The Downside of Good Ideas

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Sat, 03/27/2010 - 20:00 -- Nick Dager

As a journalist I thrive on new ideas – good or bad – because ideas are interesting and of course because they can make for compelling stories. For that reason the ShoWest convention held in Las Vegas last month was especially enjoyable for me because it seemed as if you couldn’t turn around without coming across another fascinating project product business development or new idea. Of course 3D dominated most conversations and there were screenings of several 3D movies including the eagerly awaited Toy Story 3. But it turns out that one man’s dream can be another man’s nightmare and that if for example you have a small or mid-range movie theatre chain to run too many good ideas may just add to an already growing state of confusion. Call it the downside of good ideas. I had a trade show elevator conversation with an exhibitor who seemed to fit that description. He manages a chain of twenty or so theatres and was on his way to a meeting when we chatted. And he seemed stressed. What if he suggested 3D turns out to be a fad again after all? What if he was already too late to cash in on the really big premiums that exhibitors are currently earning on 3D? I told him that I’m personally convinced that 3D is definitely here to stay and would be a smart investment for the long term but I acknowledged to him that it’s easy for me to be certain; I don’t have to risk thousands of dollars on my conviction. Welcome to the second decade of the digital cinema transition. The pressure to act quickly – and to raise and spend thousands of dollars quickly – only heightens the stress that many exhibitors understandably feel. As does the fact that by its very nature digital technology opens the door to an almost infinite number of refinements enhancements and innovations. The days are over when an exhibitor could purchase a film projector and consider that part of his work completed for years – sometimes decades. Digital technology means ongoing upgrades and refinements; the good news is that the upgrades will add value to your business; the bad news is that it means you have something else to evaluate. The first decade of digital cinema was about getting many pieces of a puzzle put into place – or at least reasonably close to in place. That task has essentially been completed and as the economy continues to improve the pace of the transition from film to digital will quicken.  So much so that exhibitors who failed to make commitment to install digital technology weeks or even months ago will in all likelihood miss out on all the economic benefits of what promises to be a summer of 3D blockbuster movies. The digital projector manufacturers at the show were telling their customers – privately for the most part but in some cases publicly – that if they didn’t have a purchase order in hand or were at least ready to make a firm commitment at the show chances were very good that it would be sometime in the fall at the earliest before their systems could be delivered. The reason? All of the manufacturers are working overtime to fulfill existing orders. Which brings me back to ShoWest. There were a remarkable number of interesting ideas at this convention related to virtually every aspect of the movie theatre business and what follows is a brief take on a random sampling of some of my favorites. In coming Reports we’ll examine these and some of the other ideas presented at the show in greater depth. Healthy Eating There is a growing effort across the country to urge Americans to eat a healthier diet. As an example New York State where I live is debating a tax on soft drinks in part to raise needed revenue but also as a measure to curb obesity. These sorts of initiatives are certain to continue and theatres will feel some of the impact. During a press conference I asked John Fithian president of the National Association of Theatre Owners how exhibitors will address the issue. While acknowledging that he personally believes in healthy eating and encourages it in others theatres can have little real impact on the American diet. He noted that air-popped popcorn was a major issue in the 1990s and theatre owners embraced the concept only to find that the public didn’t buy the healthier popcorn. He also pointed out that the average person goes to the movie just over four times a year and said “That’s not eating. People go to the movies to escape and the concessions are part of that experience.” He also said that theatres are continuing to add healthier items to their menus with success in some locations and he predicted that would continue. There were several examples of healthier items introduced by food vendors at the show. Coke for example was highlighting an iced tea dispenser that among other things offered sugar free green tea. My personal favorite somewhat healthier food – and something of a hit at the show – was M&M’s pretzels which have about half the calories and fat of M&M’s peanuts and were delicious. Customer Service TPG Rewards provider of promotional movie tickets launched an innovation that to me seems certain to be popular:  Movie Cash delivered right to consumers’ mobile phones. “We launched our first Movie Cash program delivery mechanism in 1993 which were paper certificates ” says TPG’s president and CEO John Galinos. “Now technology has enabled us to literally and affordably deliver Movie Cash to a consumer’s mobile phone.  It’s extraordinary how far technology has taken us and our clients – from major consumer packaged goods to Hollywood studios – are embracing our capabilities.” Coined by TPG as m-Movie Cash the service can be used for any movie of the consumers choice even when “no coupon no pass” feature is displayed. TPG says it will offer its first m-Movie Cash program later this year. 3D Glasses There were a significant number of international attendees – people from all over the world – and in my view something of an Australian invasion. Three Australian companies at the show offered ideas and services that really caught my attention. The first was Look3D. The state of 3D glasses is currently in flux and there are many choices. Some exhibitors swear by recyclable glasses offered by companies like Dolby because they have found them to be easy to handle and in the relatively short term to be less expensive than disposable glasses like those offered by companies like RealD. At some point – and long before we get to successful glassless 3D in theatres – it seems clear the industry will have to settle on some sort of glasses standard. Until that time Look3D is betting that RealD maintains its sizable market share. Australians Rhett Adam and Warwick Purves who come from the eyeglass industry founded the company. They’re selling a complete line of RealD-authorized 3D glasses that range in price and style from about eight dollars – with colorful frames designed for teenagers – to a high of less than fifty dollars with frames for adults. For people like me who wear eyeglasses they also offer clip-ons that are very lightweight and solve the problem of having to wear glasses over glasses. Their plan is to have exhibitors sell the glasses at the concession stand. Alternative Content The digital cinema era has already seen a wide and growing variety of programs make their way into movie theatres and exhibitors are getting more adept at building new audiences for these shows. I’ve seen alternative content providers working the halls and exhibit floor in the past but I don’t recall one actually exhibiting on the show floor. The Australian company CinemaLive was there in full force with programs ranging from opera and ballet to comedy and if you have ever been around younger children you’ll know the name The Wiggles. Their children’s television show is an international success on the order of Barney and as CinemaLive’s director Janelle Mason explained to me the company is offering the program to exhibitors. Theatre Design Finally at an ever-increasing pace theatre design is changing and the movie theatre of a decade from now will most surely not resemble the theatres of today. Screens and getting bigger seating arrangements are shifting to accommodate the challenges of watching 3D projection booths are getting smaller and digital signage and changes in food offerings are reshaping concession stands. Drive-in theatres are not immune to this change and digital technology played an integral part in the design of a drive-in theatre in Melbourne Australia. I learned about it from Keith Pullinger and John Wall partners in Cinema Next a cinema and leisure consultancy based in London. (For the record my Australian invasion theme still works because the theatre’s in Australia and Pullinger is Australian and he bought me a beer.) This idea would not work everywhere if only because of the amount of real estate it must consume but the theatre is an all-digital six-screen operation in the shape of a hexagon. The concession stand restrooms and projection booths are all housed in a large hexagon in the center. For me the cleverest part of the idea is that there are also seats inside that form six theatres where the exhibitor can play movies during the winter months.