to help clients explore synergies. We’re working with innovative technology developers or content developers who want to try something new in cinemas. We can help start-ups with their business models and bring them to our former members, our friends across the exhibition industry, to have them find new technologies and new offerings to grow their businesses.

What can you do now that you couldn’t do when you were at NATO?

PC: As trade association executives we couldn’t talk about business models because we had to maintain a separate role and advocate for the whole industry. There are a lot of people who believe in the future of this industry and believe it’s poised for growth. Now we can help them bring real business practices and business models to market.

Jackie Brenneman: There’s so much data out there to show that there’s a growth opportunity if people in this industry seize upon it. We continue to hear that voices are being left out. Younger, more diverse audiences across the whole ecosystem aren’t being served, people aren’t able to make decisions they think would grow the business.

What are some of the biggest challenges facing exhibition today?

PC: Number one is there aren’t enough movies. This has been gathering steam over more than a decade for almost 20 years… This started at the height of the DVD boom when the studios went into the home and stopped putting out those mid-range movies. They didn’t have to share [revenue] with exhibition, and windows shrunk. Streaming and the pandemic exacerbated that. However the pandemic basically told everybody that that model doesn’t work and we should pivot back to exhibition. And then we had the strikes. So there’s just been this [supply] delay.

Where is the opportunity in that?

PC: There’s a huge independent distribution market out there, which is part of our thinking on direct distribution. A lot of movies aren’t reaching the audiences they should, they’re not getting into as many theatres as they should. We want to eliminate the bottlenecks and the old thinking.

JB: We are in a digital cinema era. There are no longer real or virtual print fees and yet the promise of digital cinema has yet to be realised. Theatre owners were supposed to use all this great [demographic] information they now have about their audiences. They could be programming so much more effectively and efficiently for specific audiences if we were able to get more movies into theatres. If companies out there are willing to take risks, we’ll to see a lot of innovation in the next couple of years.

Fortune favours the brave.

PC: Christopher Nolan referenced in his Oscar acceptance speech [best director, Oppenheimer] that we’re only 100 years in as an art form. There is a lot that can change going forward. I was also struck by Cord Jefferson [original screenplay winner for American Fiction] who redefined risk in his speech. He spoke about a $200m movie, which seems like a risk even though [Hollywood says] this is tried and true and people love these movies.

Spread that risk and that opportunity around. The rom-com Anyone But You grossed over $100m. Those rom-coms that gross $50m to $100m are missing from the market and it’s costing us admissions. People are hungry for rom-coms. You have to take risks to develop those films. There’s a range of movies out there of various genres and price points for exhibitors to put in their theatres at the right time of year.

After decades of gradual decline in admissions, is there a world where those numbers might start to creep up?

JF: Absolutely. And part of that is that we never got to completely take advantage of the digital cinema revolution as Jackie described, because the pandemic hit us, and then the strikes hit us. But now the opportunity to fully take advantage of those technologies is there. Also, marketing is getting much better and we hope to help that progress with several of our projects instead of a broad-based, cannon shot marketing. It’s not a lack of demand to see movies in theatres that hits admissions; it’s a lack of breadth in the content targeted specifically to the audiences that want to see them.

Is this a lesson for the global industry too?

JF: Yes. We should focus on the business as a global marketplace. Wall Street, and to a degree a lot of the [American] trade reporters, focus excessively on the domestic market [US and Canada] and that’s a mature market that’s been at a stable screen count for a very long time. But there are markets around the world which pre-pandemic were growing aggressively in admissions. The global marketplace is poised for true growth.

JB: You can look at markets like Japan and others where there are strong local supply of movies in addition to the big international titles and tentpoles. We need to deliver a promise to movie-goers, which is if you show up at a movie theatre on any given day, whatever mood you’re in, there will be a movie for you.

Is enough being done to court older audiences?

JB: The older audiences is a demographic to focus on. This is an awareness issue. Older audiences found streaming during the pandemic, but unlike cable, streaming didn’t have advertising [several years ago]. But they’re no longer watching advertisements and this is a demographic that’s much less chronically online. The studios are shrinking their marketing spend and they’re certainly not going to put major effort into trying to get an audience they don’t know where to find on the internet.

This is the power that movie theatres have. The more they learn about their communities, the more they can bring them to the movies. We’re simply in a new era of marketing that is completely untested. This entire industry has rested on TV advertising as a huge part of its reach and now that’s mostly gone.

PC: They’re coming back in the same numbers for mainstream titles. But for those titles that were dependent on an older audience, that’s harder… And there’s a rising younger audience for independent film. Poor Things and Everything Everywhere All At Once are examples where younger audiences drove a huge portion of that movie-going.

The 2024 release calendar is smaller due to strike-induced production delays. Will we see exhibitors go under, or screens close down?

JF: You’ll see acquisitions, mergers and consolidation at all levels and all sizes of companies. Those that have their act together can incorporate assets that are underperforming and bring them up to the performing level of their existing assets. You’ll see a lot of consolidation in exhibition and not necessarily shrinkage of footprint.

PC: Say there aren’t enough movies to fill 15 screens, but maybe there’s enough for 10. So you’re putting in a kitchen or an arcade, or bowling; entertainment and activities where you’re looking at your market to see what people are interested in so that you can fill in the off times when people aren’t coming to watch movies.

How do you view the relationship between streamers and exhibition?

JB: Streaming was always competition to cable and not to theatrical – until it wasn’t, until consumers started to think, ‘Oh, I guess I can stream things”. They could always watch whatever they wanted in the home; we never thought that Blockbuster was competition to movie-going, but somehow this happened. The silver lining of the pandemic is that movie theatres offer something completely different and people are coming back in record numbers for some movies. But if the supply is all moving to the home and there isn’t a valuable supply in theatres, then that is a problem. It’s a supply problem, not a location problem.

JF: The pandemic was bad for the entire movie industry in lots of ways. One good thing it did was produce some extraordinarily valuable data. All types of release strategies were employed just to get movies out – straight to streaming, simultaneous theatrical and streaming, very short windows, and more traditional, longer theatrical windows.

Everybody got to look at all this data and lo and behold it showed that a movie that has released exclusively in theatres first subsequently performs better on streaming than if had gone to streaming directly. Fortunately that data got through to virtually everyone, except for Netflix. When we were at NATO we worked a lot with Amazon and Apple and we continue to talk to them  about movies getting theatrical releases.

What are your CinemaCon priorities?

JF: It’s really exciting for the three of us to spend most of the week in a conference room doing business deals instead of being responsible for the whole show. We wish Michael [O’Leary, NATO head] and the whole team the best of shows for CinemaCon 2024. We’re glad we can just get down to business.