NATO chief calls for investors to help theaters

Michael O'Leary

Courtesy of NATO

National Association of Theater Owners President Michael O'Leary kept it relatively short and sweet when he delivered his first CinemaCon speech in Las Vegas on Tuesday. But his message was clear: struggling theater circuits need help as they still deal with the lingering impact of the Covid-19 crisis and a dramatic slowdown in movies due to labor strikes last year.

“Keeping pace with the growing demands of the movie-going public is not new, but it requires capital. To our friends in finance, investing in talented people running innovative theaters in this country and around the world is a smart investment. Getting more capital into the system will benefit everyone – creators, studios, exhibition, local communities and, most importantly, film fans,” said O'Leary, who took over as NATO chief a year ago.

His speech to thousands of theater owners attending the annual convention comes as Regal Cinemas under new ownership is emerging from bankruptcy and many exhibitors are facing cash problems, including mega-circuit AMC. And a slump at the domestic box office didn't help matters. Domestic box office revenue so far this year is currently 20 percent behind 2023 — not matching pre-pandemic numbers — due to a lack of major studio titles due to production delays caused by writers and actors' strikes.

Exhibitors, Hollywood and Wall Street had hoped for a return to pre-Covid levels in 2024, but those hopes have now shifted to 2025. This year's edition of CinemaCon has been plagued by fear. Sony is pulling the plug on the show entirely (though its animation-focused arm Crunchyroll is in attendance), and there's far fewer landmarks than usual for movies surrounding Caesar's Palace. But there should be plenty more headlines as studios present their upcoming slates to exhibitors. Disney, Warner Bros. and Universal are all expected to deliver strong presentations, while Paramount's presentation will be clouded by talk of a potential sale.

O'Leary maintained an upbeat tone throughout his speech, but acknowledged the changing times.

„As we gather this week, much of what we've long believed in is open to renegotiation,” said O'Leary, who called the deal that ended the strikes historic. „But inflection points like these are moments of opportunity. The past year has shown me that the future of this industry — and indeed the state of this industry — is limitless.

Continuing, he said, “Films on the big screen will benefit everyone. More compelling movies bring more moviegoers to the theater, which in turn increases consumers' desire to come back and see what's coming next. Everyone wins. „

To that end, O'Leary assured the crowd that studios and other distributors have continued to reaffirm their commitment to theaters.

Streaming was a point of contention at CinemaCon, but now that Apple and Amazon are both offering their traditional runs in full theatrical release, that tension has eased.

„We must always support partners and market decisions that increase film production and put more films in your theaters with clear, exclusive theatrical flow and marketing support. We know that a film that begins its journey with a theatrical exclusive is very successful in every subsequent sub-platform,” said O'Leary. said. „It should attract as many movie fans as possible to people who want to see their movies, but also people who want to make money.”

NATO hosts CinemaCon, but always invites the Motion Picture Association to share the state of the art presentation. During his remarks on Tuesday, MPA President Charlie Rivkin announced a new effort to work with members of the US Congress to enact anti-judicial site legislation in the US (Rivkin has made fighting piracy a hallmark of his tenure).

„For anyone unfamiliar with the term, site blocking is a targeted, legal tactic that disrupts communication between digital pirates and their intended audience,” Rivkin said. „It allows creative industries of all kinds — film and television, music and book publishers, sports leagues and broadcasters to court, Internet service providers to block access to websites dedicated to sharing illegal, pirated content.”

Rivkin said this approach focuses only on sites with stolen content. „There are no gray areas here,” he said.

In their respective speeches, both Rivkin and O'Leary repeatedly praised the communal experience of watching a movie with others.

O'Leary also stressed the importance of having a variety of movies, not just relying on blockbusters. „We need to have a strong and vibrant market for films with small or medium budgets,” he said (the day before, he hosted a panel on the topic).

„In an increasingly divided world that increasingly places tribe over community, theater brings us together to share a common experience,” O'Leary said. “Theater encourages us to listen, think and learn. There is no other place like it. Theater is a place to admire, celebrate and fight!”