Exhibitors want audiences to watch sports, concerts and live events in their movie theatres, and audiences are responding.
While alternative content has existed for years on the sidelines, it has yet to become a regular attraction in the moviegoing landscape.
But with the next generation of digital multiplexes and satellite technology, plus a bit of successful legal wrangling, alternative content is
poised to become a consistent presence in movie theatres—or, as they're aching to be called, entertainment complexes.
With the bulk of ticket sales occurring on weekends and holidays, movies are a time-specific business. A live event—be it a weekday
final of a sports game or President Obama's inauguration—gives exhibitors the opportunity to sell out theatres during non-peak times.
"It's all about utilization," explains Tom Stephenson, president and CEO of Dallas, Texas-based Rave Entertainment, noting the success
of the
Hannah Montana/Miley Cyrus: Best of Both Worlds Concert movie during the 2008 Super Bowl weekend. Rave theatres also had
success showing the BCS (Bowl Championship Series) Florida vs. Oklahoma game in live 3D, a breakthrough moment for Cinedigm's
2K digital-cinema network. The Thursday night event drew in crowds at a quieter time for the theatres, with higher ticket prices to boot.
Bob Goodrich, president of Goodrich Quality Theaters in Grand Rapids, Michigan, measures his success against "the third week of a film
on a Tuesday night. We're not interrupting a film during their first week. I have ten screens per building, so when I have a Fathom event
we never interrupt a movie that opened the past Friday. We always interrupt a movie that's at least in its third week."
While these one-off events can add ancillary revenue to a theatre, they also complicate marketing. Low-cost, Internet-based viral marketing
is the rule. "We're not utilizing mainstream media, television, radio and newspaper," reveals Kurt Hall, president and CEO of National CineMedia,
whose alternative-content division NCM Fathom orchestrates the marketing for the events it distributes. "Those mediums are just too expensive
and thus the model doesn't work. We very heavily rely on in-theatre marketing to support the event, as well as Internet marketing, whether it's to
fan clubs or other Internet organizations that are very highly involved with whatever content that you're showing."
Besides promoting the event in the lobby, pre-show and online, cinemas alert patrons on their e-mail lists. Exhibitors are split on whether e-mail
blasts about these niche events appeal to their regular moviegoers. Ruth Daniels, VP of sales and marketing for Michigan-based circuit Emagine
Entertainment, questions the merit of sending blasts to the theatre's 30,000 members "Most of these people sign up for showtimes, so they're
interested in movies. It doesn't mean they're interested in Green Day [an alternative rock band] or Sugarland [a country band]. Those are two
different audiences right there. You don't know who you're hitting."
Bob Goodrich looks at it a different way. "I'd like to super-serve our core audience—that's where alternative content could really work.
The moviegoer that went to see
Inglourious Basterds last weekend would probably go see something Tuesday night as part of alternative
content, because they just love coming to the theatre." He sends e-mail blasts to the 125,000 patrons who receive the "same show clock I
send to my ushers. We let people know two to three weeks in advance, and we often have questions to make our audience interactive.
Sometimes we'll get 2,000 to 3,000 responses to a question."
The debate over the effectiveness of marketing to a theatre's usual moviegoers reflects one of the core questions about alternative content's
audience: Are they regular moviegoers, or those who usually seek their entertainment elsewhere? While conventional wisdom often touts
alternative content as a way to bring in new customers, these added programs also appeal to those who are already filling the theatres.
"You generally find that avid moviegoers are avid out-of-home entertainment pursuers. These are people that get out and go to movies and
go to events," observes Dick Westerling, senior VP of marketing and advertising at the nation's largest circuit, Regal Entertainment. In turn,
these viewers can go on to "create a significant word of mouth to help grow that niche," expanding the audience to people who "maybe aren't
traditional moviegoers, but they'll take it in, because there are markets where you don't have access to watch an opera in any form, or a
Metropolitan Opera performance, in a nice comfortable setting with a good presentation."
Alternative content occupies an intermediary place between television and attending a live event that appeals to audiences. It offers a shared
experience, better presentation, and more of a thrill than watching at home. At the same time, the theatre environment offers more comfort,
convenience and affordability than going to a stadium or opera house.
Alternative-content events can be scaled up or down depending on the expected audience.
The Michael Jackson: This Is It concert film, which
will be distributed by Sony this fall for a two-week run, represents a kind of large-scale alternative content that studios such as Disney have pursued.
Hannah Montana/Miley Cyrus: The Best of Both Worlds Concert,
Jonas Brothers: The 3D Concert Experience and The
X-Games 3D: The Movie have
had small wide releases of 700 to 1,300 screens, a 3D premium on the ticket prices, and a run that comes with an expiration date. In addition to the
music and sports, they also include behind-the-scenes footage, interviews or vignettes that turn the movies into more than a filmed event. Beyond that,
there's room to attract an even smaller niche. To serve a segment of fervent Michael Jackson fans, Cinedigm stepped in to show a live broadcast of the
Michael Jackson memorial, which the distributor projected live into 85 movie theatres.
The Metropolitan Opera events, Fathom's runaway success, draw audiences that could, and do, attend the opera itself. "People have told us they like it
better than actually going to the Met," notes Hall. "They don't have to get dressed up, you can go to the bathroom whenever you want, you can get popcorn
and Coke while you're watching. The programming itself shows behind-the-scenes in between acts, where they go backstage. Also, the subtitling is on the
screen. If you go to the Met, the subtitling is on the back of the chairs, in front of you, which makes it more difficult to be looking down and up the whole time.
It's every bit as good and in some cases even better than being there."
In partnership with Screenvision, Clearview Cinemas broadcasts select Mets baseball games in New York City-area theatres, including the venerable Ziegfeld,
which is about a 40-minute subway ride from the team's Citi Field. (Screenvision also brings Philadelphia Phillies games to Clearview and National Amusements
theatres in the Philadelphia market.) The $12 events, which have sold out, show the game on a 50 x 23-foot screen and include mascots and giveaways to rile up
fans and create a stadium-like atmosphere.
The price of these events, which is often less than attending a live event, factors into viewers' opinions of alternative content. Stephenson explains, "It's not so
much the price itself; it's the whole value equation. People think that they're doing something they can't do someplace else, and it's a good experience, so they
are willing to pay us more for the extra." Just as the public has shown they're willing to pay extra to see a movie in 3D, they're willing to pay more for sports and concerts.
Among content providers, as well as the studios, there has been some hesitancy to allow these broadcasts, for fear that they may cannibalize existing
entertainment offerings. Content owners may feel that showing their attractions in theatres could discourage people from shelling out full price to go to
the main event. Exhibitors like Paul Glantz, CEO of Emagine, scoff at the idea that one could replace the other. "We now have the ability to measure,
through [Nielsen] EDI and Rentrak, folks that are watching this programming in the home as well as outside the home. The premise that you'll eat away
from television market share and so forth I think is erroneous."
Years ago, Glantz licensed the rights to show World Wrestling Entertainment and pay-per-view events, but when another theatre owner tried to
secure the rights for his own theatre, "the spigot was shut off," and it was determined that the U.S. could not show such content in movie theatres.
The feeling that there is a limited amount of "pie" to share persists today, though it shows signs of changing.
Goodrich laments that live sports games, which he feels could be an "El Dorado" for exhibitors, are not more readily available. "The national baseball,
basketball, football leagues get tens of million of dollars from TV networks. The TV networks are saying, 'We're going to share? I don't think so.'
So, we're blocked."
As digital cinema and alternative content pick up steam, however, that could change, especially as movie studios seem more willing to allow
alternative content in the multiplexes. "A few years ago most of the studios were basically saying, 'Over my dead body are you putting anything
other than a movie in a movie theatre,'" Stephenson recounts, "But all these movie studios are part of big media conglomerates&hellipnow these
guys are saying, 'We create content in all sorts of different places and in all sorts of different ways, and the theatre gives us another channel to
sell our content to an audience.'"
"These are corporations that have a built-in distribution channel, and the means by which to exploit the opportunity to show product in the theatre,
and they've got a business model that already demonstrates that it's profitable. Why they haven't decided to take that opportunity and run with it is
beyond my comprehension," exclaims Glantz.
Instead, alternative content has largely grown through another distribution channel: in-theatre advertising networks, with NCM, Screenvision and
Cinedigm as the leading players in the United States. Events are downloaded or broadcast using the same digital projectors that show pre-screen
advertising. Exhibitors receive a share of the ticket sales, but at a lower percentage than most movies. Depending on the event, there's also a
potential boost in concessions per-capita.
Rave and Emagine, which both book content from Cinedigm, view these revenue streams in markedly different ways. For Emagine theatres,
alternative content is still in a "proof-of-concept" stage, and the profits from these events are considered negligible. "We're very happy to work on
lesser margins here at the outset to demonstrate the viability of alternative content," notes Glantz. "We haven't worried about the economics being
optimized yet for us as exhibitors."
Rave is more enthusiastic about the profits. "We tend to pay out a higher percentage than we would to the film companies, but there's also a higher
ticket price, so the net contribution is terrific from our point of view," enthuses Stephenson.
It also requires more legwork for the exhibitor to make the event profitable. For the 3D BCS game, Rave theatres reached out to sports booster clubs
in the area to raise attendance, and created special food and drink packages to increase concession sales. "These guys tend to have a different desire
than buying a Coke and a hot dog," Stephenson explains, "So it gives you the opportunity to sell a lot of food that really comes with a nice margin."
Both Rave and Emagine sell alcohol, which allows patrons to have a beer with their ball game, and theatre owners to reap the high margins on such drinks.
However, James Dobbin, head of sales for U.K. circuit Vue Entertainment, which shows programming from European content provider Arts Alliance Media,
notes that "each event requires an enormous amount of effort and the financial return is relatively low. Due to the increase in 3D, there is more competition
for the digital screen. For the time being, we are only pursuing those events that we are confident will do well for us."
Amidst the challenges of markets, margins and audiences, the Metropolitan Opera series has emerged as the greatest success, a case study of what works
in alternative content. This fall it will start its fourth season in over 440 U.S. theatres, with an international reach of 900 theatres in 42 countries. Among opera
fans, the Met is regarded as the
ne plus ultra, making the programming a "special" event not available, or affordable, everywhere. During each season, Fathom
broadcasts several operas, creating a serialized program. Instead of having to market each event extensively, business is generated through repeat patrons
and word of mouth.
The Metropolitan Opera is also a nonprofit whose general manager, Peter Gelb, has fiercely advocated for expanding the reach of the Met's programming.
Unlike many content providers, who are fearful of overextending their audience, the Metropolitan Opera
wants to be more accessible to the public. Showing
the opera in a movie theatre has a side benefit of unseating opera from its stuffy reputation, while still appealing to the opera's core fans. The audience also
includes a significant segment of underserved or non-regular moviegoers. Attendees tend to come from an older demographic that views movies less frequently,
or, as Westerling speculates, those that belong to the class of "upscale, sophisticated moviegoers&hellipprobably the same group that enjoys your independent,
alternative film."
Finally, Fathom has access to Metropolitan Opera's extensive database of ticket buyers, season-ticket holders and more, which has enabled them to reach
exactly the kind of people who would be most interested in attending the opera. In the college town of Ann Arbor, Michigan, for example, the Metropolitan
Opera does "phenomenally well," and for the 2009-2010 season Goodrich has added a second screen for the event, becoming one of just a few in the
country with two screens devoted to the opera.
The Metropolitan Opera, concerts, sports and other events have habituated audiences to the idea of viewing live content in theatres—to an extent.
Without a steady supply, like the seasonal string of Met operas, exhibitors suspect audience demand falters. The executives at Emagine theatres
hope that one day people will come not to catch a movie, but to catch a concert, sports or live event as a matter of course.
"I truly believe that if people get used to seeing alternative content, they'll know that when they come to our theatre there will usually be something
that's going on," Daniels observes. "The availability of more alternative content would help reinforce the image that we're attempting to burnish in the
minds of our guests." Glantz adds, "We want to consider ourselves an entertainment venue as opposed to a pure movie house."
Content owners, too, might become more willing to exhibit their content in movie theatres if they only knew about it. As Fathom has expanded, more
content owners have reached out to the company, instead of the other way around. "As it's clear that there are ready means of distribution available,
there will be more folks coming forward with content," Hall predicts.
Recent Fathom one-night-only specials have included the cast of the TV show "Mystery Science Theater 3000" aiming live barbs at a screening of the
Ed Wood sci-fi cult classic
Plan 9 from Outer Space, and former NFL coach Tony Dungy, Peyton Manning and other football stars offering their insights to sports fans.
As for alternative content today, it appears demand outstrips supply. "As we've whetted people's appetites, we get more and more requests." Stephenson
notes. "We continue to get requests, frankly, for more product than we currently can provide."
