Published at European Digital Cinema Forum – 9 December 2015. Please note: opinions expressed in this article are not those of EDCF but of the author, whose work is published for information only. Text circa 6.000 words + Appendix circa 2.000 words.
Table of Contents
1.1 The condition to secure a diversity of cinema theatres
1.2 The need to negotiate a new distribution deal, to explore alternative business models
1.3 The target to address and to attract an audience for every screening
1.4 The urgency to curate an artistic diversity of cinema programs
2: Six Strategies of programming – 2.1 Luxury Cinema: creating comfortable settings; 2.2 Movie Nostalgia: conserving old settings; 2.3 Event Cinema: organizing alternative settings or alternative content; 2.4 Cinema Club: ‘social cinema’ – stimulating to like, share, interact and participate; 2.5 Niche Film Festivals: catering to target taste groups; 2.6 Film Heritage: expressing a personal view on film history.
3. Discussion – 3.1 The Never-ending Development of Strategies; 3.2 Some Critical Thoughts about ‘Home Cinema’
3.3 To Conclude
Has the cinema a future? This remains a relevant question, especially in 2015. Twenty years ago the centenary of cinema was celebrated and for many experts it was an occasion for expressing their fear of witnessing the end of cinema as we know it. Is there still reason for alarm in 2015? I do not think so.
On the dark side there are still issues that needs attention, I discuss these in the first paragraph hereafter. First, we need a diversity of cinema theatres. Second, we need a new distribution deal, to explore alternative business models. Third, we always need an audience for every screening. Fourth, we need an artistic diversity of cinema programs. On the bright side there are many opportunities to counter all these issues. In the second paragraph, I limit myself to a discussion of a line-up of six strategies. Some are old and proven, some are relatively new and promising.
This position paper originated from the general question ‘Where do we stand now?’, measured in Summer 2015. Film exhibition is more than ever in a process of adapting to new circumstances. Times are changing and so does the general set-up of cinema exhibition. One indication of this development is the fact that film projection in nearly all film theatres worldwide has been digitized. The purpose of this paper is to explore the consequences of this transition regarding the safeguarding and enhancing of the diversity and quality of the programs offered in European cinemas. Digitization offers a lot of potential possibilities for ‘speciality programming’, such as cinema on demand, or new forms of Event Cinema (integration of various alternative settings, or alternative content). But in practice it still implies a lot of challenging efforts to realize a wide variety of film events. In my view, it is important to face this challenge because I believe that a diversity of cinema programs improves the way we see ourselves and the others, far away and close at hand. The opportunity to have a choice of cinema experiences is for me an essential condition for a tolerant and open-minded point of view on the world you live in, a stimulation to reflect upon your own position and circumstances.
Digitization compels us to rethink the features of an inspiring cinema programming that stimulates the survival of a high-quality film culture. I would like to investigate the current situation and discuss the conditions, threats, possibilities and various existing options.
1.1 The condition to secure a diversity of cinema theatres
A sufficient diversity of cinema theatres in each territory is a prime condition for a healthy film climate. The diversity can be measured by the range of market segments that is covered. The market consists of commercial and non-commercial exhibition, subdivided in first run theatres and second run theatres (also known as repertory cinemas or revival houses). The supply of screenings should also contain a substantial representation of the international film festival circuit and the international archival circuit (cinematheques). Another indicator of diversity could be the range of size and ambiance of the cinema spaces, and to investigate if each territory has a sufficient variety of megaplexes, multiplexes, art house cinemas, and film clubs.
Digitization can endanger the diversity of the cinema exhibition infrastructure, because in general small independent ‘miniplexes’ and single screen cinemas are struggling to finance the huge necessary investment in equipment. The inevitable investment in digital equipment is also a constraint for new, upcoming small initiatives, eager to enter the professional film exhibition market. The division is not between 35mm and 16mm anymore, but between Digital Cinema Package (DCP) on the one side and DVD or Blu-ray at the other side. Happily enough, several European governmental support programs were developed in recent years for digitization of cinemas (Norway as first and most famous example) and also several commercial options for leasing equipment are facilitated.
In the digital age it is necessary to keep all equipment and computer systems up to date. Besides that, a lot of new technological developments on the level of cinema infrastructure (film transport) and equipment (image and sound) are constantly introduced. I am not an expert of technology, but I have my common sense doubts about the flow of these so-called ‘improvements’: some of them are sincerely innovation driven, some of them are just profit driven. As far as I understand it, improvement of ‘Screen Brightness’ or ‘High Dynamic Range Imaginary’ seems to be a really significant issue and laser light projection seems to be a promising option. Dolby Atmos can be considered as a truly revolutionary development in cinema sound. In contrast, ‘High Frame Rate’ (HFR) and higher image resolution (4K and beyond) however seem to have very little impact on the quality of the image. In any case, cinema owners around the world are still facing huge investments to keep their equipment running and up to date. I leave a critical assessment to the experts. The European Digital Cinema Forum (www.edcf.net) is a valuable platform of reference, managed by President David Hancock and CEO David Monk. Other writing and teaching technology experts of digital cinema include Peter Wilson, Michael Karagosian, Olivier Hillaire, Nick Dager, Frank de Neeve, and Kommer Kleijn. In the meanwhile, I keep in mind that the pragmatic priority remain as always to secure that the sound volume is not too loud in the perception of the audience and to avoid at all costs a black screen.
To conclude this technology paragraph, a comparison between digital projection and 35mm projection is interesting. Film prints have become computer files. What are the issues of discussion concerning this transition? Is it a gain or a loss?
• Technological: is digital projection delivering the same image quality as 35mm (color, contrast, resolution)? Some experts bemoan a loss of detail and are looking back in melancholy. For a more positive critical perspective, see among others: http://www.filmcomment.com/entry/this-is-dcp-is-that-it. For professional technical assessments, see among others: www.imago.org (European Federation of Cinematographers).
• Financial: is digital projection more cost-efficient or more expensive in the long run, for programming regular releases and programming alternative content?
• Environmental: what is the score of digital projection in the perspective of the environmental footprint (use of raw materials, need of transportation), compared to 35mm? How green is your valley of data?
• Archival perspective: is storage of digital files safe and sustainable?
• Legal: is digital projection offering a better protection against illegal trade and piracy than 35mm?
• Theatre Management: Manual controlling the projection and flexible scheduling the inhouse screenings changed into automation, remote monitoring and security encryption. What is the balance between advantages and disadvantages? Copyright in cinema exhibition is protected by the encryption of movies, which results in communicating a Key Delivery Message (KDM). This proves to be still a bottleneck in the workflow of cinemas.
1.2 The need to negotiate a new distribution deal, to explore alternative business models
Ten years ago the business model for commercial film exhibition was clear: generally, theatrical release in combination with television sales and home cinema releases (video and DVD) resulted in nice profits. At the moment, the revenue of home cinema has declined (VoD has still a relatively small market share), television industry is changing, and cinemas have been digitized.
The times of territorial exclusivity are over. We are moving towards a Digital Single Market (DSM) and multi-platform releasing. So, the market provides less profit, and generally national governments are providing very little financial support for independent cinemas and the option of crowdfunding is still to be developed in the area of cinema exhibition. How to survive?
In economical perspective, the most basic question is: Who pays which part of the costs of investments and maintenance? Who gets which part of the profit in the film value chain? Or more realistic: in which way all the various expenses and investments can be recouped? We need a new structure of financial deals and alliances between the whole market spectrum of exhibition firms, distribution companies, integrators, sales agents and film producers.
Digitization facilitates an increase of ‘saturated releases’. In general, this enables the distributor to reach a quick turnover. This commercial practice could be considered as a positive change for small cinemas because formerly they had to wait until a 35mm-print was available for them. On the other hand, the result is that just a few releases are screened in every city, in many bigger cities even in several cinemas at the same time. The explanation is simple: distributors want to recoup their part of the Virtual Print Fee as soon as possible. Fair enough, but in my view this diminishes the possibilities for diversity of the cinema program. Recurring debate arises concerning the evaluation of the ‘Virtual Print Fee’ (VPF): is it a well-balanced solution of sharing costs? In my view, the VPF is most profitable and useful for mainstream releases. However, there are experiments with a reduced VPF and other tailor made VPF-agreements to accommodate small cinemas and restricted releases.
Cinemas do not offer an exclusive access to films anymore. Release windows are getting more narrow and I expect that they vanish soon. Commercial releases of the big box office hits are the last stand. It seems to me inevitable that the same content will be available everywhere, through various channels, in a variety of ways. Therefore, it gets even more important to present a divers and unique cinema program, in order to give added value for the customer. The ideal situation is to have options of flexible multi-programming in each cinema. This means not only offering a wide range of films, but also different versions of films and to create opportunities for Event Cinema.
Recent debate has risen about the question what are the positive and negative consequences of ‘Day and Date Release’? This term indicates a wide, multi-platform release pattern where a film opens on the same day simultaneously at more than one territory, and more than one distribution channel (cinema theatres, DVD, Blu-ray, online streaming). The new distribution model of ‘Day and Date Release’ was successfully tried out in the United States with the release of Margin Call (J.C. Chandor, 2011) and Melancholia (Lars von Trier, 2011). The BFI Distribution Fund supported in 2013 the multiplatform releases of distributors Picture House/Film 4 (A Field in England), Curzon-Artificial Eye (A Late Quartet) and Lionsgate (Bachelorette), see Wiseman (2013). In the summer of 2013 the European pilot project ‘TIDE Experiment’ was tested, giving the documentary Viramundo: A Journey with Gilberto Gil (2013) a multiplatform release. A second test followed the same year, with the release of the feature film Magnifica Presenza (‘A Magnificent Haunting’, Ferzan Ospetek, 2012). In 2014 the experiment continued, with among others the Dutch release of Those in Peril (Daniel Borgman, 2013). Summer 2015 the documentary Dior and I (Frédéric Tcheng 2014) was released. The experiment was expanded to contain also a circuit of ‘Festival-to-Date’ (for updates see http://thetideexperiment.eu). Most people in the industry however are not convinced of the profitability of the Day and Date approach. In December 2013 the three European network organizations of film exhibitors (Europa Cinemas, CICAE, UNIC) for instance did send out a jointly statement arguing the need to protect the use of release windows. See also Candler (2014) and Keslassy (2015).
At the Art House Convergence 2015, discussions were held about new business models. Trade magazine Variety reported about this US-exhibitors conference: “One of the most promising new ideas comes from Mark Fishkin, who runs the Christopher B. Smith Rafael Film Center theater and the Mill Valley Film Festival through his nonprofit California Film Institute. “What if there was a model where filmmakers work with a theater, market the film with in-person and online Q&As, go out on VOD at the same time and, with new technology, geographically limit the (number) of people they reach on VOD in a radius that’s comfortable to them?” he says. “It allows the filmmaker to test it, and if it’s successful, roll it out as a limited theatrical release in a similar way in more markets. And it would allow the theater to share in revenue they haven’t shared before.” (Goldstein, 2015).
1.3 The target to address and attract a sufficient audience for every screening
It is an undeniable fact: cinema is not a mass medium anymore. There are alarming statistics about the average cinema attendance worldwide. The average Dutch person for example goes something like 1.8 times a year to the cinema (this key figure has been worse). The popularity of cinema is affected by the growing competition in the leisure market. The gross revenue in retail of computer games for instance became bigger than the revenue of cinema tickets, this happened already several years ago. In contrast, Video on Demand (VoD) is still a smaller market than cinema exhibition.
I would argue that digital projection influences the existing ways of addressing and attracting an audience in two ways. First, you get new faces in your cinema. Digital projection stimulates the cultural diversity of the audience, through the expanded choice of available films and also by providing the opportunity for multi-language subtitling. This option might attract new audience segments or target groups, such as the expat community (keywords: cosmopolitan curiosity, international circulation, tourist marketing, cultural diplomacy) or immigrants (keywords: nostalgia, second generation, ethno-programming, world cinema). Second, you get a new conversation about cinema. The development of digital projection has emerged alongside an increase in options for audience interaction. In a quantitative sense this can happen through crowd-sourced ratings at social media and IMDB, opinion aggregators (review portals such as Rotten Tomatoes for example), as well as all sorts of web-based recommendation engines. In a qualitative sense there are new possibilities for expressing opinions in blogs and also for creating dialogues, stimulating responses, sharing curating power and producing crowd sourced criticism. The ideal is to reach a status of tolerant pluralism: a wide variety of approaches are taken, a vast diversity of views and stands are expressed, different methods of interpretation and evaluation are accepted. However, user comments are still uneven in quality and depth. It proves to be difficult to create real conversations. Most of the time verbal response limits itself to the level of creating a superficial buzz of approval or rejection.
It is still a continuous struggle to seduce audiences to pay attention to your screenings, and it is even tougher to stimulate them to pay admission. Continuous fundraising and effective marketing are essential conditions for allowing filmprogrammers a basic freedom of choice. In addition, booking practices of distributors should be flexible enough, which is often a matter of fierce negotiation. Let’s ignore further details of economical and technological aspects of the current situation in the film industry, and turn to the content of the cinema program in European venues.
1.4 The urgency to curate an artistic diversity of cinema programs
What would be a relevant definition of artistic diversity of the program in cinemas? The definition formulated by network organization Europa Cinemas is a quantitative regulation: “a certain minimum percentage of screenings of primarily non-national European films”. See for details the Guidelines: ttp://www.europa-cinemas.org/en/Supports/MEDIA.
Academic studies performed by UNESCO and other parties distinguish three formal aspects of cultural diversity, the key words are: 1. richness of variety; 2. balance; 3. disparity. See also Barclay (2011). The first aspect could be specified as follows: an artistic diversity of the program in cinemas implies a variation of special event screenings and a broad range of film heritage, in addition to the presentation of the regular new releases of high graded international film productions. A more detailed specification of a wide choice of content of cinema programs could be formulated using some contrasting indicators. To start with, a diverse cinema program, local or national, would include a juxtaposition of all various approaches between fiction films and documentaries. Or in other words, the ideal would be to present a full range of fantasy and ‘true stories’ based upon reality. The safeguarding of a plurality of voices would also imply a diversity of business models. The result would be a mixture of commercial markets and non-profit niche markets, big and small releases, reruns, reprises, event cinema, film festivals, and audience driven programming. And naturally a wide range of all kinds of film heritage is requested: classics, minor classics, silent films, ephemeral films, cult films, experimental films, artists-films.
Let’s be realistic: to create an exciting cinema program with a lot of variety of selected films remains a difficult task because between ambitions and realization stand several practical limitations, constraints and business laws.
First, the side of supply: the possible amount of national releases per year is limited. Each territory has its point of saturation. What is the limit of the amount of films in distribution?
Second, the side of presentation: Digitization of cinemas made a simultaneous release of a large amount of films in many copies possible, in many weeks a year. That is very finely fact, but each cinema has a rather limited amount of films that can be presented throughout the year. In theory you could program each day roughly four different films in each screening room, in practice this is unfeasible. The core question here is what do you consider the bottom line of doing sound business? A popular criterion used to answer this question is the determination of the minimum average number of visitors per show. Where do you draw the line of what is profitable and makes sense: at a minimum average of 50 visitors or 10 visitors or 5 visitors? At exhibition level, there is currently a noted tendency of ‘congested screens’. This situation seems to be just a luxury problem, but in my view it is an alarming imbalance that is bad for business and it limits also the freedom of choice of the programmers. However, it is perfectly possible to reason differently: “On the other hand, it can mean that the wider range of movies available for programming enables more precise criteria to be used, in order to appeal to a better defined and perhaps even new target audience” (Dieter Krauss, 2014).
Third, the side of customers: There is also a limit to what the audience can digest. The population can be segmented into a small group of heavy users (1 or 2 films per week) and a large quantity of incidental visitors (1 or 2 films a year), completed by a marginal amount of people who practice a total abstinence and never visit a cinema. Do you aim to stimulate the heavy users to see even more films, or do you try to seduce the incidental visitors to see one film more each year? In both cases it is not possible to stretch the demand infinitely.
As a programmer, it makes a difference if you are king of a single screen cinema or an emperor overviewing over 100 screens. You have different possibilities and constraints regarding doing business. However, on both sides of this scale you have to decide what your focus is: in which degree do you want to influence the supply side of your accommodation (actively searching for new films, or just passively react on offers from distribution companies) and in which degree do you want to influence the demand side (influence it actively, or just mirror public taste).
Seen from the perspective of the customer, a diversity of cinemas and cinema programs implies a sufficient variety of choice for you, matching your particular and individual expectations, desires and needs. In my view, to reach this kind of diversity it is necessary to satisfy two conditions. First, there should be a sufficient amount of ‘little shops around the corner’, in combination with a solid number of mainstream cinemas. Second, there should be a balanced mix of active and passive programming. In other words: it is necessary to customize the visit of the cinema and the screenings. This implies to respond more active to particular and individual wishes of both existing and potential customers. It means turning the supply chain into a demand chain. In my view, the average screening has become too much a standardized affair, an unimaginative routine that has inevitable only a limited appeal. To diversify your program means besides presenting a plurality of content, also to open up your screens to all possible audiences. Traditional distinctions of audience segments are age, gender, and life styles. The general challenge is to attract people with different preferences and expectations, people from different cultural backgrounds and belonging to different taste groups. It is necessary to develop a visionary strategy to widen the existing network of customers and to engage also audiences that are not yet currently attending screenings in a cinema. The implementation of the ‘Lean Startup’ strategy seems to me to be promising for cinemas too. I found the general arguments of Ries (2011) quite convincing. It would be interesting to apply his innovative approach of developing business to the domain of film exhibition.
Summarized, the central question for me is: in which way could you aim for both a sustainable high quality artistic diversity, and at the same time create a network of loyal customers through an effective and efficient out-reach to all possible audiences?
This text is an updated and enlarged rendition of my presentation at the Media Salles Conference ‘DigiTraining Plus 2013: New Technologies for the European Cinema of the Future’, held in Poland, 28 August – 1 September 2013. I would like to thank Elisabetta Brunella and her team for inviting me, and compliment them for the inspiring way they curate this series of excellent expert meetings.
• Barclay, Alexander (2011) The Cinema Industry, between Free Trade and Cultural Diversity: An Inquiry into Economic and Legal Aspects. Saarbrücken: VDM Publishing.
• Bosma, Peter (2015) Film Programming: Curating for Cinemas, Festivals, Archives. London: Wallflower Press/New York: Columbia University Press.
• Candler, Sheri (2014) ‘Day and Date Film Release Conversation’, blog-post 18 September 2014, URL:http://www.shericandler.com/2014/09/18/day-and-date-film-release-conversation/
• Cousins, Mark (2004) The Story of Film. London: Pavilion Books.
• Goldstein, Gregg (2015) ‘Art House Convergence: Event Explores New Business Models for Independent Theaters’, in: Variety, 15 January 2015. URL: http://variety.com/2015/film/spotlight/art-houseconvergence-event-explores-new-business-models-for-independent-theaters-1201405459/
• Kesslassy, Else (2015) Why Film Bizzers Are Still Outraged Over Europe’s Digital Single Market Plan, in: Variety, 5 May 2015. URL: http://variety.com/2015/film/news/digital-single-market-europeancommission-geoblocking-protest-1201487308/
• Krauss, Dieter (2014) ’Digitization at the service of diversifying offer’, presentation at DigiTraining Plus 2014 (Krakow). URL: http://www.mediasalles.it/digitalk2014/
• Pariser, Eli (2011) The Filter Bubble: What the Internet is Hiding From You. London; Penguin Books. See also: www.thefilterbubble.com
• Pine, B.J. & J.H. Gilmore (1999/2011) The Experience Economy: Updated Edition. Boston: Harvard Business Review Press.
• Ries, Eric (2011) The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Business.
• Tryon, Chuck (2013) On Demand Culture: Digital Delivery and the Future of Movies. New Brunswick: Rutgers UP.
• Wiseman, Andreas (2013) ‘UK Distribution: A date with VoD’, in: Screen Daily, 7 October 2013, URL: http://www.screendaily.com/features/uk-distribution-a-date-with-vod/5062241.article
The Scandinavian network organization ‘Film Think Tank’ has developed a project in progress, called ‘The Big Film Think: Demand, Diversity and the Audience-Driven Future’. An overview is given at their website: http://filmthinktank.org/fileadmin/thinktank_downloads/TT_-_16_HC_THINKTANK_clean_17.03.15.pdf