National Association of Theatre Owners president and CEO John Fithian didn’t mince words when addressing the reason why releasing movies in cinemas and in the home at the same time is a very bad idea.
“I am pleased to announce that simultaneous release is dead as a serious business model, and piracy is what killed it,” Fithian said when giving his annual address at CinemaCon in Las Vegas on Tuesday. “When a pristine copy of a movie makes its way online and spreads, it has a very damaging impact on our industry.”
Throughout the pandemic, some Hollywood studios, including Warner Bros. and Disney, experimented with day-and-date releases in an effort to grow their streaming services. In fact, Warners sent its entire 2021 slate simultaneously to cinemas and to HBO Max, including such tentpoles as Dune. The studio abandoned the policy beginning in 2022 and committed to a 45-day window.
“When analyzing title after title, it becomes very clear that spikes in piracy are most drastic when a movie is first available to watch in the home: It doesn’t matter if it’s available via premium video-on-demand or subscription video-on-demand,” said Fithian. “Robust theatrical windows protect against piracy. If a major title that people are clamoring to see in theaters is released too quickly to the home and then pirated, the temptation to stay home and watch pirated films becomes greater for many potential moviegoers.”
During his speech onstage Tuesday at CinemaCon, Motion Picture Association chairman and CEO Charles Rivkin likewise talked about the perils of piracy, regardless of when it happens in a film’s life. “On average, prerelease piracy can take away as much as 20 percent of box office revenue — your revenue,” he told theater owners.
Rivkin didn’t specifically address the amount of piracy due to simultaneous releases orchestrated by MPA member companies, which include the five major Hollywood studios and Netflix.
“And with the right efforts to build awareness with consumers, lawmakers and the media, we can continue to build a culture that recognizes piracy for what it is — theft, pure and simple, and a direct threat to creators, the creative workforce and the creative community everywhere,” Rivkin said.
“In 2017, we created the Alliance for Creativity and Entertainment — or ACE as we call it — a global coalition of our six MPA studios and the world’s biggest entertainment companies, including Apple TV+, and Amazon Studios, AMC Networks BBC and Canal Plus. ACE members are now almost 40 strong, and we just added a new live sports tier. In fact, I’m proud — this morning — to announce that BeIN Sports, a Qatar-based sports broadcaster available in 41 countries around the globe, has signed,” Rivkin said.
The MPA and ACE’s antipiracy efforts, in concert with other groups, have helped reduce the number of illegal websites and streaming subscription services in North America from a high of 1,400 in 2019 to about 200 today. He also said the MPA recently concluded an agreement with the Department of Homeland Security that embeds MPA investigation experts inside DHS itself.
Continuing, Rivkin said he was “encouraged by our progress in this ongoing fight against piracy, and I’m also encouraged by the surges that we are currently seeing at the global box office. These current box office successes show that moviegoers still enjoy the sanctity and the social headiness of shared space.”
Indeed, both Rivkin and Fithian touted the strength of the box office as it emerges from the devastating COVID-19 pandemic, which resulted in unprecedented theater closures.
“The slate of films in 2022 and beyond is robust and full of massive box office potential. The renewed commitment of our studio partners to exhibition is on full display this week. I am grateful that a strong number of top studio executives are here this week, and believe their presence at this historic convention signals a renewed commitment to the important role that moviegoing plays in the industry ecosystem,” Fithian said.
The Batman filmmaker Matt Reeves kicked off the morning state-of-the-industry session by thanking cinema owners for keeping the “flicker of hope” alive when the pandemic struck. He said he believes wholeheartedly in the theatrical experience. “Helping to play a role in your success is very important to me,” said Reeves when noting that Batman has earned north of $700 million.
“The success of The Batman was a true team effort. We could not have gotten to this place without … the theatrical experience. For that, I thank you from the bottom of my heart. As a lifelong fan of the movies, I treasure what you do,” Reeves said. “There’s a sanctuary to be found in the movies.”
In prepandemic times, the theatrical window was 74 days to 90 days. That window has now shortened to 45 days, which theater owners are now OK with. (For their part, studios have long argued that most movies make most of their money in the first month.)
“We are thrilled that distributors are releasing movies with windows, and that studios and exhibitors are working together. There is a diverse mix of titles to look forward to in the months to come,” said Fithian. “Blockbusters are the keystone of this industry, and we have a great slate of really big movies. But midrange titles and films aimed specifically at families are crucial as well. We’ve got all of that. It’s not rocket science: More movies result in more box office.”
Fithian pointed to the astounding success of Sony and Marvel’s Spider-Man: No Way Home, which has earned $1.9 billion worldwide, and noted that families are now returning in earnest to cinemas, evidenced by Paramount’s Sonic the Hedgehog 2 (which has grossed $288 million globally so far).
Fithian, who has often dismissed the perceived threat of streamers in the past, stayed away from that topic this time around. On April 19, Netflix disclosed that it lost 200,000 subscribers in the first quarter, sending its stock plummeting. The development is something of a psychological boost for theater owners, allaying concerns that streaming will trump moviegoing.
At the end of Fithian’s speech, he introduced a new series of films created by young and aspiring filmmakers designed to promote moviegoing that NATO is asking its members to share on their screens and on social media. The filmmakers are Kelly Schiesswohl and Noah Sterling for Oddly Satisfying Cinema; Ed Hellman and Katie Staab for There’s Nothing Like It; and Ameer Kazmi for Sincerely, Management.
“I believe nothing will ever threaten the theatrical experience, not streaming, … not even Martians landing, I say as a joke,” said Cineplex chief Ellis Jacob, adding that many have written the exhibition industry’s obituary in error. “We were tested by COVID. Now all that remains is opportunity.”
Jacob received NATO’s top Marquee Award prior to Rivkin and Fithian taking the stage.
Chris Gardner contributed to this report.