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NATO CEO Reiterates Support for Theatrical Release Window

13 Apr, 2016 By: Erik Gruenwedel

NATO CEO John Fithian at CinemaCon

Facing an evolving on-demand consumer and distributors willing to upend the status quo, John Fithian, CEO of the National Association of Theatre Owners, declared the embattled theatrical release window more important than ever. 

In an April 13 keynote at CinamaCon in Las Vegas, Fithian reiterated his trade group’s support for an exclusive 90-day window under pressure from day-and-date box office/streaming movie releases from Netflix, Paramount Pictures’ transactional video-on-demand beta test, and, more recently, Screening Room, a $50 premium VOD service from Napster co-founder Sean Parker that would offer new releases day-and-date with theatrical and split VOD revenue with theater owners and studios.

While characterizing Screening Room as a “distraction,” Fithian said theatrical release windows drive success at the box office and in ancillary movie markets.

“Exclusive theatrical windows make new movies into events. Success there establishes brand value and bolsters revenue in downstream markets [including home entertainment],” Fithian said.

He admitted that “more-sophisticated window modeling” may be needed going forward to ensure “growing success of a modern movie industry.” However, Fithian stressed that new distribution models must be developed by distributors and exhibitors in company-to-company discussions — and not by outside third-parties.

“Working together on smarter windows can grow the pie for everyone,” he said. 

Indeed, the domestic box office was up 7.5% to $11.1 billion in 2015 — a growth trajectory that has continued this year, with the box office up 12.7% in the first quarter (ended March 31). Notably, despite scuttlebutt younger audiences are shunning the box office in favor of streaming and video games, Fithian said moviegoers aged 12-17 generated 16% of domestic ticket sales.

Internationally, NATO said ticket sales have “soared,” including up 51.2% in China (soon the world’s largest theatrical market); 14.7% in Mexico; 14.3% in Germany; 7.8% in Spain; and 7.4% in Brazil.

“The global exhibition haul of $38.3 billion would have likely exceeded $40 billion had it not been for weak currencies in key markets,” Fithian said.

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