Highlights: International Cinema Technology Association (ICTA) 2018 Seminar Series

Highlights: International Cinema Technology Association (ICTA) 2018 Seminar Series

The International Cinema Technology Association (ICTA) has a long history of mutual collaboration amongst the cinema industry’s greatest innovative minds.  Since its formation in 1971, ICTA has organized seminars, in specific market areas, exclusively, to exchange cutting-edge ideas, share major technical advancements and introduce new cinematic products.  It’s a way to engage members, network and keep them informed.  This year’s ICTA forum reached a record audience of attendees and remains one of the most significant forums held in the Cinema Technology Industry.

Below are our main takeaways and perspectives from the event:

The Industry Continues to Grow and Consolidate

 The hot-topic amongst this year’s participants was consolidations and the mergers and acquisitions that took place throughout the year. The Cinema Global Box Office reached a record high of $39.92 billion, whilst M&A activity established a major transition for key players. The most significant domestic deal was formalized, on December 14, 2017, when the Walt Disney Company, purchased 21st Century Fox, for $52.4 billion.

This landmark merger represented a transformation for The Hollywood Big Five and ended The Era of Big Six Studios. The trend continued when UK’s Cineworld Group, plc, began discussions to acquire Regal Cinemas, U.S.

What we experienced is in order to adapt, exhibitors must implement M&A strategies that expand their global footprint and capture market shares. As with other industries, this vital market adjustment is necessary for industry players to remain relevant and competitive; especially, as pressure from Hollywood, consumers and technology continue to threaten profits and margins. We expect this trend to continue through 2018 and into 2019, as markets continue to adjust.

Reduction in Hollywood Content Releases and Shorter Window Life Cycles Continue to be a Challenge

We are seeing an increase in film releases from non-Hollywood studios (e.g. Warner, Disney, Fox, Paramount, Sony and Universal).  According to 2006 Box Office data, there were 128 releases from the mayor Hollywood studios; however in 2016, the number dropped to 93 releases; an approximate 27% reduction.

Coupled with a decrease in content availability, the industry is challenged by diminishing windows of distribution, between theatrical and digital releases; additionally, within the past two decades, releases for movies have shortened significantly.

In the past, consumers waited, anxiously, for months, to watch a new theatrical movie release. After the premiere, they waited additional months, for video distribution, in order to rent and/or buy a copy of the DVD.  To view it on the TV; they, would wait for years.

Today, on-demand giants like Netflix and Amazon, continue to pressure studios and independent producers to expedite content release. Now, we see films outside the top 100 box office chart arrive on VOD, an average of weeks, before making its way to DVD.

Cinema Attendance in the US is Declining

In the beginning of this post, we mentioned last year the cinema attendance had reached a global record high; however, there was a slight decrease in domestic attendance from $11.4 billion in 2016, down to $11.12 billion in 2017; a 2.3% drop in attendance.

So, how can the industry adjust and facilitate the necessary changes to address this issue? What has worked for some exhibitors, in specific market locations, has been to incorporate independent foreign content into their schedules, along with the promotion of special domestic cinematic events.

To further boost theater/audience attendance, the industry is rethinking their programming. Some of these avenues include Event Cinema and e-Sports. Additionally, Fathom Events, successfully, entered the entertainment arena, by offering high-quality, affordable broadcasts of music concerts, anime, sporting events and comedy acts. Media Mation, which recently started offering and facilitating E-sport tournaments, is bringing the gaming community together, for special events which fill the lobby/auditorium during low attendance days; this has proven to attract audiences more than typical movie theater content could provide.

The Transition to LED Displays

Every new technology possesses new challenges; especially, how it’s deployed and/or implemented. The panel outlined challenges and limitations for this new state-of-the-art technological advancement. They discussed the inherent barriers to overcome and ways to ensure both regional and global exhibitors can, successfully, transition to LED screens.

CE+S is committed to driving innovation and change within our industry. To help exhibitors transition to LED theater displays, we have partnered with Samsung and JBL.  We will assist our clients to overcome implementation challenges by developing new business models that can facilitate this technology adoption as we believe this new technology enables cinema patrons to enjoy a superior theater experience, delivered through premium high-quality imagery and sound.

Read More on Samsung's LED displays