Kicking off Art House Convergence 2014

Just finished my kickoff speech at the 2014 Edition of the Art House Convergence. I’ve been asked to share the text, so here it is:

Is everybody ready to converge? Alright!

Last night I was asked by a number of you if today’s presentation would be a continuation of what I did last year, and the answer is no. One trip down memory lane is enough, and I feel like I got that out of my system.

But I am going to start out with a look backwards.

When I first started out in the Film Business, I learned a couple of very quick lessons that were in no way related to film, but were in every way related to business.

First, I learned that Business is dominated by people who are driven, sometimes myopic, and willing to do almost anything to succeed.

The second thing I learned is that the Film Business, specifically, is driven more by ego than by profit. After all, it has never been a predictable, scalable business in the traditional sense that allows for believable projections and charts with any sort of certainty. So who is drawn to such a business when far more money, far more predictably can be made elsewhere? The answer would be those people who somehow convince themselves that they know better than everyone else, or that they’ve come up with some kind of system to beat the odds.

So given those two hard truths, it doesn’t take too much imagination to realize why there was and is very little cooperation among the various players in the business, whether they be exhibitors, distributors, producers or anyone else.

The art film exhibitors in my youth…pioneers like Dan Talbot, Don Rugoff, Randy Finley, Mel Novikoff, George Mansour, Bob Laemmle and many others, were passionate, single-minded, competitive and fiercely independent. There was very little sharing of information or camaraderie. They were in some cases chasing the same films for exhibition, currying favor with the distributors, try to one-up the competition with the film rental deals they were able to negotiate and harboring dreams expanding into each other’s territories.

The same thing has generally been true of the distributors. They’re always chasing the same films for acquisition, fighting each other for holdovers, jockeying for opening dates, competing for attention in the media, etc.

One the first times I attended the Sundance Film Festival, I was on a panel with Tom Bernard, Jeff Dowd and a couple of others who I frankly can’t remember. In response to some long forgotten question, I vividly remember a panelist saying, and I quote, “In the last 5 years, I’ve worked on every specialized film that was released in theaters.” There was a long pause while everyone else on the panel turned to look at him. He continued, “Either for or against them.” The idea that someone would claim to spend even part of their time conspiring AGAINST someone else’s films was an eye-opener for me. It cemented my understanding of the world I lived in in.

Russ kind of nailed it in his pre-convergence email to all of us, when he said “The commercial film business is rooted in a retaliatory (greedy) and monopolistic ethos; it is an ethos as creaky and counterproductive as it is dysfunctional and misanthropic”

Yep.

Yet, I was also briefly exposed to a quite different model earlier in my career, when I was doing non-theatrical sales for Cinema 5. There was an organization at that time called the NFDA, the Non-Theatrical Film Distributors Association. Perhaps it was the fact that selling films to colleges and libraries was such a low stakes nickel and dime business that allowed such an organization to exist, and certainly the goals of the organization were modest. The main purpose was to trade information on customers; to identify those that didn’t pay and the ones that destroyed the 16mm prints they were sent.

The only other NFDA activity that I was aware of was that there was a volleyball league that played weekly games in Central Park. By the way, Cinema 5 (my team) won the championship in that league several years in row because we had a ringer. Our head of theatrical coop advertising, Mary Kay Kammer, was over 6 feet tall and had a serve that no one could return. Throughout the league she was referred to as “Killer” Kay.

But, I digress.

When I came to what was the 2nd Art House Convergence 6 years ago, the NFDA came to mind. It was rather astounding to think that all these fiercely independent people could actually get together to share information for the good of all. It seemed to me more like wishful thinking than reality. But I guess the time was right. Cooperation sometimes is born of adversity, and at that time, rightly or wrongly, panic was in the air. Theatrical movie-going was being written off by the pundits, technological change was upon us, and according to Mark Gill, the sky was indeed falling.

Here we are all these years later, and it’s amazing how much has been accomplished as a result of this annual event. Let me lay out some of the major accomplishments of the convergence to date:

–We’ve learned that self-serve concession stands are way more profitable, and as a result you have all increased your per-customer yield by over 600%.

–We’ve learned that number of screens matters more than number of seats, and and as a result, you have divided your theaters into an average of 30 screens, each with an average of 25 seats.

–You all now have ticketing systems that require no paper, and scan your customer’s retinas for entry. These ticketing systems also track all customer concession purchases so that you can always make sure to have the right inventory when you know a particular customer is coming to the theater. The system also scans eyeballs during the show to determine who is sleeping through the film and who is genuinely watching, offering u a gentle shake of the seat at the dramatic moments in the film. Of course, it allows the customer to opt out by flipping a switch on the seat to put it into nap mode. Finally, it monitors laughter and tears, giving you the data you need in order to make your film buying decisions.

–You all now have implemented automated social media outreach that takes information from your customers, analyzes your upcoming schedule and chooses the best outreach methodology for each audience segment. I’m not even sure what that means, but it sounds really cool.

–By now, you all have installed the latest 8K holographic projection systems. They are capable of 4D presentation without glasses, up to 150 frames per second and 28 channels of sound, including a speaker under every seat.

–Speaking of seats, you all have now installed seats that automatically monitor your customers’ blood pressure and EKG in order to alert you to medical emergencies and to identify customers who should not be allowed to buy certain concessions. Some of you have implemented the Breathalyzer option.

–Finally, and perhaps most significantly, you have removed the need for distributors altogether by automating the booking process between content rights holder and theaters, and using data to put the right films into the right slots, maximizing your available screens and seats. Hmm… that one didn’t get a laugh.

That’s an enormous amount of accomplishment for a 7 year-old event, so you should give yourselves a hand.

So, the only thing left to do at the Art House Convergence is to drink and carouse with each other, which is why we are here, right?

But seriously…

While none of these things have actually happened (yet), the sharing of information, the spirit of cooperation and the growth of participation in the Art House Convergence has most definitely had an impact on what you all do on a day to day basis. The health, or dare I say, the survival of the business depends on more of the same.

But there’s a legitimate question of where do we go from here. How do we harness the spirit of cooperation, and the potential power of a group that keeps growing year after year?

What we have in this room are a group of committed people who are self-identifying as “mission driven,’ while actually having many different missions. You also self-identify as Art Houses, which is also somewhat ill-defined since one person’s art is another’s trash. I’m not suggesting that this is a bad thing, but it requires some understanding in order to take this group and maximize its potential.

There are people in the room representing institutions that are well established and quite successful. Others are just starting out and are trying to understand how things work on a very basic level.

There are those of you whose mission revolves around preserving the cinema experience in its purest, most pristine form. There are others who are working out of storefronts and trying to make the most of limited facilities and resources.

There are those of you who are devoted to the preservation of the traditional notion of cinema as an art form. There are those of you who are devoted to saving a particular venue, perhaps a classic and neglected movie palace, perhaps a simple neighborhood theater, and art films seem like they might be a solution, or part of a solution to make sure the building doesn’t get thrown on the scrap heap of real estate development.

Some of you have access to studio films and some of you don’t. Some of you don’t care.

Some of you are from big markets with obvious interest in more challenging films. Others of you are from smaller markets that are desperately in need of such content for its cultural value, but are hard pressed to find enough audience to support it.

So, clearly, there is not a SINGULAR mission in the room.

However, there is enough common ground that the number of venues in the room continues to multiply year after year.

So, as this Convergence begins, I would like to get things going by offering you a challenge. If the first 7 years of the Convergence were about best practices, I would like to see the next 7 years be about advocacy. Let me leave you with some thoughts about some initiatives that have been on my mind.

–First off, we deserve and should demand a “place at the Grownup table.” What do I mean by that? When the studios and the major chains have their next sit-down over technological standards, and start making deals that change the fundamental economics of the business, this group deserves a place at the table.

Putting on my Producer hat for a moment, every time I read in the press about the latest round of negotiations with the film unions, and I see that they refer to the negotiating body as “the producers,” it infuriates me. Who is representing me? Some studio lawyer?

I feel the same way about being force-fed the results of the DCI initiative. We deserve a place at that table.

Now, the only way that is going to happen is to start gathering data to show how significant the collective box office of this segment of the marketplace can be. The data should compare per-screen averages across the business, and include apples-to-apples comparisons of the potential grossing power of a well-run art house vs. the local chain competition. Assembling this data will require a level of cooperation from distributors and exhibitors that might be beyond reach, but I believe we should put it on the agenda.

–If you, the Art Houses are going to be willing to be more flexible about windowing and day and date releases, you deserve something in return. You have effectively become the research and development arm of the theatrical film business. As I alluded to last year, the quid pro quo should be more flexibility on the part of distributors on film rental splits, on split schedules and there ought to at least be a discussion about some kind of real participation in the downstream revenues that feed off of the theatrical showcases. I would advocate that a committee of this group sit down with distributors and explore that discussion.

–I think we should be thinking internationally. There are institutions all over the world that are facing the same issues. New distribution mechanisms and marketing initiatives are stripping away geographic borders to the point where thinking domestically is narrow-minded. We could be sharing programming ideas, curating programs that can cross borders, and sharing resources such as digital files that can be shipped instantly to places thousands of miles away. I’m encouraged that we do have representatives here from several overseas organizations. This needs to be a global enterprise.

–I think we need to take an active role in Film Preservation. If we don’t start acting on this soon, entire swaths of film history are going to begin to disappear. There is no current business model that will justify the continuing transfer of the deep catalog of film history from one unstable physical medium to another, let alone to finance a true restoration.

Until recently, Emerging Pictures had our offices in the DuArt Building in New York, and we watched with some horror as DuArt closed its film lab operations, and began to dump out all of the original negatives from their vaults. Now, mind you DuArt is working closely with MOMA, UCLA and the Academy to try and find homes for as much of the material as they can, but is this sustainable? In other countries, most notably in Europe, cinema history is being preserved by virtue of government support. Who will do it here?

We should join up with likeminded organizations which could include Sundance, but also IFP, Film Independent, the Academy and others and try to find a way to ensure that the next time someone wants to do a Preston Sturges retrospective on the big screen, there are more than the 3 most popular titles available. Back when I worked at U.A. Classics, we used to identify a small number of old catalog titles per year to transfer from nitrate stock to celluloid. We identified those titles by canvassing the repertory cinemas and getting commitments for bookings that helped to support the transfer. If one of the missions of this organization is preserve cinema as a theatrical experience, we have no choice but to get involved with this issue.

–Finally, we should be actively lobbying the government to increase support for the arts in this country, and to make sure that they are aware of the fact that while Hollywood may represent a powerful business interest, film is a uniquely American art form (edit: I’ve been chastised for this comment since it doesn’t acknowledge the wealth of non-American contribution to cinema. Point taken.) that deserves support in order to preserve our cultural heritage. Other countries see this need, even in the face of a bad economic environment. If we are not making the case, who will?

So, OK. I’ve laid out a bunch of very ambitious, some would say ridiculous potential initiatives. I’m sure there many other great ideas out there. The real point is that this organization, the combined passion of all of you fiercely independent exhibitors, has the power to affect change.

In the book “Adventures of Ideas,” written in 1933, Alfred North Whitehead says “The motive of success is not enough. It produces a short-sighted world which destroys the sources of its own prosperity.” This might as well have been the motto of the film business through its history.

We (You) have the power to change that.

Thanks you for your time and for the pulpit. Now let’s go converge!