NATO Chief Calls for Investors to Help Theaters

Michael O’Leary took the stage at CinemaCon for the first time as president-CEO of the National Association of Theater Owners and his message was clear: strained theater circuits need assistance, as they are still dealing with the lingering impact of the COVID-19 crisis and the dramatic slowdown in movies due to last year’s labor strikes.

“Keeping pace with the increasing demands of the movie-going public is not new, but it does require capital. And to our friends in the financial industry, investing in the talented people that run the innovative theaters across this country and the world is a smart investment. Getting more capital into the system will benefit everyone — creatives, studios, exhibition, local communities and, most importantly, movie fans,” said O’Leary, who took over as NATO chief a year ago.

His CinemaCon address to thousands of theater owners attending the annual convention comes as Regal Cinemas emerges from bankruptcy under new ownership, and as many exhibitors face cash issues, including mega-circuit AMC. And a downturn at the domestic box office isn’t helping matters. Domestic box office revenue so far this year is presently running 10 percent behind 2023 — which itself didn’t match pre-pandemic numbers — due to a marked lack of major studios titles due to production delays stemming from last year’s writers and actors strikes.

Exhibitors, Hollywood and Wall Street had hoped that moviegoing could return to pre-COVID levels in 2024, but those hopes have now shifted to 2025. This year’s edition of CinemaCon is being impacted by the angst. Sony is sitting out the show entirely (though its anime-focused arm Crunchyroll is attending), while there is far less signage for movies around Caesar’s Palace than normal. And historically, the state-of-the-union address is followed by a major studio presentation. This year, it was Crunchyroll.

But there’s still bound to be plenty of headlines as the studios tout their upcoming slates to exhibitors. Disney, Warner Bros. and Universal are all expected to give robust presentations, while Paramount’s presentation is sure to be clouded by talks of a looming sale.

O’Leary maintained an upbeat tone throughout his speech but acknowledged changing times, but did call on exhibitors to partner more with distributors during the marketing process. “We can’t simply rely on movie fans to come back, we have to grow new audiences.”

“As we gather this week, much of what we have long believed is open to reconsideration,” O’Leary said, who called out the historic agreement that ended the strikes. “But inflection points like these are moments of opportunity. And this last year has shown me that the future of this industry — indeed, the state of this industry — is limitless.”

Continuing he said, “Movies on the big screen benefit everyone. More compelling movies bring more movie fans to the theatre, which in turn increases the desire of consumers to return and see what is coming next. Everyone wins.”

To that end, O’Leary assured the crowd that studios and other distributors have consistently reaffirmed their commitment to theatrical.

Streaming used to be a ongoing point of controversy at CinemaCon, but that tension has ebbed now that both Apple and Amazon are giving some of their traditional runs at full theatrical release.

“We should always support partners and marketplace decisions that increase movie production and put more movies with a clear, exclusive theatrical run and marketing support into your cinemas. We know that a movie that begins its journey with theatrical exclusivity is more successful in every subsequent ancillary platform,” O’Leary said. “This should appeal to people who want as many film fans as possible to see their movies, but also to people that want to make money.”

NATO hosts CinemaCon, but always invites the Motion Picture Association to share in the state of the industry presentation. During his remarks Tuesday, MPA chief Charlie Rivkin announced a new initiative to work with members of the U.S. Congress to enact judicial site-blocking legislation in the United States (Rivkin has made fighting piracy the hallmark of his tenure).

“For anybody unfamiliar with the term, site-blocking is a targeted, legal tactic to disrupt the connection between digital pirates and their intended audience,” Rivkin said. “It allows all types of creative industries — film and television, music and book publishers, sports leagues and broadcasters to request, in court, that internet service providers block access to websites dedicated to sharing illegal, stolen content.”

Rivkin said this approch focuses only on sites featuring stolen material. “There are no gray areas here,” he said.

In their respective speeches, both Rivkin and O’Leary again and again extolled the communal experience of watching a movie with other people.

O’Leary also stressed the importance of having a variety of movies, versus relying solely on blockbusters. “We must have a strong and vibrant market for movies with smaller or medium sized budgets,” he said (the day before, he hosted a panel on the topic).

“In a world that is increasingly divided, that increasingly places tribalism over community, the theater brings us together to share a common experience,” said O’Leary. “The movie theatre encourages us to listen, to think, and to learn. There is no place else like it. The theatre is a place to cherish, to celebrate, and to fight for!”