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What a difference a year makes. Last year “Avengers: Endgame” blew apart open opening-weekend box-office records, earning a box office of $357 million in North America, $100 million more than its predecessor. Endgame went on to earn an amazing $2.8 billion worldwide.
This feels like a long time ago in a galaxy, far far away. The exhibition industry on April 26, 2019, is a far different one than the one we are experiencing now. We are on hold, probably until mid-July. A divine hand has hit the remote control pause button on this 100-year-old plus industry.
During this hiatus, it is becoming more and more evident that the exhibition industry is deeply and maybe forever fractured. A series of schisms have occurred, and a widely dispersed series of perspectives have been made more and more evident. This is not a cohesive business and the lack of clear voices is damaging an already bad situation.
On Friday of this week, AMC made an announcement.
“As we plan our reopening, the health and safety of our guests and associates is our absolute highest priority. To be able to open, we also need a line of sight into a regular schedule of new theatrical blockbusters that get people truly excited about returning to their favorite movie theaters. Those blockbusters are scheduled to return this summer, beginning with Warner Brothers Tenet and Disney’s Mulan, with many more major titles scheduled immediately thereafter,” AMC said in their statement.
“While we expect to open our theaters in the weeks ahead of these new blockbusters, utilizing creative programming of immensely popular previously released films, we would be wise to do so only directly in advance of the release of major new movie titles,” the statement continued. “AMC is currently working through every detail required to successfully showcase these exciting new releases in an environment that’s safe and welcoming for moviegoers, and we will share those details as we get closer to the dates when our theaters will reopen.” Yada Yada Yada.
Tenet, Christopher Nolan’s latest movie release on July 15th, and then Mulan appears on July 24th. I imagine that AMC is looking to re-open its doors pretty close to July 4th.
AMC is a mysterious company. At one time its largest shareholder was Wanda Dalian, then they were partially bought out by Silver Lake Private Equity. Silver Lakes Chairman is Kenneth Yeh-Khang Hao who was responsible for establishing Silver Lakes Asian presence and ran their Hong Kong Office. I am curious by nature and I do not have any factual reference points, but my suspicion is maybe Silver Lake was doing some business associates a favor in buying Wanda Dalian partially out. It is well known that the Beijing government was not too happy with this investment. The name for this firm in China is Yínhu Ziben. After its founding, Silver Lake made some of its first investment in emerging Chinese technology firms. I thought initially that the name Silver Lake came from that Bohemian residential area in Los Angeles, but I was shocked to find out how many Chinese take-out restaurants had the name Silver Lake.
I think that behind Amos Aron is a complex web of equity that is truly calling the shots and we, for the most part, will never really understand the true motivation behind their decisions. They have shareholders in both derivative and competing industries.
All that aside.
While I certainly think that prudence is warranted and that on an American wide circuit such as AMC, it does have to err on the side of caution. What really stood out to me is how disconnected this industry has become and how really there is no single voice that is coordinating the needs of all theaters. It is becoming more than evident that a schism has occurred in the make-up of the exhibition industry. NATO, because it receives a fee per screen if it is to be practical must really speak for the major circuits. That is what the circuits are paying for. They want their intent and their interests expressed. And that is what NATO does. The interests of a chain that has 630 locations are far different from a small circuit that has 5 locations.
One does have to ask can both of these groups be best served under the auspices of one organization, as 150,000 people who previously held employment in the exhibition business who are now without jobs, one would think that the time to speak with a common purpose and a common voice would be now, but it is not happening. I would have hoped that service would have arisen to provide advice on the PPP, to talk about various alternative content strategies and safety protocols collectively established. I really have seen none of this.
I was truly hopeful that the nascent ICA would step up and really start speaking forcefully with and for the independent cinemas. This is not happening. There are some passionate people on board, but getting a collective view seems to be a problem. Communication also seems to be a deep challenge for this group. I am hopeful that the ICA will reach out to leaders within this industry to provide counsel to this organization and start fulfilling its promise. To date, it has been fairly dormant on all fronts. I believe as its stand now, it is an impediment to its own mission statement. Now there is one exception, their filing against the dismantling of the Sherman Act, was the strongest and most evocative submission to the Department of Justice.
While the boyars of motion picture exhibition are stumbling, those wild men and women of the drive-in industry are providing a huge base of inspiration. Malls, restaurants, and indoor theaters are setting up and using the idea of social distance drive-ins as a tool to remind a sheltered public that movie-going can still exist and it can be safe. They are discovering phone apps, like Fanfood to liberate popcorn from having to be solely dependent on pickup from a concession stand. Fanfood is offering free service for 60 days in order to support drive-ins. This is a very solid company with a huge heart.
What is seemingly beginning to evolve is four distinct forms of exhibition. I believe that this pandemic is going to bring back more non-circuit-based movie going. This first one is traditional large circuit exhibition, which I think will suffer some severe shrinkage, the second is an expansion of the concept of the urban-based arthouse, offering diverse and increasingly global content, the third is the small center and community-supported theater which develops its own form of the audience primarily based on retro product, the fourth and final is the drive-in, this is about to experience a huge level of growth, especially in the area of pop-up drive-ins.
I believe only the large circuits will still sustain themselves solely by studio releases, the other forms will experiment and define themselves in time with various manners of content. As I have stated before, the studios will have to learn a deep lesson for the need of a truly vertically marketplace and although those guys at Comcast are pretty excited about Trolls 2, they really are leaving a ton of money on the table.
Each of the segments needs their own voice, a strong and independent voice that speaks for their distinct form of exhibition. Hopefully, one day the lessons of this pandemic will bring these voices together to speak collectively for exhibition……because it is sure as hell not happening now.
While the theaters are shuttered we wait, but I can tell you that at 1701 John F. Kennedy Boulevard, address of the headquarters of Comcast, the parent company of Universal, plans are being made to further erode the future of theatrical exhibition. They are currently building rationales that are being leaked on the magnificent future of all things streaming.
By the way, another investment that Silver Lake has made is Endeavor Group Holdings, or simply Endeavor, formerly known as William Morris Endeavor Entertainment is a private American holding company for talent and media agencies with its primary offices in Beverly Hills. The company was founded in April 2009 after the merger of the William Morris Agency and the Endeavor Agency. Endeavor represents artists in movies, television, music, theatre, digital media, and publishing It also represents the NFL and NHL.
There is a deep vacuum of leadership within this industry, voices must arise and tell the world movie-going is here and here to stay.
