The UK’s studio heads tell Wendy Mitchell about how they cut through the clutter in a crowded marketplace, whether huge blockbusters are too risky, and if theatrical windows will ever change.
There is the old joke that the English love to talk about the weather - and this summer UK distributors had good reason.
The hottest summer in a decade had people running to buy suncream and barbecues, not cinema tickets. Fox UK managing director Cameron Saunders says simply: “It is a huge challenge to get cinema-going at the top of the list with that weather.” Admissions in July were 20% down on the 10-year average.
The weather is just one of the challenges facing the UK’s studio distributors in 2013. “It is a crowded market, a risky market, an expensive market. Media is expensive and exhibition terms are challenging,” says Josh Berger, Warner Bros UK president and managing director.
‘It is a crowded market, a risky market, an expensive market’
Josh Berger, Warner Bros UK
Admissions have been largely flat year-on-year to the end of August (currently up about 1%), but box-office grosses have been up about 3% compared with the same period last year - which means ticket price inflation is driving growth, not more ‘bums on seats’. Ian George, managing director of Paramount UK, agrees it is “not a market for the faint-hearted”, but there are points to celebrate, such as the UK box office clearing $1bn for the past four years in a row.
For better or worse, there are more films than ever being released theatrically. There were about 650 feature films launched in 2012 - not including an increasing amount of alternative content - which George says compares with 394 films in 2002.
“That is just not sustainable,” Saunders adds. “Of course, it’s good to offer diversity and alternative content. It’s an issue, though, for everything that cinemas have to programme. Films are coming off prematurely.”
Disney’s Tony Chambers, head of studio sales and distribution EMEA/UK, says: “From a marketing and communications perspective that’s 650 movies being spoken about to a consumer. There are other alternatives such as the internet and the digital consumption of content in the home and on the go, that weren’t there five years ago and which are now competing for our time.”
George says gaming and event TV such as The X Factor are also a threat to cinema-going. As a result, distributors are spending more to get noticed.
And they are prepared for any kind of weather, as Saunders points out: “Fundamentally, global warming is introducing significant weather risk. You simply cannot predict with any certainty what the weather will be like. There are far more extremes. This can be great for business when you get those long, cold, wet summers, but you also get baking hot Easters, prolonged summer heatwaves, and then the country grinds to a standstill with snow and audiences can’t even get to the cinema.”
In response to all these changes, savvy marketing is becoming more important than ever.
Each studio obviously has a pipeline from its US parent company, but there is also flexibility to think locally. For Universal UK and Ireland managing director Niels Swinkels, for instance, there is product coming in thanks to deals with the likes of Focus Features, Illumination and the UK’s own Working Title. He also has the remit to acquire films of particular interest to the UK market, with one recent acquisition being Lone Scherfig’s Posh, an adaptation of the hit West End play about a drinking club at Oxford.
Universal UK is also working with other UK talent such as Alex Garland on Ex Machina. “We have become more active with local-level acquisitions in multiple territories,” Swinkels notes of the strategy.
Lee Jury, Disney vice-president UK & EMEA, adds: “The need to be locally relevant has never been more essential.” For instance, Disney’s Planes added local voice cast for the UK release, including TV presenter Barney Harwood and Sky Sports’ Formula 1 commentator David Croft.
‘The greatest need today is to be as nimble as possible; we have to be able to react very quickly’
Lee Jury, Disney UK & EMEA
One of the biggest challenges, and opportunities, in the digital age is being able to be flexible during a film’s run.
On the riskier side, Ian George notes: “Digital brings much greater flexibility in the ‘want it now’ generation; exhibitors can react minute by minute to audience demand and change films and shows accordingly.”
Saunders adds: “When a film works you can go from one screen to every screen. When it doesn’t work it goes away more quickly. So it makes all of our lives riskier.”
Distributors are also using digital flexibility - in releasing and marketing - to their advantage. For Disney’s Monsters University, the campaign had to morph according to the unexpected weather, when the team repositioned the film to be “the place to stay cool this summer”.
“The greatest need today is to be as nimble as possible, we have to be able to react very quickly and we’re getting better at it,” Disney’s Jury adds.
Savvy marketing is also being targeted at the ‘grey pound’ as older audiences have flocked to cinemas in recent years for films such as The King’s Speech and The Best Exotic Marigold Hotel.
Saunders says those kind of hits can have an industry-wide benefit. “These are people who might have gone to the cinema once or twice a year, and they go and really enjoy it and hopefully go back more often.”
Warner Bros’ Berger wonders: “There is no question that films targeting an older audience have had great success recently. Is that a trend or was the market waiting for the right films? Still, if you have a few movies that appeal to a market, you can stimulate that movie-going habit. Success can breed success.”
Swinkels says that for older, usually more upmarket audiences, it is a longer-term strategy. “For those audiences it’s not all about the first weekend, it’s films you need to keep working.”
Above the parapet
With everybody spending a lot on traditional media -in a market where traditional media is expensive - studios are turning increasingly to innovative marketing pushes. For Monsters University, the characters came to life at a sailing regatta in Henley. For Wreck-It Ralph, Disney turned a street in east London into ‘8-bit Lane’.
“It is about figuring out the ideas that can raise your film above the parapet,” Jury says.
Warner Bros is also thinking about new ideas, says Berger. “Every year we have a slew of new approaches; that’s how we cut through the noise. It’s important to be innovative.” One of Warner’s plans in 2013 was to use retail, partnering with famed Knightsbridge department store Harrods for The Great Gatsby. The pact included window displays, a pop-up jazz bar and displays and moving screens throughout the store.
“Over six weeks, many people saw what we did at Harrods. It really worked in every way we were hoping,” Berger says proudly. “The marriage of Harrods and Gatsby was so perfect, creatively. Those kinds of partnerships become all the more important when you try to cut through the noise.”
Another tactic from Universal has been to push a ‘book now’ message on some of its recent hits, to solid success.
For Despicable Me 2, now the third biggest animated film of all time, Swinkels says: “We pushed the ‘book now’ message, which in combination with a fantastic film ensured a big opening weekend that laid the foundation for a long and successful run. We also did that with Les Misérables and Fast & Furious 6, and broke our opening weekend record three times.”
The right date (June 28) also helped with Despicable Me 2 - the film fared relatively strongly in sunny July, and as the weather worsened in August, families flocked back to cinemas. Dating is something all the studios say is becoming even more crucial with the crowded calendar.
There has been much talk this summer about the blockbuster business, as films such as The Lone Ranger, After Earth, RIPD and White House Down underperformed, and blockbuster titans such as Steven Spielberg and George Lucas were warning that studios were becoming too unstable by relying on just a few huge tentpoles.
Those huge titles are always among the slates, and they do inherently carry risk. “When you’re building films for a global audience it’s making it riskier as a business, it’s a positive and a negative. When the risk goes well, you get Life Of Pi. When it doesn’t go well, you can risk getting a big loss,” Saunders warns.
‘This one-side-fits-all window doesn’t work. Yet windows are fundamentally important, it’s about the cinematic experience and creating value’
Cameron Saunders, Fox UK
But as Berger points out, no-one complains about blockbusters being too big when they perform successfully (take, for example, Warner’s Man Of Steel).
Each studio has a slightly different approach to their slate. For Fox UK, which also houses speciality label Fox Searchlight, a diverse selection of films is crucial. Saunders says: “We are proud of what we do at Fox, from a small Fox Searchlight release to a big family movie; from Black Swan to Big Momma’s House. We say we give every film a first-class ticket for life. Our job as distributors is to maximise potential of that film.
He continues: “It is a bit like other industries; if your brief is to go out and find the next hit band and you have $10m to spend, if you invested in one band you might struggle, but if you in-vested in 40, one of them could deliver.”
Universal’s Swinkels agrees: “The key to keeping cinema-going at the top of minds is offering a diverse slate.”
At the other end of the spectrum, Disney wants to concentrate on the brand equity of companies such as Marvel, Pixar, Lucasfilm and Disney itself. Disney UK releases 12-14 films per year, with 8-10 of those considered tentpoles.
Chambers says: “We focus and will continue to focus on the bigger tentpole titles, as it is one of the ways to rise above the noise in the market - be it the theatrical competition or the competitive alternatives for our time. As a studio and as proven with Iron Man 3 and Monsters University we have the tremendous ability to leverage that tentpole strategy and success across every single other part of our business.”
Disney, of course, has properties that other studios do not have, such as theme parks. Still, Chambers acknowledges: “The size of the risk may be big but I don’t see that changing. When it goes well, it’s phenomenal.”
Working with exhibition
Protecting the cinema-going experience is crucial for distributors and exhibitors alike.
Paramount’s George is encouraged by exhibitors raising their game to compete with other forms of entertainment. “Exhibition should be applauded for what they are doing - the consumer experience has to be spectacular and affordable, and exhibitors continue to invest to ensure theatrical remains the first and best way to see a movie.”
Swinkels adds that providing “technological excellence” is important for exhibition. Exhibitors are investing in UK sites, both in growing new screens and upgrading with technology such as Dolby Atmos.
Theatrical releasing is just one part of the lifecycle, of course. “Theatrical is still the most important driver,” says George. “But you can’t live on theatrical alone.”
The lifecycle is changing in the modern world - George, like many, says the home-video revenue of days gone by is lost. “It used to be that everything worked with home video, it was like shooting fish in a barrel, but now it’s much tougher,” he says.
Pay-TV deals with Sky are steady, and VoD is growing, but it has not replaced fully that physical-product revenue. “Physical sales are still a huge chunk of the overall business but there’s a decline,” Swinkels says. “Digital is more and more offsetting that.”
With talk of DVD and VoD inevitably comes the talk of theatrical windows. It appears that UK exhibitors still are not budging on the 17-week holdback between theatrical availability and home-entertainment release.
After the Alice In Wonderland blow-up in early 2010, some independents such as Lionsgate have experimented in 2013 with day-and-date multi-platform releases - but it is not a space the studios are able to reinvent at the moment.
Fox’s Saunders shares the frustration of many when he says: “The situation at the moment is absolutely nonsense. But it’s about finding out what the alternative is; this one-size-fits-all window doesn’t work. Yet windows are fundamentally important, it is about the cinematic experience and creating value. And not for one moment do we want to give that up.” But he is frustrated that a film like Hitchcock “spent 78% of its 16-week window not being available in cinemas, the only option available is downloading illegally. That doesn’t make sense for anyone.”
Window demands also mean crunches at certain times of year - particularly August for theatrical releases that can hit timings for Christmas DVD launches. Berger would not be drawn into a specific discussion of windows, but he says simply: “Consumer behaviours are changing with technology, and the industry has to evolve with them.”