Welcome to CinemaCon 2021

By John Fithian—President & CEO, NATO

In the last week of February and the first week of March 2020, we watched the news as an epidemic moved from Asia to Europe and became a pandemic. We planned new protocols for CinemaCon 2020 based on the science at the time, by ordering thousands of hand sanitizer bottles and booking more cleaning crews (no one was really talking about masks back then). MGM/UAR and Sony then announced the first two delays of theatrical release dates, for No Time to Die and for Peter Rabbit 2: The Runaway. South by Southwest and the NAB show both canceled. So, on March 10, the NATO Executive Board made the difficult but appropriate decision to cancel CinemaCon 2020.

At the time, I thought that canceling CinemaCon would be the most difficult challenge of the year and that if domestic movie theaters had to close, it would be just for a few months and then we would be up and running again. How incredibly naive that now seems. The exhibition industry today is still enduring the longest existential crisis of its history, and it will take a year or more from now to fully recover.

Sixteen long months after we canceled CinemaCon 2020, we are so very excited to welcome back to CinemaCon those of you who are able to attend. And for those of you who couldn’t make it back to Vegas in 2021, we look forward to celebrating with you at CinemaCon 2022 next April.

As I write this, 49 of 50 states in the U.S. have allowed movie theaters to open at 100 percent capacity, 80 percent of our patrons feel comfortable returning to the cinema now, half of the federal grants for our midsize and smaller domestic exhibitors have been awarded, many different state grant and tax relief programs have been offered to exhibitors of all sizes, movies are finally sticking to their release dates, and more and more of those movies have exclusive theatrical windows.

Internationally, progress is also being made, though some territories are a few months behind the U.S., while others remain very challenged. In the important European sector, most major cinema markets have begun to reopen (for the second time during the pandemic!) and business is coming back. Asia has some strong spots and some still-challenged spots. Australian business has been decent, but recent outbreaks have caused some closures once again. Latin America remains a mixed territory, with some markets recovering and others still completely down. But between the open domestic and international markets there is enough business to sustain movie releases. And as vaccines continue to be rolled out the situation hopefully will continue to improve.

I believe we have reached the light at the end of a very long tunnel. Though the business will not go back to 2019 levels immediately, we are experiencing growing box office numbers in the Western world when we have movies people want to see. And moviegoers in China have demonstrated for many months that open and safe cinema markets recover strongly with good movies. And that is the most important thing about CinemaCon—the movies. We are simply stoked and grateful to have studio film presentations (in order of the current schedule for the week) from Sony, MGM/UAR, Warner Bros., NEON, Disney, Universal, Focus Features, Paramount, and Lionsgate.

We are also so pleased to see the majority of our trade-floor exhibitors and sponsors back at the show. Sure, challenging economic times mean some of the trade-floor participants have cut back a bit on space, and some can’t afford to rejoin us until the April 2022 show. But most will be in Vegas for the August 2021 show and will be excited to reconnect with customers. I know I will be thrilled to grab a Diet Coke and some nachos on the trade floor and check out the newest luxury recliner model.

And we have great public seminars, many important private NATO meetings, tasty food functions, and parties. Won’t it be fun to finally network in person again with so many industry colleagues? Four full days with no Zoom. Just imagine.

So how did we survive those 16 months and prove the aphorism that “what doesn’t kill you makes you stronger”? How is it that we can gather once again in Vegas to learn, network, and celebrate the moviegoing experience? Well, we did it together. The NATO and CinemaCon staff joined with hundreds of member volunteers in daily crisis management of epic proportion. Never in my 30 years representing motion picture theater operators have tasks so huge confronted our industry—true existential challenges.

First there was the closure of cinemas across the world and the resulting hardship to our industry’s passionate workforce. In the U.S. the Will Rogers Motion Picture Pioneers stepped up with an employee-relief grant program that helped thousands of workers. NATO and Sony each chipped in one million dollars. Lionsgate held a very cool fundraiser with Friday-evening films for the home. And we helped our employees. Then NATO supported legislation in Congress to provide federal supplemental unemployment compensation to furloughed workers. Exhibitor leaders internationally lobbied for similar programs in their territories. This is an industry that looks after its own people.

Next we needed to create a plan for the safe reopening of cinemas. A task force of members worked with NATO staff and two leading epidemiologists to develop “CinemaSafe,” a set of health and safety protocols. NATO and our members backed the program with public outreach and selected digital advertising, supported by money from NATO’s reserve fund. (That reserve fund, by the way, has been crucial in many ways during the pandemic. Proceeds from ShoWest and then CinemaCon, managed by the NATO Board and Investments Committee members, helped us develop the fund over the past 20 years just for a crisis like this.)

The CinemaSafe program gave our patrons confidence to come back to the cinema when they were allowed to open. The various NATO-affiliated regional units across the country worked tirelessly with NATO and CinemaSafe to convince state regulators that cinemas could be opened safely once more.

CinemaSafe also helped us work with studios to get some movies into the marketplace. Warner Bros. and Christopher Nolan deserve high marks for Tenet, and so does Solstice Studios for releasing Unhinged.

With the help of the Global Cinema Federation, as well as important international exhibition leadership organizations such as UNIC in Europe, exhibitors around the world compared best practices and strategies on safety protocols, reopening strategies, return-to-moviegoing campaigns, and movie supply issues.

Then of course the second virus wave hit in many territories, and we had to go through it all over again.

Throughout 2020 and into 2021, exhibitors confronted a revenue crunch of epic proportion, with many companies losing more than 90 percent for many, many months. Supported by hundreds of friends in the creative community (thank you Motion Picture Association, Directors Guild of America, and your various members!), NATO and our members lobbied the federal and state governments for help to keep motion picture theaters and their many jobs alive to the other side of the pandemic. Congress enacted the historic Shuttered Venue Operators Grant program, as well as several important tax benefits, and many states followed suit with their own grant programs or tax-relief legislation.

With these various efforts the vast majority of our domestic members have stayed afloat. And many other countries devised programs to help exhibitors and their employees. Now, rising vaccination and box office numbers offer the promise of a return to profitability. But where does it go from here?

Your NATO Board of Directors and staff are working to ensure that theatrical exhibition doesn’t survive the pandemic only to be sacrificed on the altar of the streaming wars. Release models and windows necessarily changed during the pandemic because distributors couldn’t get the same returns on exclusive theatrical releases. At the same time, those studios with streaming services got caught up in a battle for subscribers that led to some bad business models for the profitability of individual movies.

Coming out of the pandemic, these models must change again. Windows won’t go back to their pre-pandemic state. But they won’t continue in their pandemic model either. A new course that balances a robust period of exclusivity with the new in-home streaming ecosystem must be set for the survival of the moviegoing experience—and the art form preferred by most filmmakers.

That is why NATO is working with the federal government on an antitrust safe harbor that would confirm the ability of exhibitors to come together as a group and sit down with distributors to chart this path forward in a manner that benefits everyone. The very future of the cinema depends on it.

I look forward to seeing you at the show, to celebrate the return of moviegoing, and to discuss how to protect its future.

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