Letter from the CEO
FOR YOUR CONSIDERATION…
I cannot start this note without thanking everyone that joined us in Vegas for CinemaCon 2024 and helped make it a special week. I enjoyed talking with so many exhibitors, vendors and distributors about the key issues facing our industry. Since I have returned to the east coast, I have spent three successive Saturday mornings enjoying a series of Cary Grant movies (Charade, The Philadelphia Story and The Awful Truth) at my local Alamo Cinema and Drafthouse. The age range of the audiences was notable – starting with fans in their twenties all the way to people my age and older. At the end of the movie, people stayed and talked about what they saw – always with a smile on their faces. It was a terrific example of “community” that was one of our themes at CinemaCon. But it also got me thinking about a question that arose in Vegas and in the press that followed – are there too many movie screens in America? This is a question that will continue to be asked until our industry is fully recovered. In today’s instant gratification world, many believe this as a simple “yes or no” question. And for others it’s a simple question of addition or subtraction. We know better.
In the past four years our industry has weathered, the loss of FOX, the ongoing global economic down-turn, two lengthy labor stoppages, and the global pandemic. As a result, the entire cinematic industry, not just exhibition, is still in recovery. The number of films available is direct evidence of this fact. There will be a stabilization point, but we are not there yet, making this inquiry premature at best.
Driving this conversation is the perception that the US market is saturated from a screen perspective. The truth is that when you look at the issue market by market, there are growth areas with very positive economic indicators. We are seeing people buying closed theatres, upgrading them, and successfully re-opening them. There are places across the country, including many in mid-America that have a very positive cash flow. You are also seeing some of the greatest innovation in these areas – family entertainment centers, for example – that provide consumers of all ages the experiences they want. Despite the continuing high cost of money slowing the pace and scale of these upgrades, they will accelerate as the industry and economy return to full strength.
Finally, as we know, there are theatres of all sizes spread across this country. They serve communities big and small, and they are all important pieces of the American cinematic experience. In many cases, a theatre in a small, rural community may provide the people in that town and surrounding towns, their only opportunity to have a shared moviegoing experience. Perhaps they won’t make as much each year as a theatre in a large city, but they add value in incalculable ways. It is incredibly important that we retain these types of theatres. That feeling of community I felt at a Cary Grant movie is one you feel everyday all across this nation. The theatre is a place for everyone. This isn’t just an accounting exercise, it’s a culture imperative.
So, to anyone searching for a yes or no answer, I’m sorry. Ultimately, the marketplace will set the number of screens as it always has. But let others speculate or rush to judgment. We should keep doing what we have always done – give fans that love movies on the big screen the best theatrical experience possible, every day, across this great nation.
Michael O’Leary
CinemaCon 2024 Highlights
Thank you to everyone who came out to CinemaCon! It was a great week and we cannot wait for all the great titles coming out this year! Mark your calendars for CinemaCon 2025 March 31 – April 3.
Member Updates
Congratulations to Shankweiler’s Drive In on their 90th Anniversary! Check out Lauren and Matt’s story here as part of NATO’s Behind the Screens series!
Congratulations to Milwaukee Film for officially taking over a reopening the historic Downer Theatre in Milwaukee, WI!
NATO ACROSS THE COUNTRY
NATO of CA/NV hosted a screening with legislators and staff in Sacramento, CA. Thank you to NATO of CA/NV for inviting us, to Cinemark for hosting the event at their beautiful theater in Sacramento, and to Universal for letting us screen The Fall Guy.
NATO UPDATES & EVENTS
Retaining and Cultivating A Customer Base
With the big summer season starting capitalize on those big movie titles movie goers are excited to see. Join NATO for a webinar on leveraging those titles to cultivate a loyal customer base on Thursday, May 9 at 11:00 am PST/2:00 pm EST. This session will provide valuable insights from theatre owners of different sizes on how to keep people coming back to the movies on a regular basis. Sign up for the webinar here.
Become a NATO Ambassador TODAY
If you are someone who is dedicated to NATO and the work we do together through our association, you should consider signing up to become a NATO Ambassador! All NATO Ambassadors will receive access to training materials and guidelines. NATO Ambassadors will work closely with the Director of Membership on all program initiatives. NATO Ambassadors can expect to contribute about three hours of work per month by working on various aspects of the following program goals:
- Recruitment of new members
- Retention of current members
- Improved onboarding of new members
- Increased diversity of membership and volunteer pool
Sign up to be a NATO Ambassador here!
Mental Health Tips for Theatre Operators
In case you missed it, a link to our April webinar with the Will Rogers Foundation can be found here. Looking after ourselves and our employees is better for our theaters in the long run, this webinar has helpful tips to help not only our own mental health but our employees too. May is world mental health month, feel free to share with your teams and beyond!
State of the Industry – May
Our quarterly SOTI will be held on Thursday, May 16 at 11:00 am PST/ 2:00 pm EST. Sign up here to attend that SOTI
NATO IN THE NEWS
IndieWire: How to Get Young Audiences in Theaters? Show Old Movies
Speaking to press at CinemaCon, National Association of Theater Owners president Michael O’Leary said communication between theaters and distributors is trending in the right direction. Exhibitors are urging distributors to use a theater’s marketing arm to better tap into local audiences — a group that exhibitors would know better than distributors. They’re starting to listen.
“Having that type of conversation happen is a huge step forward,” O’Leary said. “They seem insignificant in the abstract, but if you do that enough times, it becomes a habit, and you start to see some lift in the market.”
Screen Daily: CinemaCon: NATO’s Michael O’Leary urges investment in theatres, MPA’s Charles Rivkin fiery on piracy
O’Leary urged investors to support exhibition and touched on what is already shaping up to be a signature theme of his tenure – support for the independent sector and lower budget cinema.
“Getting more capital into the system will benefit everyone – creatives, studios, exhibition, local communities and, most importantly, movie fans,” O’Leary told attendees at The Colosseum.
“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.”
The NATO president and CEO continued: “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.”
GOVERNMENT AFFAIRS
DOL Increases Compensation Threshold for Exempt Employees
On April 23, 2024, the U.S. Department of Labor published its final rule that revises the Fair Labor Standards Act (FLSA) to significantly increase the minimum salary levels to qualify for executive, administrative, and professional (EAP) and highly compensated employee (HCE) exemptions from overtime requirements. Click here for a memo that summarizes key changes adopted in the Final Rule.
DOJ Final Rule on Website Accessibility for State and Local Governments
The U.S. Department of Justice has issued a final rule on website accessibility for state and local governments under the ADA’s Title II, hinting at future regulations for the private sector under Title III and the Rehabilitation Act. Although currently applicable only to state and local governments, this rule is expected to influence private sector website standards, as it establishes the first comprehensive regulatory framework for web accessibility. Given the DOJ’s authority over both public and private entities under various laws, this rule likely foreshadows stricter accessibility requirements for businesses that are public accommodations or receive federal funding. Read DOJ’s fact sheet and press release.
FTC Announces Rule Banning Noncompetes
After the Federal Trade Commission announced a final rule prohibiting noncompete agreements last week, the U.S. Chamber of Commerce and other business groups filed a lawsuit against the agency in the U.S. District Court for the Eastern District of Texas. The lawsuit alleges that the FTC Act only allows the agency to bring cases challenging particular practices and that the agency does not have the authority to issue rules that define unfair methods of competition. Under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date, which is 120 days from the day it is published in the Federal Register. Click here for the FTC press release.
The Cinema Foundation
2024 Pledges
Fulfill your 2024 pledge today – click here to donate. Your continued support enables us to strengthen the cinema industry & engage moviegoing audiences.
Stay tuned for exciting updates on this year’s industry promotional initiatives and data and research reports.
New Member Spotlight
Kennett Palace Theater, Kennett, MO
RGR Theatres, Window Rock, AZ
Cinema Filmtheater, Munich, Germany
Spring Theatre, Springhill, LA
Box Office
January 1-April 30, 2023: $2,659,967,608
January 1-April 30, 2024: $2,085,542,103
-21.6% year/year
Please refrain from sharing these links with non-members, vendors, distributors, the media, and outside consultants (financial or otherwise), or posting them on any public website, social media account, or message board. NATO provides these webinars, meetings, and services exclusively for NATO member company personnel.
