Four Industry Experts Debate Hollywood’s Moviegoing Crisis
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It is Tuesday, April 1st. Happy April Fool's Day. This is not a joke. We are in Las Vegas this week. Craig and I are here for CinemaCon, the big theater owner convention, watching the studio panels, seeing what's coming down the pike for movie studios. Today, I also moderated the Industry Think Tank panel. That is the annual candid discussion on the state of the motion picture industry.

Great panel. I had Eduardo Acuna, who's the CEO of Regal Cineworld Group. Peter Levinson, who's chairman of global distribution at NBC Universal Entertainment. Tom Quinn, who's the founder and CEO of Neon, a returning champion from the town. And we had Joseph Kaczynski, who's the director, filmmaker of Antimony.

F1, which is coming to theaters this summer. Great conversation. We got into a bunch of topics, the windowing issue, the Narnia movie, how to get young people into theaters, all of it. So today is the Industry Think Tank, live from CinemaCon, from The Ringer and Puck. I'm Matt Bellany, and this is The Town. So usually on these kinds of panels, we start with a softball question, get everybody used to it. We're not going to do that. No.

We're going to go right into it. And I want to go to Eduardo to start because we've heard a lot over the last day or two already. Michael's speech this morning, Tom Rothman at Sony last night talking about the Windows issue and this call to action of reinstating the 45-day window. And I'm sitting here listening to everybody talk, talk, talk. And I'm thinking, this is easy, right?

If the big chains just said we will not play your movie if you do not give it a meaningful theatrical release, I'm not talking collusion. I'm not talking antitrust. I'm saying independently of your own mind, you say to these...

these studios, we got through COVID. You did what you had to do. We did what we had to do. We are now beyond that. We need to go back to a 45-day window. And if you do not agree, that's totally fine. Our theaters are not available to you. Why is that not happening? Okay, first of all...

Feel free to just punch right away. Right away. Rip the bandaid off. Why is that not happening? I think because the way we do business here, I want to say something that I heard yesterday and I truly believe. I think distribution and exhibition are cooperating more than ever. We're talking to each other more than ever. We have daily discussions and we're just trying to do what's best for the industry.

Pete and I, my good friend Pete and I, talk about this all the time and we disagree often. My best interest, Exhibition's best interest, is for Universal and all the studios to do great. The more money they make, the more films they make, the better we are. On the other hand, we also have a very, very vested interest in movies doing great and we believe that a longer window will make movies be better.

I think we just finally got to a place in an industry where we can have some momentum around this 45-day window. And I think that's the right thing to do. Are we at a point where we would... I don't think I've ever said in my life to any studio, any distribution executive, I will not play your movie. We're always very cooperative and we try to play every single movie. I hope it doesn't get to that, but I do think there's momentum for a 45-day window. There's all this information...

that's out there that says, that suggests that a longer window would make this industry healthier? It's just that I, maybe I'm cynical, I operate from the position that nobody does anything unless they absolutely have to. And,

they have a financial interest to do so. And what we've seen post COVID is that the financial interest for the studios is to get much more nuanced on their windows and to utilize the theatrical circuits when it benefits them and to utilize premium on video on demand and other models when it doesn't. How do you better insert the theaters into that equation?

I mean my big preference again would be that this comes out of discussions and agreements and again everybody has some data on it. Michael O'Leary showed this morning how the markets with longer windows perform better and have recovered better after COVID. That certainly happens in our in our theaters. We have one very big issue which is piracy. The second a movie goes out on pivot

piracy just explodes. And even though we're a very US-centric industry, worldwide it's a huge problem. And we're losing a lot of box office. So our best interest would be to convince studios that this longer window is beneficial for everybody. Now, around the world, there are many markets where the understanding is, even before we book the film, you have to tell me if it doesn't have a 45-day window, because we may not play it.

I can tell you I worked in Latin America, and that was certainly the case over there. Several parts of Europe, that's the case. Should we get that case in the U.S.? Hopefully by discussions and by common agreement, but maybe we have to get there, too. Peter, obviously you're the next person to go to on this subject. I had no idea we were talking about Windows today. Yeah, but...

But it does, I mean, it's a compelling argument. And I know whenever I raise this with Universal and other studios, they pull out a phone book worth of stats that show that PIVA does not hurt theatrical grosses.

I frankly don't believe that, and I don't know that you can be certain of that. Can you be certain that PIVOD does not hurt theatrical grosses? When these movies are going to PIVOD, two, three weeks, three, four weeks after release? Well, okay, Matt, let me start with saying that we spend a lot of time thinking strategically about our windowing.

And what we do, we focus on sort of two key areas. One is we are a theatrical first company, as Eduardo knows. Theatrical is the foundation, it's the underpinning of every single thing we do. It's where the brand is created and it is the proxy for value of all of the ancillary windows. So we have no interest in hurting theatrical. I think it's important to state that. The second thing is that

that we prioritize is we need to be where the consumer is and the consumer is not going to go to see every single movie in the theater. Now that said,

We have never deviated as a company from sequential windowing. We have always done theatrical to home entertainment to television. We think there's real value in that. And I think about each film as an individual corporation, right? And as we, as a life cycle, and as we go along that life cycle, the value proposition changes with the business model. And we think that is really important. So we stick to that.

Just to finish the thought, what we've done over the last couple of years is we really fine-tuned that optimization on the windowing.

particularly, which has made us more profitable, particularly on the small to mid-range films, which are largely the ones that have had a problem post-pandemic. That ability to be more profitable has allowed us to make more movies. And there's no question that we have by far the biggest slate in the industry. And we're only able to do that because of the improved economics. That is a great point. And I think it definitely, I'm glad you said it. Having said that,

Don't you worry that you are training moviegoers to wait because we have not seen, I mean, they showed the stat this morning. The opening weekend is down slightly second and third weekends are down off a cliff. And I saw it with my own friends and family. I, my wife and I saw black bag in the theater opening weekend. Great film. We loved it. We started telling our friends about it and they're like, Oh wait, but that's going to be on streaming soon. Right. And they're right. It's going to go to Peacock in three weeks.

Okay, so it's a really important point. We as an industry, maybe not me, but we as an industry use the word streaming incorrectly. Streaming is a means of transmission, moving bits from A to B. What you really want to argue for is the business model. And where we may be slightly more aggressive is on the transactional side. So you're saying five, right? For a very high-priced, very high-priced

transaction to watch one particular movie. On the other end of the spectrum is the subscription side of it, which is the Peacock or Netflix, which is essentially an all-you-can-eat buffet of

worth hundreds of thousands of movies and television episodes for $15. And we think that's substantially more disruptive. And as I said, we spend a lot of time strategically on these windows. As it relates to that more disruptive window, we tend to be more on the conservative side. You'll see all of our big films not go to subscription until at least 120 days. So Black Bag is in that category? Black Bag is a smaller movie. Black Bag would go to at 90 days, but in

In time, it probably will be our entire, the large portion of the universal slate will all be 120 days. Okay. So we're moving in that direction for sure.

Tom, I want you to weigh in here too, because obviously as a mid to lower budget distributor, you are in the category of films that have been hurt the most in the theatrical space post-COVID. You are also a big proponent of putting your movies, most of them, in theaters. How long is that sustainable? How long do you see you as a primarily theater-first distributor?

Wow, that's a very existential question. So, you know, we will always believe in cinema first. That's what the company's built on. The directors that we work with believe in that. Absolutely. Let's clap for that. Thank you.

You know, as Peter said, it builds downstream value. It's the greatest shelf space for entertainment. But what I would say is, you know, I also used to work for Magnolia Pictures, which was there in the early days of collapsing the theatrical window. And, you know, what I would say is that it's the transactional value of what these films offer these companies is something that we ultimately shared with exhibitions.

And I would argue instead of, you know, which I don't understand why Regal or AMC or Cinemark can't get together and say, you know, demand 45 days. What I would say is simply change the rental of those companies that shorten their theatrical window. I think that's the easiest way to handle it. Shorten, I mean, change the amount that you pay based on how long a window you give.

It's a good idea. Has been discussed many times. Has never happened. Eduardo, why doesn't that happen? That would eliminate all the argument. You wouldn't have to hold fast. You do what you think is most valuable for your movie. And also the individual exhibitor can do what's most valuable for them. So it's not collusion in any way. Why doesn't that happen? It has happened. We have argued for breaks when the window is shorter and

we've had it sometimes, but I would actually be opposed to that, even the discount, because I'm worried with what you're saying, that we're training our customers to know that the movie's out at home very soon. And we did a survey, the 12 largest exhibitors in the world opened up our databases and sent a survey and asked people their behavior, especially with streaming and pivot and all those things. And one in three believe that a movie is

is free at home in less than 30 days. And as opposed to us, a normal customer doesn't know the difference between pivot, transactional, subscription, nothing.

They think it's going to be free in less than a month. Well, why wouldn't they think that? They're being marketed to by the studios. They're telling them it's going there soon, that you go to a ticketing website on Fandango or whatever, and often you can see buy it at home right next to buy tickets for theaters. Why wouldn't they think that it's going there? And let me give you a piece of information because I fully agree with that. And let me give you another piece of information. Two

Two years before the pandemic, when the window was 90 days, the last time it was 90 days, the median opening of a film, median opening of a wide release, $17.5 million for the weekend. That's the median. Last year, that was $11.5 million. In that same period of time, the 23% of wide releases opened to less than $10 million. That number right now is 41%.

So my concern is even if we charge less, or even if they charge us less and we pay less to have a shorter window, are we then training our customers to not go to the theaters because it's going to be at home very soon? And paying that less, I guess my point is let's not jeopardize the long-term health of the industry for a short-term gain. All right, I'm going to come back to Peter on that, but I want to get the filmmaker's perspective here.

Joe, obviously you're a filmmaker with choices and you make the kind of movies that people like to see in big theaters. What is your perspective when going into a project, when you're perhaps selling a project to various suitors? How do you come into that? And what part of the process is the theater component? Is it everything? Is it part? Can you be, is there a price where you'd be willing to sacrifice? What's important to you?

I don't think there's any replacement for the theatrical experience. It's the formative memories I have as a kid seeing, you know, Raiders of the Lost Ark or Back to the Future. Like, I remember those experiences because I saw it on the big screen with a big group of people. So for me on, you know, movies like Top Gun Maverick, F1, and the movie we just sold to Apple, theatrical is a requirement for

And so, you know, it's my job to make a movie that the audience knows they have to see on the big screen because I can't control, you know, the stuff you guys are talking about. But what I can do is I can try to make a film that when the audience sees the materials for it says, I got to see that on the biggest screen possible. How close was Top Gun Maverick to going to Paramount Plus during the pandemic?

You know, I wasn't a part of those discussions. Oh, yes, you were. Come on. They're not going to loop you in. That was, you know, I had Jerry Bruckheimer and Tom Cruise, you know, who are, you know, both legends and were able to take care of that for me. If it was any other star at any other studio, he's so important to Paramount, I bet it would have gone to Paramount+.

Yeah, I mean, we have to remember what an uncertain time that was, you know, like, we just didn't know when theaters are going to open. I mean, our release date for Top Gun changed, you know, after COVID hit, I think we had three different release dates, we kept kicking it further and further down. So...

Luckily, I think for that movie, it ended up being the right time, you know, the right movie at the right time in May 22. But that was two years that we held on to that after finishing it. And that was hard to do. There's several films that of that size of picture that went earlier and did not benefit. I mean, yours is a great movie, but they suffered.

You had a thought there, Peter, following up on what Eduardo said. Well, a couple things. First of all, I agree with Joe completely that we should be thinking theatrical first and 100% universal. That's our position. There's a couple of things I just want to add. One is that notwithstanding Eduardo's sort of data points,

If you look at the decay curves of films that maybe go a little bit early in the home digitally, if you look at those films versus films that maybe go a little bit later, there is no difference in the decay curves. And we study this quite a bit. If you take a look, and you can do your own homework, look at Frozen 2 and look at Wicked.

They're almost the same box office. They were released the same time of the year. One had a slightly earlier pivot window. Their decay curve looks identical. So I'm not sure that the data that Eduardo was saying really tells the whole story. But that said, to the point about training, I think this is a really important question.

We don't see any evidence of that. We continue to look at this windowing a lot, but what I would say to all of us as an organization, as a community, is that there's a lot more competition for discretionary time today than there was a handful of years ago.

And, you know, people are playing games. They're watching a video on YouTube or TikTok. They are watching streaming. These movies on streaming, not just the ones that we license, but the originals and the television series look every bit as much as a feature film on these platforms now. And so I'm certainly not saying anybody is naive, but to think that it's just the windowing issue, I think as an industry, we need to be innovative and we need to be flexible and

to meet the audience where they are. I mean, it is an interesting point because, uh,

I hate to use the N-word here, but Netflix, Ted Sarandos, he was at a conference just this last week, and he said, basically, every live experience, every in-person experience has not only come back after COVID, but gone through the roof. Live music, sports, all these things that you do outside the home have gone nuts. But then he said, except for movies and theaters.

Down 10% from last year, down 40% from 2019. And his quote is, you got to look at that and say, what is the consumer trying to tell you? So from your perspective, let's go to Tom for this. What is the consumer trying to tell us?

Well, there's so much analysis going on that it's specific to box office. And I would say, one, looking at the quality of the movies. I mean, we live in a streamer economy where movies are being made that don't have to have any retention, right? Just box value. And I think a large slew of... Tile value, I think they call it now. That's tile value. And, you know...

I would also say, looking at box office in 2023, just under 600 movies were released. The highest grossing box office year was 2018, which was 11.8 billion, over 900 movies. And so the first film average in 2023, the total box office was only 25% less than

than 2018, but 40% less movies. And I would say more movies is not better. I think we need to focus on development. I think we need to move upstream. And I do think windows matter. You know, Black Bag is a fantastic movie. Peter, you know, Peter, you've done a great job. Steven Soderbergh killed it. My wife and I had an incredible night out. That movie should stay in theaters for 88 days, just like Maverick, in my opinion.

But that movie cost $50 million and will not make back its budget in domestic box office. So how is Universal supposed to make back its money in order to make more of those movies? So the word of mouth... I would argue that the word of mouth on that film is fantastic, and you're teaching the older audience that they don't need to go see it in the theater, right? And...

And I don't know what the upside is of that film at a 20 plus dollar VOD unit. I think that's overpricing some VOD offerings. So I think it's the whole approach to the post-pandemic, P-VOD, too high price point on VOD, too short a theatrical window. And it's a one size fits all that Netflix falls into the same trap, right? I think every movie is nuanced. Every movie is different. And I wish there was more discussion between the VOD providers, Comcasts,

the distributor and exhibition to truly figure out a more nuanced window. And I think everybody is playing this game. It's every man for themselves. I don't think there's enough coordination. So you had, as you've noted, and you came on the town to talk about, you had the Oscar Best Picture winner this year, Nora. And when I asked you about the box office, that film grossed 20 million domestic. You said that the battleground nowadays for most awards movies is Pivott.

not box office. And you put that movie out early in the season. And by the time it was heating up an award season, it was on Peabody and people could watch it. You said you were going to make eight figures on Peabody there is the award season box office over.

for most movies. Is this now a PIVOD race? So, so, Anora is a $6 million movie shot on the streets of New York and Vegas. And, you know, it grossed just over $15 million. When it won, it grossed another $5 million. That's the largest percentage increase since Parasite. It's the largest, it's bigger than Oppenheimer, right? So, there is a real, sorry. Percentage-wise, let's be clear. In total box office.

Well, okay. But Oppenheimer came out in August. I understand. Everything, everywhere, all at once, all these other movies. It came out in May, but okay. You promised to acknowledge that Enor is our movie as well, remember? They do have international. They own every movie, including The Brutalist. Exactly. And what was that movie where the Pope does something? The Conclave. Conclave, yes. Sorry.

Which, by the way, did get over $100 million worldwide. So that's the opposite there. You can still generate box office from an awards movie. It's just most of them do not. So Enora was in theater for approximately 70 days, right? And that would be a pretty extensive window. We were pushing for 90, but yes, we wanted to launch VOD around nomination, which is exactly what we did for...

So it was on sort of a higher price point for Christmas and then lower price point, regular price point come nomination. And yes, all of that's part of an Academy strategy. But, you know, I think the idea of putting that movie out for 30 days, 17 days, 45 days, I don't think it would have been the hit and or the best picture winner that it became. But Conclave, what was the window on Conclave? I think it was after the third weekend. Yeah. Yeah. Look, I...

We do not have a one-size-fits-all strategy. I mean, we have some movies that go after the third weekend, some movies that go after maybe even the sixth or seventh weekend into the transactional side. We don't have one price point. We have multiple price points, and

And as I said, one of the things that we've been able to do over the last couple of years is really sort of take control of this optimization, finding the right window at the right price point, at the right business model as we move along that life cycle to try to make ourselves more profitable. And again, I just want to reiterate, the more profitable these companies are, the more movies that they're going to make and the more films that fill the theaters, the better position we're all going to be in.

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Apple is an interesting one. And I wanted to ask Joe about Apple because obviously you made your movie F1 for Apple and you're making your next movie there. What have you been able to glean from your conversations there about their aspirations for releasing movies, not just yours, but all their movies in theaters? Because they pulled back.

Yeah, I mean, that was, you know, one of the reasons we went with Apple for F1 is because of their commitment to the theatrical release of the film. And my experience there has been phenomenal all the way through. It's been an amazing experience. And, you know, we're partnering with Warner Brothers for the distribution of F1. And your next movie? Is also with Apple, but we don't have a distributor for that one. Oh, you don't? No. So I think Apple... We're free. We'd love to work with you. Yeah.

Let's talk after. So, yeah. So I, you know, I don't, I don't know in terms of Apple's overall strategy, other than that, they've been very supportive of making sure F1 is a theatrical giant, theatrical lease all around the world. But when you see them, like what happened with wolves, which was the John Watts movie, Brad Pitt, and they committed to theaters, then pulled back. Does that worry you?

Not on F1, no. Not on F1, okay. No, this is a movie we made for the big screen and yeah, they're 100% committed. But some have described F1 as a make it or break it moment for Apple in theaters. Like if F1 works as it's supposed to and it seems like it will, they are going to continue to make these bets. If it doesn't, you're going to see Apple pull back and not commit to theaters.

No pressure. Yeah, no, I mean, we made it, you know, again, this is a movie that we made to not only appeal to racing fans, but to everyone in the same way you don't need to be an expert on naval aviation to enjoy Top Gun.

And I've been able to show it to a couple audiences and so far the feedback's been really great. So we're very happy. - And you have the theatrical commitment for your next film at Apple as well? - Yes, absolutely. - Similar. Eduardo, I wanted to ask you about this Narnia situation because we saw some news where Greta Gerwig got IMAX and Netflix to commit to a four week window, but a two week commitment in theaters for IMAX only.

There's been some reporting at Puck and elsewhere about some of the other theater chains not being so happy about that and not having committed to playing that movie. Theaters generally will not play Netflix movies because of their commitment to streaming first. Where do you stand on that? First, don't pull any punches. Where do I stand on that? I mean, first of all, I think Greer is a fantastic talent.

And I will say that this movie doesn't come out for 18 months. We don't even know the economics or anything. We don't know the conditions. We don't know anything about it. I will tell you a couple of facts. First fact is I'm a very strong proponent of 45-day window. And giving a 30-day window, not even PVOT, to subscription... To the largest subscription service in the U.S. It is not in the best interest of exhibition to do that.

Secondly, I would say, and this is another fact, there are two movies on that date. You have the new Hunger Games by Lionsgate, and that book has sold three times more books than Mockingjay. And they have a movie on that date that had an IMAX commitment. Disney has a movie date for that date. I assume it's going to have IMAX commitment.

And who should we support? The studios who give us all these movies with all these box office with very long windows. I mean, Disney has the longest window. Or the studio who will maybe give us one movie ever and have a very short window to subscription. So you won't play the Narnia movie in your regal IMAX theaters? It's 18 months down the road.

None of these three films have been filmed, so we don't know what's going to happen. Days could change. I truly hope that Greta can convince Netflix to give it a longer window and then we could play it.

but it would not be in our best interest to play it. Okay, so unless they extend that window, which they have said that they're not going to do. And probably change the date because... Greta's very charming. She can do a charm offensive here. And she's very powerful. I mean, she's the first director in history to have her first three films nominated for an Oscar. I mean, Christopher Nolan can pull it off. How dare you? Okay, so...

Separate topic. I want to ask Peter about the decision-making that goes into which films get which windows. And you mentioned that it's a conversation, it's data-driven, it's very strategic, but take us into a little bit of the, of the decision-making process on these films and which ones get the 17 day, which one get the longer, which one get the full Nolan treatment. Sure. Yeah.

I don't know that there's a black box here. We look at each film individually. We have a very diverse slate at our company, as you know, and we make films of all sort of different shapes and sizes. We look at the box office potential. We look at the home entertainment potential. Certain films like

you know, Jurassic or, or our big animated films tend to be in that much later to transaction transactional. And then even further, much later to, to, um, to streaming to a subscription service. I just did it also. Yes. Um, we all do it. The, the, sometimes we may feel like a film doesn't open up and, um,

You know, we don't if we put if we put a film like like Black Bag in theaters and it and it and it doesn't reach the potential, we don't take it out of the theater. It stays in the theater. We then augment that theatrical experience with this digital release. And, you know, ironically, what we see very frequently is when we bring it into the market digitally, we see the theatrical hold improve.

which may sound counterintuitive. I've heard that before. I don't understand it. I can cite you numerous examples. Why is that? Well, it may be a function of two things. One is there's not as big of an overlap as you might think, that these are, in fact, slightly different audiences. And the second thing is that there is a whole other round of marketing. And if you're really targeting two different audiences with that marketing...

the people who were maybe more inclined to go to the theater, see that marketing and then they go. And we have a lot of examples of where that's happened. That is interesting. You on the last Jurassic, you did that. You put it on transactional a little earlier than I think most would have expected when it was in theater. Is that correct? I don't,

Don't quote me on this because I don't remember exactly, but I would assume that was certainly after the fifth weekend. My point was that it can happen even on the biggest movies. It can. Not on Jurassic. I think we had the Jurassic window planned. There wasn't a pivot there. You look at the performance that we did on Wicked, and that was six weekends.

Right? So we really, again, as I said, I think we really fine-tuned this optimization to try to look at each film individually to find that right date. Are you planning to do the same thing with Wicked on New Year's Eve for Wicked 2? It's a bit away, but I'd like to see us do that if we can. I think that was a very, very successful decision. There were a lot of people that stay home on New Year's, and as I think you know, I've heard your report on it, we did an enormous amount of business. Well, you put out a press release, but... There's that. What is...

Can you share with us the ultimate PVOD number for Wicked, what you guys made on PVOD? I think it's fair to say it's the biggest PVOD title we've ever had. So let's call it somewhere in the neighborhood of $100 million, which is our share. So if you just round that up by two, that's the equivalent of $200 million of box office.

Um, and again, well, it's equivalent to you, not to the theater. I understand. I understand. I understand. I'm just saying that, that, that enables us to have a big slate when you, when you can have that kind of success, you know, we don't pocket that money. We put that money right back into the production slate. Um,

Joe, I had a question for you about gripes. We often hear what the studios gripe about the theaters, you know, with commercials and pricing and quality, all the things that you always are. What about the filmmakers? If I asked you what gripes you have about exhibition, what do filmmakers talk about?

In the clubhouse of the DGA, what are people, where they're smoking cigars. I have this image of you and like Chris Nolan and Spielberg sitting around with like your whiskey and cigars talking about theaters. You know, I think it's the, just hitting the reference quality of the film, you know, in terms of the picture and the sound, you know, now that I'm testing F1, we go into theaters and set them up for the day. And almost every time we find that a couple of speakers are out,

The picture's not where it should be. Sometimes things aren't even working that should be working. I won't name names. But just keeping the theaters at the standard that they should be because that's why we want people to go to the theater because it's better than what they experience at home. And with a proper setup, and it doesn't have to be Atmos and Laser, but just a proper 5.1 setup,

set up, it's going to blow away anything you can have in your house. So I think just that minimum, you know, there used to be this like THX standard, you know, back in the nineties, which I loved, you know, knowing that the theater had been set. And I think that's why IMAX is so popular with big films, because that is a theater chain that prides itself on always having the fader at seven and, you know, the picture is set properly. Um, so, you know, that's certainly one thing. Um,

that I think all filmmakers would love to see as a standard across all theaters. And how about the studio perspective, Tom? Biggest gripes with theaters. Well, the most valuable real estate that this industry has is trailer play. That's where we cross-pollinate success. When Universal has a big hit, I get to enjoy that when and if I get trailer play. But I, as an independent, don't always get trailer play.

I have to go buy an auction off that trailer play with every other studio. And we play a big game, but it's very expensive. And I would say that that is a self-fulfilling outcome. If only the big players get access to trailer play and it's not curated to, to possibly put in one or two independents for that first opening weekend. If you do not cross pollinate there, you're only serving the big gun movies. And I think that, you know, uh,

an exhibition chain like the Alamo Drafthouse curates. They'll put a small movie in front of a big family film or a big studio film, and they make more money and they sell more alcohol because it's a food and beverage concept on their independent movies. And so I would say that there's something to us eliminating some of the short-term gain by selling that trailer play and allowing there to be more curation. The other thing I would say is

a lot of big box theater chains are excellent at thinking nationally and i would say that we need to work together to focus more on a local communal ground game so that audiences feel a kinship to their theater not the movies maybe some of that 2.2 billion dollars that we were told theaters are investing can be that what are you spending the 2.2 billion dollars on

I mean, first of all, I fully agree. I completely agree. I do not feel attacked, and I think you're right on, and we need to improve the experience without a doubt. The $2.2 billion are going to improve our assets. Yeah, if you haven't seen, there was an announcement that the theater chains are going to spend $2.2 billion to upgrade theaters and add other amenities. Is this about making the experience better, or is it about adding zip lines to the lobby?

Every exhibitor has their choices, right? I will tell you what Regal is doing. No disrespect to Ziplines. I actually think they should have that. I mean, money, unfortunately, is limited. And we will invest in anything that gives a good return. Where we see the biggest returns are better seats.

laser projectors, because you have to have the perfect presentation, good sound. And I also hear you, Tom, about the trailers and about giving a good experience because it not only stops there. We have to be a customer-centric industry. And we have to make sure that we're giving a good experience to our customers that are

execution is excellent, that our projection is perfect, that our presentation is fantastic, that the city is comfortable, that we good customer service. So those are the things we're working on, the 2.2 billion. In the case of Regal, the big chunk that's part of us is going to improve our current assets.

HVAC units, projectors, seats, etc. And if we find something that builds a better mousetrap, we'll do it too. Where do you stand on free-for-all theaters? Phones, talking, all of it? Me personally, not a big fan. I actually go on the other side where I think, I mean, we do play that commercial at the beginning saying, please turn off your phone.

And I think we actually should police it even more. That's my personal opinion. You do? Oh, yeah. Not this theater is designated for you to snap your friends throughout the movie. I've heard that we should probably bring back younger audiences by having texting auditoriums and that we should sell weed in our theaters and we should do all these other things. And...

Certain movies only. Listen, I'm not saying we're never going to test it. I mean, we should test everything. Yeah. I'm not. Well, it all gets back to meeting the customer where they are, right? Because you've seen the same studies I have. There was a Deloitte study last week about Gen Z and the

kinds of stars and content that's meaningful to them. And more and more, this is not news, more and more, the creators and YouTubers and digital stars are the stars of today. It's not who's on the marquee at the movie theater. And if you want to bring in that audience, you sort of have to meet them where they are and say, listen, if you want to be snapping your friends during a movie, maybe we have an option for that. We have one show out of...

100 and maybe we try it. Maybe we test it. Again, the way we stand or the way my own personal opinion is, I saw that study and it was very weird because in our case, the survey I mentioned, these GNCs actually going more to the theater and they're going more than they went six months ago. So our survey actually showed the exact opposite on the one hand. And I do think that movies...

provide escape from their digital life. There's, Michael Moses mentioned about the third space in our meeting the other day and how we need to make the theaters the third space.

People do actually eventually want to be away from their phones. Meaning not digital, not home, but you're not work, not home, the third space. The mall used to be the third space. Right. And we kind of lost that. And I think theaters, if we provide a good experience, could be that third space. But also, theaters will give you the best experience. And somehow, a theater kind of...

sequesters you from the outside world because we turn off the lights. We're going to police the hell out of texting. And you know that when you're there, you concentrate on that thing. And if you degrade that with allowing texting and all the other stuff, then it just becomes no different than sitting on your couch. Right. How do you feel about that? Do you, as a filmmaker, it is, is the theater a church that you should not, you know, uh,

bring all that stuff into, or do you want to be more accessible? Well, I like, the reason I like that idea is all the people that want to text can go and go to a different screening than the one I'm going to go to. So that's, you know, that's, that's great. I think, you know, having a teenager in my house, you know, you see that their habits are different and they're bombarded with so much more information than we were

at their age. But I truly believe that if we tell great stories and make movies that are worthy of being shown on the big screen, they're going to show up. Yeah, it's just a challenge. I texted a very prominent media analyst that I was doing this panel. I said, what should I talk about? He just responded, LOL, good luck. Because...

The thinking is that we can dance around these issues all day long, but at the end of the day, the theaters are under attack from so many different places that it's not going to get back to what it was pre-COVID. And you must have your own investors and analysts saying that to you all the time. How do you respond? Yeah. I think we just need more movies, more variety. You think more movies is the answer? Well, again...

Number of movies is down 25%. Box office is down 28%. It's almost a perfect correlation. We need more variety. I think that's the key, variety. Not more movies, more variety.

Well, let's have both. Please, how about better? Here's the thing, 14,000 movies get submitted to Sundance every year, 100 or so get programmed, only two or three big buys. More movies isn't going to increase the quality, necessarily. We hear demands for... There's pent-up demand for comedies, for romance, so again, I would say...

More movies and more variety. More wide releases is really what you're talking about. In the last couple of years, you've lost an entire studio with Fox going into Disney, and some of the other remaining studios are in a different place than maybe they were three or four years ago. Hopefully all that comes back.

the addition of Amazon sort of increasing its production and some other things happening. I think that's what he's talking about. I don't think he's talking about the Sundance slate. Well, also one genre that seems to be everywhere is horror. Is there too much horror in the marketplace?

We see, everyone says no, but we've seen decreasing returns over the last six, eight months. Last weekend, we had two horror movies open opposite each other. Neither got above 10 million, I don't believe. Like, is there, are the studios leaning into that too much? Good horror. Okay, but are the studios leaning on that because it's considered one of the few remaining genres that is theatrical?

I think, you know, action films, sci-fi films, the best romantic comedy we've proven can be theatrical. You know, a little movie known, Sisu, right? Very small foreign language film. Incredible action film. Incredible. I haven't seen, we used to see those movies all the time. 20 years ago, made from all over the world. We very rarely see that kind of movie now. And you know what? Seeing Lionsgate's presentation this morning, I was like,

seeing John Wick back. I mean, yes, I do think there's room for multiple genres. John Wick is a franchise. Most of those movies that Lionsgate showed and no disrespect to them, but a lot of them seemed like they're going to struggle to be theatrical. But I think there's room for other action films. And there are certain genres that have been overlooked and underserved. And you know what?

also being made at a certain budget that you can scale under 35. I do think there's a mid-level film that's not a programmer, that's authentic, that's character-driven, that's auteur-driven, that is missing from the marketplace. And the reason being is there's not enough development in this industry. We're moving too fast, making too movies to serve the box value. And I think that's a real thing we need to consider.

I would say we also need more marketing, more awareness. And that's not only, this is not me putting it on studios or distribution. Well, they do pay for the marketing and distribution. Well, we should help a lot. And we market a lot. Are you volunteering? Not to pay. I mean, to market, yeah. To give them money? No.

No, but I am volunteering to do something better. And again, I started this by saying there is more cooperation between distribution and exhibition than there has ever been. We have databases. We have information. We are able to better market to customers. And we need more awareness. And I think both of us should do it to get more. I think, so again, more movies, more marketing, longer window, and better theaters. Those are the four things that I think we need to get back to where we were. And too much horror is not a problem. You guys release a lot.

You're looking at me? Yeah, I mean, it's part of the DNA of our company. I mean, we're fortunate enough to work with some of the best horror filmmakers in the world, with Jason Blum and James Wan and Jordan Peele, Robert Eggers, Nosferatu. I mean, I think if you make the right kind of films, I think you can do really well. We've got three big horror franchises this year that

that we're really excited about. And then we continue to mix in an original or a couple of originals every year. And you know, you're not going to have franchises if you don't have originals. And so we continue to feed that pipeline and we've had a lot of success with it, as you know, and so have you.

You had a huge title, right? Huge title. But, you know, Terrifier 3, 54 million domestically, another, what, 35 internationally. Unrated, 2,700 screens. You know, I have not seen that before. Minimal marketing budget. I think people want something different. They want movies to go farther. All right, last question. Since COVID, we are down from 41,000 theaters to about 35,000. Okay.

Where does that end? Where is the number of screens going to decline to, and what is the new sweet spot, in your opinion? Yeah. I think there's a continued renewal of theaters. I mean, in the case of Regal, Regal went through bankruptcy, and we're responsible for many of those screens that were lost. Now, those were economically non-viable, so it's not terrible that those screens went away.

Could that continue happening in a small scale? I do think so. I don't think it's going to be radically a huge number of screens that are going to go away. I don't think so. I think there is just some leases come up. If it makes sense, you renew it. If not, you don't. But I don't see a massive decline in screens unless something horrible happens. And what are you guys projecting at Universal?

I wouldn't know. Look, I think not to be controversial, but obviously we would rather have fewer, more successful theaters. I think in my neighborhood in California, there's six or seven theaters within a five-mile radius that can't be healthy. And I'm not suggesting that there should be consolidation because I don't have insight into that kind of data, but fewer successful theaters has to be a good thing for the business.

Can someone please buy the Cinerama Dome? Seriously, what is going on there? Can we all not get together and demand that that theater opens? I mean, it's such a huge loss for all of Los Angeles and the industry, especially for my movies, definitively. Everybody has tried. I know, they will sell it more than once. Yeah, everybody would fight for that. Why won't they sell it? I don't know. You have to ask them. I think they still want to...

do something there at some point. It was perfectly fine when it closed at the pandemic to simply open it up. You know, any given movie that we would release, we could gross $90,000 a weekend there. And I, you know, all of that sort of supply has moved to other theaters, moved to Burbank AMC, but I feel like there's a desert that exists in Hollywood and, and it needs to be filled, including the West side. And,

And finally, Joe, would you prefer your movies be released on 4,000 regular theaters or half the amount but all PLFs? You know, I love the IMAX experience. I love the PLF experience. Again, I think it's about giving people something different than they can get at home. And F1 is a movie we made for the biggest, loudest theater near you. So yeah, I guess I'd go PLF, selfishly. Preferably a mix. So people, if they couldn't get there, you would have that. Yeah, absolutely.

Okay, that wraps up our special edition of The Town. Thank you to the four panelists who sat down with me today. Thank you to our producer, Craig Horvath, our editor, Jesse Lopez. And I want to thank you. Craig and I are going to lose some money at the craps table. We will see you later this week.