Last week, I published an article, “Re-igniting the Global Theatrical Market“, which generated a lot of response from the industry. In that article, I described the annual Fête du Cinéma, operated by the FNCF (Fédération Nationale des Cinémas Français), where every year, for a number of days, cinema-goers can go to the cinema for a reduced price. My suggestion to the industry was that, in order to re-ignite the global theatrical market, we should organise a 4-week “Global Celebration of the Cinema Experience”. This would allow cinemas to jump-start operations while distributors are getting ready to market and release their first new titles. I got some questions about how this initiative could be implemented.
Here are my thoughts:
Let’s start with some basic global box office maths. The annual global box office for 2019 was roughly $42.5B. This means that, around the world, we typically make approximately half to one billion dollars per week. That’s just ticket sales, not concessions. If we were to do a “Global Celebration” initiative, we should be targeting $2B in global ticket sales over 4 weeks, as our base. If we were to treat this Global Celebration initiative as a single blockbuster, this would come with a marketing budget. Let’s say that we allocate a global marketing budget in the region of $200M, which is then split by market.
Local marketing agencies can get involved and bid for the campaign contract in each market. The cinemas could use and repurpose creative materials for their own campaigns.
Film selection: Our industry is very product-driven. If we pick the right films, our audiences will come. We need a selection of titles that cover all tastes, genres and demographics. We would suggest that the Studios & local distributors put forward 20 titles each. The titles can vary at local level, to include local titles.
Booking: Ideally booking should be done in such a way that films get maximum exposure. We would recommend that no nearby cinemas show the same film on the same day. Governments should allow market collaboration under the current circumstances and for this specific event.
Taxation & Government help: Given that the initiative’s purpose will be to help exhibition recover, the local industry bodies should be able to negotiate a tax break with their respective governments. Governments could also contribute in other ways.
Ticketing: The tickets should be set at a low price, on a market by market basis. A further discount can be given for advanced sales that take place during the lockdown, to help the cinemas with their cashflows.
Film Rentals: In the spirit of collaboration and given that library titles will be released, we recommend single digit rental terms. We heard that some distributors were already doing this with library titles before the shutdown.
Extensive Trailering: The main benefit for the studios and indies will be the extensive trailering opportunities. This will allow our audiences to quickly become familiar with all the upcoming titles.
And now, the question you have in your mind: That’s great, but who is going to pay for all this? As an industry, we already have a model for this. It’s the VPF model we used to finance the conversion to digital projection technology. In this case the cinemas that participate to the Global Celebration, will pay a fee, up to 10% of their grosses, to the consortium of the companies that contributed to the marketing fund. This will be capped and it will not exceed the cost of the campaign in the local market.
Let’s recap here: if this works the way I described above, we should be able to have the equivalent of a $2B blockbuster, with the cinemas keeping 80% or more of the box office and with the distributors confidently preparing for the release of their upcoming slates.
For this initiative to work, it requires coordination between exhibition and distribution, quick decision-making and flawless execution. We must work really hard during this lockdown period. The time when the cinemas re-open is going to be very challenging as every single industry will be vying for customers’ attention. We know that nothing is more powerful in drawing crowds than a true blockbuster; we already have hundreds of them!
A well-organised “Global Celebration of the Cinema Experience” will be more effective than small, local, fragmented and uncoordinated campaigns. If we all work together on such initiative, we will not only accelerate the recovery of the theatrical window but also help our audiences around the world to rekindle their love for the big screen.