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. Since the beginning of cinema, everything has been done the same. There are many inefficiencies. Our projects and client base are focused on distribution, exhibition, and production. For example, on the production side we are working with a company and technology provider that has experience in building production studios, backed by English, European, and American investors. They plan to build a high-tech, modern production studio in Europe that will feature the latest in virtual production technology. We hope to develop a production facility that’s affordable. 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 training will make distribution plans more effective and efficient. A theatre can use data to convince a distributor to play a certain type of film on their screens. A distributor or filmmaker can use data to convince a theatre that their movie should be shown in a certain market. We’ve talked to the studios, and they love the concept. 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 work with innovative technology developers and content developers who are interested in trying 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. Many people believe that this industry is poised for growth and are optimistic about its future. Nowwe 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 hear more and more that voices are being ignored. 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 issue has been growing for more than a decade, almost 20 years. It started when the studios stopped releasing mid-range movies at the height of DVD boom. They didn’t need to share and exhibition, so windows shrank. This was exacerbated by streaming and the pandemic. The pandemic, however, basically told everyone that this model doesn’t really work and that we should go back to exhibition. Then we had the strike. So there’s just been this [revenue] delay.[supply]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. Many movies don’t reach the audiences they should. They’re not getting in as many theaters as they should. We want to eliminate bottlenecks and old thinking.JB :
We live in the digital cinema era. The promise of digital cinema is yet to be realized. There are no more real or virtual print charges. Theatre owners were supposed use all the great data they now have about audiences. If we could get more movies in theatres, they could program so much better and more efficiently for specific audiences. If companies out there are willing to take risks, we’ll to see a lot of innovation in the next couple of years.[demographic]Fortune favours the brave.
PC
: Christopher Nolan referenced in his Oscar acceptance speech that we’re only 100 years in as an art form. There are many things that can change in the future. Cord Jefferson [best director, Oppenheimer] redefined risk in a speech that I found very interesting. He spoke about a $200m movie, which seems like a risk even though [original screenplay winner for American Fiction] this is tried and true and people love these movies.[Hollywood says]Spread that risk and that opportunity around. The rom-com
Anyone but You grossed more than $100m. The market is missing rom-coms with gross of $50m to 100m, and this is costing us admissions. People love rom-coms. You have to take some risks to make those films. Is it possible that after decades of declining admissions, those numbers could start to creep back up?JF :
Absolutely. We never fully benefited from the digital cinema revolution, as Jackie described. The pandemic and the strikes also played a part. Now is the time to fully utilize these technologies. We hope to contribute to the improvement of marketing with our projects, instead of a 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 look at the industry as a global market. Wall Street and many
reporters focus too much on the domestic market. This is a mature market with a stable screen count. There are markets around world that were growing in admissions before the pandemic. The global marketplace is poised for true growth.JB:[American] 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.[US and Canada]Is enough being done to court older audiences?
JB: The older audiences is a demographic to focus on. This is a matter of awareness. During the pandemic older audiences discovered streaming, but unlike cable streaming did not have advertising
. They are no longer watching ads and this is a group that is less frequently 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 know about their community, the more likely they are to bring them to the cinema. We are simply in a completely new era of marketing. This industry relied heavily on TV advertising to reach its audience. Now, that’s largely gone. It’s harder for titles that depended on an older audience… And independent films are attracting a younger audience. Poor Things[several years ago] 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 screens or exhibitors close?JF : You will see acquisitions, mergers, and consolidation at all levels of companies. You’ll see a lot of consolidation in exhibition and not necessarily shrinkage of footprint. 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”. The consumers thought they could stream anything at home. We never thought Blockbuster would compete with movie-going. The silver lining is that movie theatres are offering something completely new and people are returning in record numbers to see certain movies. If the supply is moving to home theatres and there is no valuable supply in the theatres, that’s 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. It produced some extremely 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. Netflix was the only one who didn’t get this data. 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 , the team and all of CinemaCon 2024 the best. We’re glad we can just get down to business.
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